485BPOS

As filed with the SEC on    April 13, 2010      .	Registration No. 33-20000
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM N-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 33
_____________
THE PRUDENTIAL VARIABLE
APPRECIABLE ACCOUNT
(Exact Name of Registrant)
THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
(Name of Depositor)
751 Broad Street
Newark, New Jersey 07102
(800) 778-2255
(Address and telephone number of principal executive offices)
_____________
Thomas C. Castano
Vice President and Corporate Counsel
The Prudential Insurance Company of America
213 Washington Street
Newark, New Jersey 07102
(Name and address of agent for service)
Copy to:
Christopher E. Palmer, Esq.
Goodwin Procter LLP
901 New York Avenue, N.W.
Washington, D.C. 20001
_____________
It is proposed that this filing will become effective (check appropriate space):
□ immediately upon filing pursuant to paragraph (b) of Rule 485
■ on      May 1, 2010        pursuant to paragraph (b) of Rule 485
(date)
□ 60 days after filing pursuant to paragraph (a)(1) of Rule 485
□ on pursuant to paragraph (a)(1) of Rule 485
(date)
■ This Post-Effective Amendment designates a new effective date for a previously filed Post-Effective Amendment.

PART A:

INFORMATION REQUIRED IN THE PROSPECTUS

PROSPECTUS

May 1,  2010

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

Variable

APPRECIABLE

LIFE®

INSURANCE CONTRACTS

As of November 12, 2001, Prudential no longer offered these Contracts for sale.

This prospectus describes two forms of an individual variable life insurance Contract (the “Contract”) offered by The Prudential Insurance Company of America (“Prudential”, “we”, “us”, or “our”) under the name Variable Appreciable Life®Insurance.

You may choose to invest your Contract's premiums and its earnings in one or more of the following ways:

·   Invest your Contract’s premiums and its earnings in one or more of the available Variable Investment Options of The Prudential Variable Appreciable Account (the “Account”), each of which invests in a corresponding Portfolio of The Prudential Series Fund (the “Series Fund”):

·Conservative Balanced ·Diversified Bond ·Equity ·Flexible Managed ·Global ·Government Income ·High Yield Bond ·Jennison ·Money Market     ·Natural Resources ·Small Capitalization Stock ·Stock Index ·Value  

·   Invest in the Fixed Rate Option, which pays a guaranteed interest rate.

·   Invest in The Prudential Variable Contract Real Property Account (the “Real Property Account”).

Please Read this Prospectus.  Please read this prospectus and keep it for future reference.  A current prospectus for theReal Property Account accompanies this prospectus.  These prospectuses contain important information about the available Variable Investment Options.  Please read these prospectuses and keep them for future reference.

Neither the Securities and Exchange Commission (“SEC”) nor any state securities commission has approved or disapproved of these securities or determined that this Contract is a good investment, nor has the SEC determined that this prospectus is complete or accurate.  It is a criminal offense to state otherwise.

The Contract may have been purchased through registered representatives located in banks and other financial institutions. Investment in a variable life insurance Contract is subject to risk, including the possible loss of your money.  An investment in The Prudential Variable Appreciable Life® is not a bank deposit and is not insured by the Federal Deposit Insurance Corporation (“FDIC”) or any other governmental agency.

The Prudential Insurance Company of America

751 Broad Street

Newark, New Jersey 07102

Telephone: (800) 778-2255

Appreciable Life is a registered mark of Prudential.

TABLE OF CONTENTS

Page
SUMMARY OF CHARGES AND EXPENSES	1
Expenses other than Portfolio Expenses	1
Portfolio Expenses	4
SUMMARY OF THE CONTRACT AND CONTRACT BENEFITS	4
Brief Description of the Contract	4
Types of Death Benefit Available Under the Contract	5
Death Benefit Guarantee	5
The Contract Fund	5
Tabular Contract Fund	5
Premium Payments	5
Allocation of Premium Payments	6
Investment Choices	6
Transfers Among Investment Options	6
Increasing or Decreasing the Face Amount	7
Access to Contract Values	7
Contract Loans	7
Canceling the Contract	7
SUMMARY OF CONTRACT RISKS	7
Contract Values are not Guaranteed	7
Limitation of Benefits on Certain Riders for Claims Due to War or Service in the Armed Forces	8
Increase in Charges	8
Contract Lapse	8
Risks of Using the Contract as a Short-Term Savings Vehicle	8
Risks of Taking Withdrawals	8
Limitations on Transfers	9
Charges on Surrender of the Contract	9
Risks of Taking a Contract Loan	10
Potential Tax Consequences	10
Replacement of the Contract	10
SUMMARY OF RISKS ASSOCIATED WITH THE VARIABLE INVESTMENT OPTIONS	11
Risks Associated with the Variable Investment Options	11
Learn More about the Variable Investment Options	11
GENERAL DESCRIPTIONS OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, THE REGISTRANT, AND THE SERIES FUND	11
The Prudential Insurance Company of America	11
The Prudential Variable Appreciable Account	11
The Prudential Series Fund	12
Investment Manager	12
Investment Subadvisers	13
Service Fees Payable to Prudential	13
Voting Rights	14
Substitution of Variable Investment Options	14
The Fixed Rate Option	14
The Prudential Variable Contract Real Property Account	14
CHARGES AND EXPENSES	15
Taxes Attributable to Premiums	15
Deduction from Premiums	15
Sales Load Charges	16
Cost of Insurance	16
Monthly Deductions from the Contract Fund	16
Daily Deduction from the Variable Investment Options	17
Surrender Charges	17
Transaction Charges	18
Portfolio Charges	18
Rider Charges	18

PERSONS HAVING RIGHTS UNDER THE CONTRACT	18
Contract Owner	18
Beneficiary	19
OTHER GENERAL CONTRACT PROVISIONS	19
Assignment	19
Incontestability	19
Misstatement of Age or Sex	19
Settlement Options	19
Suicide Exclusion	19
RIDERS	19
REQUIREMENTS FOR ISSUANCE OF A CONTRACT	21
PREMIUMS	21
Allocation of Premiums	22
Transfers/Restrictions on Transfers	22
Dollar Cost Averaging	24
DEATH BENEFITS	24
Contract Date	24
When Proceeds Are Paid	24
Death Claim Settlement Options	24
Types of Death Benefit	25
Increases in the Face Amount	25
Decreases in the Face Amount	26
CONTRACT VALUES	27
Surrender of a Contract	27
How a Contract’s Cash Surrender Value Will Vary	27
Loans	27
Withdrawals	29
LAPSE AND REINSTATEMENT	29
Options on Lapse	30
TAXES	30
Tax Treatment of Contract Benefits	30
Tax-Qualified Pension Plans	32
DISTRIBUTION AND COMPENSATION	32
LEGAL PROCEEDINGS	34
ADDITIONAL INFORMATION	37
DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS	38
TABLE OF CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION	39

SUMMARY OF CHARGES AND EXPENSES

Capitalized terms used in this prospectus are defined where first used or in the DEFINITIONS OF SPECIAL TERMS USED IN THIS PROSPECTUS, which is located at the end of this prospectus.

Expenses other than Portfolio Expenses

The following tables describe the maximum fees and expenses that you could pay when buying, owning, and surrendering the Contract.  Generally, our current fees and expenses are lower than the maximum fees and expenses reflected in the following tables.  For more information about fees and expenses, see CHARGES AND EXPENSES.

The first table describes maximum fees and expenses that we deduct from each premium payment, and maximum fees we charge for sales of the Contract and transactions.

Transaction and Optional Rider Fees
Charge	When Charge is Deducted	Amount Deducted
Taxes Attributable to Premiums (1) (Varies by state and locality.)	Deducted from premium payments.	0% to 14.85%(3)
Administrative fee	Deducted from premium payments.	$2
Maximum Sales Charge on Premiums (Load) (2) (Charge is a percentage of the primary annual premium.)	Monthly	0.5%
Contingent Deferred Sales Charge (Load) (2) (Charge is a percentage of the primary annual premium.)	Upon lapse, surrender or decrease in the Face Amount.	50%
Surrender fee per $1,000 of Coverage Amount (2)	Upon lapse, surrender or decrease in the Face Amount.	$5
Withdrawal fee (Charge is based on the withdrawal amount.)	Upon withdrawal.	The lesser of $15 and 2%
Face Amount Change fee	When there is a change in the Face Amount.	$15
Living Needs Benefit Rider fee	When the benefit is paid.	$150

(1)   For these purposes, “taxes attributable to premiums” shall include any federal, state or local income, premium, excise, business, or any other type of tax (or component thereof) measured by or based upon the amount of premium received by Prudential.

(2)   Duration of charge is limited.  See CHARGES AND EXPENSES.

(3)   The most common charge for taxes attributable to premiums is 3.25%.

The second table describes the maximum Contract fees and expenses that you will pay periodically during the time you own the Contract, not including the Portfolio fees and expenses.

1

Periodic Contract and Optional Rider Charges Other Than The Series Fund's Operating Expenses
Charge	When Charge is Deducted	Amount Deducted
Cost of Insurance (“COI”) for the Face Amount. (1)(2) Minimum and Maximum Charges per $1,000 of the net amount at risk. _____________ Initial COI for a representative Contract Owner, male age 30 in the  Preferred underwriting class, no riders. (Charge per $1,000 of the net amount at risk.)	Monthly	From $0.06 to $83.34                                                      _____________ $0.121(3)
Mortality and Expense Risk fee (Effective annual rate calculated as a percentage of assets in the Variable Investment Options.)	Daily	0.9%
Additional Mortality fee for risk associated with certain occupation, avocation, or aviation risks.	Monthly	From $0.10 to $2.08(6)
Fee for the Face Amount. (Flat fee plus a charge per $1,000 of Face Amount.)	Monthly	$3.00 plus $0.03
Fee for an increase to the Face Amount. (Charge per $1,000 of increase in Face Amount.)	Monthly	$0.03
Net interest on loans (5)	Annually	1.5%
Guaranteed Death Benefit fee for the Face Amount or an increase to the Face Amount. (Charge per $1,000 of the Face Amount or increase in the Face Amount.)	Monthly	$0.01
Level Premium Term Rider (1) Minimum and Maximum Charges per $1,000 of rider coverage. _____________ Level Premium Term Rider fee for a representative Contract Owner, male age 30 in the Preferred underwriting class. (Charge per $1,000 of rider coverage.)	Monthly	From $0.03 to $27.00 _____________ $0.15(3)
Child Level Premium Term Rider (7) (Charge per $1,000 of rider coverage.)	Monthly	$0.45

2

Renewable Premium Term Rider(1) Minimum and Maximum Charges per $1,000 of coverage. _____________ Renewable Premium Term Riderfee for a representative Contract Owner, male age 30 in the Preferred underwriting class. (Charge per $1,000 of coverage.)	Monthly	From $0.02 to $55.08   _____________ $0.13(3)
Accidental Death Benefit Rider (1) Minimum and Maximum Charges per $1,000 of coverage. _____________ Accidental Death Benefit Rider fee for a representative Contract Owner, male age 30 in the Preferred underwriting class. (Charge per $1,000 of coverage.)	Monthly	From $0.03 to $0.70     _____________ $0.07(3)
Option to Purchase Additional Insurance Rider(1) Minimum and Maximum Charges per $1,000 of additional insurance amount. _____________ Option to Purchase Additional Insurance Rider fee for a representative Contract Owner, male age 30 in the Preferred underwriting class. (Charge per $1,000 of additional insurance amount.)	Monthly	From $0.06 to $0.37                  _____________ $0.23(3)
Waiver of Premium Rider (1) Minimum and Maximum Charges per $1,000 of coverage. _____________ Waiver of Premium Rider fee for a representative Contract Owner, male age 30 in the Preferred underwriting class. (Charge per $1,000 of coverage.)	Monthly	From $0.01 to $0.31 _____________ $0.07(3)
Applicant Waiver of Premium Rider (1)(4) Minimum and Maximum Charges (Charge is a percentage of the Contract's annual premium.) _____________ Applicant Waiver of Premium Rider fee for a representative Contract Owner, male age 30 in the Preferred underwriting class. (Charge is a percentage of the Contract's annual premium.)	Monthly	From 0.424% to 3.394% _____________ 0.679%(3)

3

Unscheduled Premium Benefit Rider (1)(4) Minimum and Maximum Charges (Calculated as a percentage of the current unscheduled premium benefit amount.) _____________ Unscheduled Premium Benefit Rider fee for a representative Contract Owner, male age 30 in the Preferred underwriting class. (Calculated as a percentage of the current unscheduled premium benefit amount.) Monthly From 0.38% to 1.14%    _____________ 0.42%(3)  

(1)   The charge varies based on the individual characteristics of the insured, including such characteristics as: age, sex, and underwriting class.  The charges given are representative for issues after 1997.  Other rates may apply to earlier issues.

(2)   For example, the highest COI rate is for an insured who is a male/female age 99.

(3)   You may obtain more information about the particular COI charges that apply to you by contacting your Prudential representative.

(4)   The cost of this rider will provide for an additional benefit amount, above the amount for the Waiver of Premium Rider.  The percentage varies based on underwriting class.   For the Applicant Waiver of Premium Rider, the charge may not be less than $0.15 per $1,000 of Face Amount.

(5)   The maximum loan rate reflects the net difference between a loan with an effective annual interest rate of 5.5% and an effective annual interest credited equal to 4%.  A loan with a variable loan interest rate may be charged a lower effective annual interest rate.  See Loans.

(6)   The amount and duration of the charge will vary based on individual circumstances including Issue Age, type of risk, and the frequency of exposure to the risk, and is charged per $1,000 of Face Amount.

(7)   Duration of the charge is limited.  See CHARGES AND EXPENSES.

Portfolio Expenses

This table shows the minimum and maximum total operating expenses charged by the Series Fund that you will pay periodically during the time you own the Contract.  More detail concerning Portfolio fees and expenses is contained in the prospectus for the Series Fund.

Total Annual Fund Operating Expenses(1)	Minimum	Maximum
(expenses that are deducted from the Fund’s assets, including management  fees, any distribution [and/or service] (12b-1) fees, and other expenses, but not including reductions for any fee waiver or other reimbursements.)	0.37%	0.85%

(1)   Total Annual operating expense for Real Property Partnership is 9.33% .

SUMMARY OF THE CONTRACT

AND CONTRACT BENEFITS

Brief Description of the Contract

The Contract is a form of variable universal life insurance.  Our variable appreciable life insurance policy is a flexible form of variable universal life insurance.  It has a Death Benefit and a Contract Fund, the value of which changes every day according to the investment performance of the investment options to which you have allocated your net premiums.  You may invest premiums in one or more of the available Variable Investment Options that invest in Portfolios of The Prudential Series Fund, in the Fixed Rate Option, or in the Real Property Account.  Although the value of your Contract Fund may increase if there is favorable investment performance in the Portfolios you select, investment returns in the Portfolios are NOT guaranteed.  There is a risk that investment performance will be unfavorable and that the value of your Contract Fund will decrease.  The risk will be different, depending upon which investment options you choose.  You bear the risk of any decrease.  Within certain limits, the Contract will provide you with some flexibility in determining the amount and timing of your premium payments. The Contract has a Tabular Contract Fund that is designed to encourage the payment of premiums and the accumulation of cash value.  Some features and/or riders described in this prospectus may not be available in some states.

4

Types of Death Benefit Available Under the Contract

The Death Benefit is an important feature of the Contract.  You may choose one of the following two forms of the Contract.  They each have a different Death Benefit amount.

Contract Form A, level Death Benefit: The Death Benefit will generally be equal to the Face Amount of insurance.  It can never be less than this amount.  However, it is possible, that the Contract Fund may grow to the point where we  may increase the Death Benefit to ensure that the Contract will satisfy the Internal Revenue Code's definition of life insurance.

Contract Form B, variable Death Benefit: The Death Benefit will increase and decrease as the amount of the Contract Fund varies with the investment performance of the selected options.  However, the Death Benefit under Form B, as is true under Form A, will never be less than the initial Face Amount and it may also be increased to satisfy Internal Revenue Code requirements.

Throughout this prospectus the word “Contract” refers to both Form A and B unless specifically stated otherwise.  Under both Form A and B Contracts there is no guaranteed minimum Cash Surrender Value.

Death Benefit Guarantee

The Prudential Variable Appreciable Life Insurance Contract is a form of life insurance that provides much of the flexibility of variable universal life, however, with two important distinctions:

·    We guarantee that if the Scheduled Premiums are paid when due, or received within 61 days after the Scheduled Premiums are due (or missed premiums are paid later with interest), the Contract will not lapse because of unfavorable investment performance, and the least amount we will pay upon the death of the insured is the Face Amount of insurance.

·   If all premiums are not paid when due (or not made up later with interest), the Contract will still not lapse as long as the Contract Fund is higher than a stated amount set forth in the Contract.  This amount is called the “Tabular Contract Fund”, and it increases each month.  In later years it becomes quite high.  The Contract lapses when the Contract Fund falls below this stated amount, rather than when it drops to zero.  This means that when a Variable Appreciable Life Contract lapses, it may still have considerable value and you may have a substantial incentive to reinstate it.  If you choose otherwise, you may take, in one form or another, the Cash Surrender Value.  See LAPSE AND REINSTATEMENT.

The Contract Fund

Your Contract Fund value changes daily, reflecting:  (1) increases or decreases in the value of your Variable Investment Options; (2) interest credited on any amounts allocated to the Fixed Rate Option; (3) interest credited on any loan; and (4) the daily asset charge for mortality and expense risks assessed against the Variable Investment Options.  The Contract Fund value also changes to reflect the receipt of premium payments and the monthly deductions described under CHARGES AND EXPENSES.

Tabular Contract Fund

The Tabular Contract Fund is designed to encourage the payment of premiums and the accumulation of cash value.   Even if a Scheduled Premium is not paid, the Contract will remain in-force as long as the Contract Fund on any Monthly Date is equal to or greater than the Tabular Contract Fund Value on the next Monthly Date.

The Tabular Contract Fund is a guideline representing the amount that would be in the Contract Fund if all Scheduled Premiums are paid on their due dates, there are no unscheduled premiums paid, there are no withdrawals, the investment options you have chosen earn exactly a uniform rate of return of 4% per year, and we have deducted the maximum mortality, sales load and expense charges.

Premium Payments

Your Contract sets forth a Scheduled Premium which is payable annually, semi-annually, quarterly or monthly.  We guarantee that, if the Scheduled Premiums are paid when due (or if missed premiums are paid later, with interest) and there are no withdrawals, the Contract will not lapse because of unfavorable investment experience.  Your Contract may terminate if the Contract Debt exceeds what the Cash Surrender Value would be if there was no Contract Debt.  We will notify you before the Contract is terminated and you may then repay all or enough of the loan to keep the Contract in-force.  See Loans.

5

Your Scheduled Premium consists of two amounts:

·   The initial amount is payable from the time you purchase your Contract until the Contract Anniversary immediately following your 65th birthday or the Contract's seventh anniversary, whichever is later (the “Premium Change Date”);

·   The guaranteed maximum amount payable after the Premium Change Date.  See PREMIUMS.

The payment of premiums in excess of Scheduled Premiums may cause the Contract to become a Modified Endowment Contract for federal income tax purposes.  See PREMIUMS, and Tax Treatment of Contract Benefits.  Prudential will generally accept any premium payment of at least $25. You may be flexible with your premium payments depending on your Contract’s performance. If the performance of the Contract is less favorable and the Contract Fund is less than the Tabular Contract Fund Value the Contract would go into default.

Allocation of Premium Payments

When you apply for the Contract, you tell us how to allocate your premiums. You may change the way in which subsequent premiums are allocated by giving written notice to a Service Office, by our website, provided you are enrolled to use Prudential Online® Account Access, or by telephoning a Service Office, provided you are enrolled to use the Telephone Transfer System. See Allocation of Premiums.

On the Contract Date, we deduct a $2 administrative charge and the charge for taxes attributable to premiums from the initial premium.  Then the first monthly charges are deducted.  The remainder of the initial premium will be allocated among the Variable Investment Options, the Fixed Rate Option, or the Real Property Account according to the allocations you specified in the application form.  The invested portion of any part of the initial premium in excess of the Scheduled Premium is generally placed in the selected investment options on the date of receipt in Good Order at the Payment Office (the address on your bill), but not earlier than the Contract Date.

After the Contract Date, we deduct a $2 administrative charge and the charge for taxes attributable to premiums from each subsequent premium payment.  After the deductions from premiums and the monthly charges are made, the remainder of each subsequent premium payment will be invested as of the end of the Valuation Period in which it is received in Good Order at the Payment Office, in accordance with the allocation you previously designated.

Investment Choices

You may choose to invest your Contract’s premiums and its earnings in one or more of the available Variable Investment Options that invest in Portfolios of The Prudential Series Fund.  You may also invest in the Fixed Rate Option and the Real Property Account.  See The Prudential Series Fund, The Fixed Rate Option, and The Prudential Variable Contract Real Property Account. Subsequent net premiums are applied to your Contract as of the date of receipt at the Payment Office.

We may add additional Variable Investment Options in the future.

Transfers Among Investment Options

If the Contract is not in default, you may, up to four times each Contract Year, transfer amounts among the Variable Investment Options, to the Fixed Rate Option, or to the Real Property Account.  Additional transfers may be made only with our consent.  Currently, we allow you to make additional transfers.  There is no charge.   For the first 20 transfers in a calendar year, you may transfer amounts by proper written notice to a Service Office, by our website, provided you are enrolled to use Prudential Online® Account Access, or by telephone, provided you are enrolled to use the Telephone Transfer System.

After you have submitted 20 transfers in a calendar year, we will accept subsequent transfer requests only if they are in a form that meets our needs , bear an original signature in ink, and are sent to us by U.S. regular mail.

Multiple transfers that occur during the same day, but prior to the end of the Valuation Period for that day, will be counted as a single transfer.

Certain restrictions may apply to transfers from the Fixed Rate Option and the Real Property Account.

We reserve the right to prohibit transfer requests determined to be disruptive to the investment option or to the disadvantage of other Contract Owners.

Transfer restrictions will be applied in a uniform manner and will not be waived.

6

In addition, you may use our dollar cost averaging feature.  See Transfers/Restrictions on Transfers, Dollar Cost Averaging.

Increasing or Decreasing the Face Amount

Subject to our underwriting requirements determined by us, after the first Contract Anniversary you may increase the amount of insurance by increasing the Face Amount of the Contract.  An increase in the Face Amount is similar to the purchase of a second Contract and must be at least $25,000.  Other conditions must be met before we approve of an increase in the Face Amount.  See Increases in the Face Amount.

You also have the additional option of decreasing the Face Amount of your Contract, without withdrawing any surrender value.  The minimum permissible decrease is $10,000 and will not be permitted if it causes the Face Amount of the Contract to drop below the minimum Face Amount applicable to the Contract.

We may decline a reduction if we determine it would cause the Contract to fail to qualify as "life insurance" for purposes of Section 7702 of the Internal Revenue Code.  In addition, if the Face Amount is decreased or a significant premium is paid in conjunction with an increase, there is a possibility that the Contract will be classified as a Modified Endowment Contract.   See Tax Treatment of Contract Benefits.

Access to Contract Values

A Contract may be surrendered for its Cash Surrender Value (the Contract Fund minus any Contract Debt and minus any applicable surrender charges) while the insured is living.  To surrender a Contract, we may require you to deliver or mail the Contract with a written request in a form that meets our needs, to a Service Office.  The Cash Surrender Value of a surrendered Contract will be determined as of the end of the Valuation Period in which such a request is received in a Service Office.  Surrender of a Contract may have tax consequences.  See Surrender of a Contract, and Tax Treatment of Contract Benefits.

Under certain circumstances, you may withdraw a part of the Contract's Cash Surrender Value without surrendering the Contract.  The amount withdrawn must be at least $2,000 under a Form A Contract and at least $500 under a Form B Contract.  There is an administrative processing fee for each withdrawal which is the lesser of: (a) $15 and; (b) 2% of the withdrawal amount.  Withdrawal of the Cash Surrender Value may have tax consequences.  See Withdrawals, and Tax Treatment of Contract Benefits.

Contract Loans

You may borrow money from us using your Contract as security for the loan.  The maximum loan amount is equal to the sum of (1) 90% of the portion of the cash value attributable to the Variable Investment Options and (2) the balance of the cash value.  The cash value is equal to the Contract Fund less any surrender charge.  The minimum loan amount you may borrow at any one time is $200, unless the loan proceeds are used to pay premiums on your Contract.  See Loans.

Canceling the Contract

Generally, you may return the Contract for a refund within 10 days after you receive it.  Some states allow a longer period of time during which a Contract may be returned for a refund.  In general, you will receive a refund of all premium payments made, less any applicable federal and/or state income tax withholding.  However, if applicable law does not require a refund of all premium payments made, you will receive the greater of  (1) the Contract Fund plus the amount of any charges that have been deducted or (2) all premium payments made, less any applicable federal and/or state income tax withholding.  A Contract returned according to this provision shall be deemed void from the beginning.

SUMMARY OF CONTRACT RISKS

Contract Values are not Guaranteed

Your benefits (including life insurance) are not guaranteed, and may be entirely dependent on the investment performance of the Variable Investment Options you select.  The value of your Contract Fund rises and falls with the performance of the investment options you choose and the charges that we deduct.  Poor investment performance or loans could cause your Contract to lapse and you could lose your insurance coverage.  However, we guarantee that if Scheduled Premiums are paid when due and there are no withdrawals, the Contract will not lapse because of unfavorable investment experience.

7

The Variable Investment Options you choose may not perform to your expectations.  Investing in the Contract involves risks including the possible loss of your entire investment.  Only the Fixed Rate Option provides a guaranteed rate of return.  See Risks Associated with the Variable Investment Options and The Fixed Rate Option.

Limitation of Benefits on Certain Riders for Claims Due to War or Service in the Armed Forces

We will not pay a benefit on any Accidental Death Benefit type rider or make payments for any disability type rider if the death or injury is caused or contributed to by war or act of war, declared or undeclared, including resistance to armed aggression.  This restriction includes service in the armed forces of any country at war.

Increase in Charges

In several instances we will use the terms “maximum charge” and “current charge.”  The “maximum charge,” in each instance, is the highest charge that we may make under the Contract.  The “current charge,” in each instance , is the amount that we now charge , which may be lower than the maximum charge .  If circumstances change, we reserve the right to increase each current charge, up to the maximum charge, without giving any advance notice.

Contract Lapse

If Scheduled Premiums are paid on or before each due date, or received within 61 days after the Scheduled Premiums are due, and there are no withdrawals or outstanding loans, a Contract will remain in-force even if the investment results of that Contract's Variable Investment Option[s] have been so unfavorable that the Contract Fund has decreased to zero or less.

In addition, even if a Scheduled Premium is not paid, the Contract will remain in-force as long as the Contract Fund on any Monthly Date is equal to or greater than the Tabular Contract Fund Value on the following Monthly Date.  However, if a Scheduled Premium is not paid, and the Contract Fund is insufficient to keep the Contract in-force, the Contract will go into default.  Should this happen, we will notify you of the required payment to prevent your Contract from lapsing.  Your payment must be received at the Payment Office within the 61-day grace period after the notice of default is mailed or the Contract will lapse.  If your Contract does lapse, it will still provide some benefits.  See LAPSE AND REINSTATEMENT.  If you have an outstanding loan when your Contract lapses, you may have taxable income as a result.  See Tax Treatment of Contract Benefits - Pre-Death Distributions.

Risks of Using the Contract as a Short-Term Savings Vehicle

Because the Contract provides for an accumulation of a Contract Fund as well as a Death Benefit, you may wish to use it for various insurance planning purposes.  Purchasing the Contract for such purposes may involve certain risks.

For example, a life insurance policy could play an important role in helping you to meet the future costs of a child’s education.  The Contract’s Death Benefit could be used to provide for education costs should something happen to you, and its investment features could help you accumulate savings.  However, if the Variable Investment Options you choose perform poorly, or if you do not pay sufficient premiums, your Contract may lapse or you may not accumulate the funds you need.   Accessing the values in your Contract through withdrawals and Contract loans may significantly affect current and future Contract values or Death Benefit proceeds and may increase the chance that your Contract will lapse.  If you have an outstanding loan when your Contract lapses, you may have taxable income as a result.  See Tax Treatment of Contract Benefits - Pre-Death Distributions.

The Contract is designed to provide benefits on a long-term basis. Consequently, you should not use the Contract as a short-term investment or savings vehicle.  Because of the long-term nature of the Contract, you should consider whether the Contract is consistent with the purpose for which it is being considered.

Risks of Taking Withdrawals

We may limit you to no more than four withdrawals in a Contract Year.  The amount withdrawn must be at least $2,000 under a Form A Contract and at least $500 under a Form B Contract.  You may make a withdrawal only to the extent that the Cash Surrender Value plus any Contract loan exceeds the applicable tabular cash value.  There is an administrative processing fee for each withdrawal which is the lesser of: (a) $15 and; (b) 2% of the withdrawal amount.  Withdrawal of the Cash Surrender Value may have tax consequences.  See Tax Treatment of Contract Benefits.

Whenever a withdrawal is made, the Death Benefit will immediately be reduced by at least the amount of the withdrawal.  Withdrawals under Form B (variable) Contracts, will not change the Face Amount of insurance.  However, under a Type A (fixed) Contract, the withdrawal will cause a reduction in the Face Amount of insurance by no more than

8

the amount of the withdrawal.  A surrender charge may be deducted.  See CHARGES AND EXPENSES.

It is important to note that, if the Face Amount of insurance is decreased, there is a possibility that the Contract might be classified as a Modified Endowment Contract.  Before making any withdrawal that causes a decrease in the Face Amount of insurance, you should consult with your tax adviser and your Prudential representative.  See Withdrawals and Tax Treatment of Contract Benefits.

Limitations on Transfers

All or a portion of the amount credited to a Variable Investment Option may be transferred to another Variable Investment Option, the Fixed Rate Option, or the Real Property Account.

If the Contract is not in default, you may, up to four times each Contract Year, transfer amounts among the Variable Investment Options, to the Fixed Rate Option, or to the Real Property Account.  Additional transfers may be made only with our consent.  Currently, we allow you to make additional transfers.  There is no charge.   For the first 20 transfers in a calendar year, you may transfer amounts by proper written notice to a Service Office, by our website, provided you are enrolled to use Prudential Online® Account Access, or by telephone, provided you are enrolled to use the Telephone Transfer System.  We use reasonable procedures to confirm that instructions given by telephone are genuine.  However, we are not liable for following telephone instructions that we reasonably believe to be genuine.  In addition, we cannot guarantee that you will be able to get through to complete a telephone transfer during peak periods such as periods of drastic economic or market change.

After you have submitted 20 transfers in a calendar year, we will accept subsequent transfer requests only if they are in a form that meets our needs , bear an original signature in ink, and are sent to us by U.S. regular mail.  After you have submitted 20 transfers in a calendar year, a subsequent transfer request by telephone, fax or electronic means will be rejected, even in the event that it is inadvertently processed.

Currently, certain transfers effected systematically under the dollar cost averaging program described in this prospectus do not count towards the limit of 20 transfers.  In the future, we may count such transfers towards the limit.

Multiple transfers that occur during the same day, but prior to the end of the Valuation Period for that day, will be counted as a single transfer.

Generally, only one transfer from the Fixed Rate Option is permitted during each Contract Year and only during the 30-day period beginning on the Contract Anniversary.  The maximum amount you may transfer out of the Fixed Rate Option each year is the greater of:  (a) 25% of the amount in the Fixed Rate Option; and (b) $2,000.

Transfers from the Real Property Account to the other investment options available under the Contract are currently permitted only during the 30-day period beginning on the Contract Anniversary.  The maximum amount that may be transferred out of the Real Property Account each year is the greater of: (a) 50% of the amount invested in the Real Property Account; and (b) $10,000.  See the attached Real Property Account Prospectus.

We may modify your right to make transfers by restricting the number, timing and/or amount of transfers we find to be disruptive to the investment option or to the disadvantage of other Contract Owners.  We also reserve the right to prohibit transfer requests made by an individual acting under a power of attorney on behalf of more than one Contract Owner.  We will immediately notify you at the time of a transfer request if we exercise this right.

Transfer restrictions will be applied uniformly and will not be waived. See Transfers/Restrictions on Transfers.

Charges on Surrender of the Contract

You may surrender your Contract at any time for its Cash Surrender Value while the insured is living .  We deduct a surrender charge from the surrender proceeds.

We will assess a surrender charge if, during the first 10 Contract Years (or 10 years from an increase in the Face Amount of insurance), the Contract lapses, is surrendered, or the Face Amount of insurance is decreased (including as a result of a withdrawal).  The surrender charge is determined by the primary annual premium amount.  It is calculated as described in Surrender Charges.  While the amount of the surrender charge decreases over time, it may be a substantial portion or even equal to your Contract Fund.  In addition, the surrender of your Contract may have tax consequences.  See Tax Treatment of Contract Benefits.

9

Risks of Taking a Contract Loan

Accessing the values in your Contract through Contract loans may significantly affect current and future Contract values or Death Benefit proceeds and may increase the chance that your Contract will lapse.  Your Contract will be in default if at any time the Contract Fund (which includes the loan) less any applicable surrender charges is less than the Tabular Contract Fund.  If the Contract lapses or is surrendered, the amount of unpaid Contract Debt will be treated as a distribution and will be immediately taxable to the extent of the gain in the Contract.  In addition, if your Contract is a Modified Endowment Contract for tax purposes, taking a Contract loan may have tax consequences.  See Tax Treatment of Contract Benefits.

If your Contract Fund is less than your Contract Debt your Contract will terminate 61 days after we notify you.

Potential Tax Consequences

Your Contract is structured to meet the definition of life insurance under Section 7702 of the Internal Revenue Code.  Consequently, we reserve the right to refuse to accept a premium payment that would, in our opinion, cause this Contract to fail to qualify as life insurance.  We also have the right to refuse to accept any payment that increases the Death Benefit by more than it increases the Contract Fund.  Although we believe that the Contract should qualify as life insurance for tax purposes, there are some uncertainties, particularly because the Secretary of Treasury has not yet issued permanent regulations that bear on this question. Accordingly, we reserve the right to make changes -- which will be applied uniformly to all Contract Owners after advance written notice -- that we deem necessary to insure that the Contract will qualify as life insurance.

Current federal tax law generally excludes all Death Benefits from the gross income of the beneficiary of a life insurance Contract.  However, your Death Benefit could be subject to estate tax.  In addition, you generally are not subject to taxation on any increase in the Contract value until it is withdrawn.  Generally, you are taxed on surrender proceeds and the proceeds of any partial withdrawals only if those amounts, when added to all previous distributions, exceed the total premiums paid.  Amounts received upon surrender or withdrawal (including any outstanding Contract loans) in excess of premiums paid are treated as ordinary income.

Special rules govern the tax treatment of life insurance policies that meet the federal definition of a Modified Endowment Contract.  The Contract could be classified as a Modified Endowment Contract if premiums in amounts that are too large are paid or a decrease in the Face Amount of insurance is made (or a rider removed).  The addition of a rider or an increase in the Face Amount of insurance may also cause the Contract to be classified as a Modified Endowment Contract if a significant premium is paid in conjunction with an increase or the addition of a rider .  We will notify you if a premium or a reduction in the Face Amount would cause the Contract to become a Modified Endowment Contract, and advise you of your options.

Under current tax law, Death Benefit payments under Modified Endowment Contracts, like Death Benefit payments under other life insurance Contracts, generally are excluded from the gross income of the beneficiary.  However, amounts you receive under the Contract before the insured's death, including loans and withdrawals, are included in income to the extent that the Contract Fund before surrender charges exceeds the premiums paid for the Contract increased by the amount of any loans previously included in income and reduced by any untaxed amounts previously received other than the amount of any loans excludible from income.  An assignment of a Modified Endowment Contract is taxable in the same way.  These rules also apply to pre-death distributions, including loans and assignments, made during the two-year period before the time that the Contract became a Modified Endowment Contract.

All Modified Endowment Contracts issued by us to you during the same calendar year are treated as a single Contract for purposes of applying these rules.  See Tax Treatment of Contract Benefits.

Any taxable income on pre-death distributions (including full surrenders) is subject to a penalty of 10% unless the amount is received on or after age 59½, on account of your becoming disabled or as a life annuity.  It is presently unclear how the penalty tax provisions apply to Contracts owned by businesses.

Replacement of the Contract

The replacement of life insurance is generally not in your best interest.  In most cases, if you require additional life insurance coverage, the benefits of your existing Contract can be protected by increasing the insurance amount of your existing Contract, or by purchasing an additional Contract.  If you are considering replacing a Contract, you should compare the benefits and costs of supplementing your existing Contract with the benefits and costs of purchasing a new Contract and you should consult with a tax adviser.

10

SUMMARY OF RISKS ASSOCIATED WITH

THE VARIABLE INVESTMENT OPTIONS

You may choose to invest your Contract’s premiums and its earnings in one or more of the available Variable Investment Options.  You may also invest in the Fixed Rate Option or the Real Property Account.  The Fixed Rate Option is the only investment option that offers a guaranteed rate of return.  See The Prudential Series Fund, The Fixed Rate Option, and The Prudential Variable Contract Real Property Account.

Risks Associated with the Variable Investment Options

The Separate Account invests in the shares of one or more open-end management investment companies registered under the Investment Company Act of 1940 other than the Real Property Account, which invests in a Real Property Partnership. See the accompanying prospectus for the Prudential Real Property Account.  Each Variable Investment Option has its own investment objective and associated risks, which are described in the accompanying Series Fund prospectus.  The income, gains, and losses of one Variable Investment Option have no effect on the investment performance of any other Variable Investment Option.

We do not promise that the Variable Investment Options will meet their investment objectives.  Amounts you allocate to the Variable Investment Options may grow in value, decline in value or grow less than you expect, depending on the investment performance of the Variable Investment Options you choose.  You bear the investment risk that the Variable Investment Options may not meet their investment objectives.  It is possible to lose your entire investment in the Variable Investment Options.  Although the Series Fund Money Market Portfolio is designed to be a stable investment option, it is possible to lose money in that Portfolio.  For example, when prevailing short-term interest rates are very low, the yield on the Money Market Portfolio may be so low that, when Separate Account and Contract charges are deducted, you experience a negative return.  See The Prudential Series Fund.

Learn More about the Variable Investment Options

Before allocating amounts to the Variable Investment Options, you should read the current Series Fund prospectus for detailed information concerning their investment objectives, strategies, and investment risks.

GENERAL DESCRIPTIONS OF THE PRUDENTIAL INSURANCE COMPANY OF AMERICA, THE REGISTRANT, AND THE SERIES FUND

The Prudential Insurance Company of America

The Prudential Insurance Company of America (“Prudential”, “us”, “we”, or “our”), a stock life insurance company, founded on October 13, 1875 under the laws of the state of New Jersey.  It is licensed to sell life insurance and annuities in the District of Columbia, Guam, U.S. Virgin Islands, and in all states.  Prudential’s principal Executive Office is located at 751 Broad Street, Newark, New Jersey 07102.

The Prudential Variable Appreciable Account

Prudential has established a Separate Account, the Prudential Variable Appreciable Account (the “Account” or the "Registrant "), to hold the assets that are associated with the Contracts.  The Account was established on August 11, 1987 under New Jersey law and is registered with the Securities and Exchange Commission (“SEC”) under the Investment Company Act of 1940 as a unit investment trust, which is a type of investment company.  The Account meets the definition of a "Separate Account" under the federal securities laws.  The Account holds assets that are segregated from all of Prudential's other assets.

Prudential is the legal owner of the assets in the Account.  Prudential will maintain assets in the Account with a total market value at least equal to the reserve and other liabilities relating to the variable benefits attributable to the Contracts.  In addition to these assets, the Account's assets may include funds contributed by Prudential to commence operation of the Account and may include accumulations of the charges we make against the Account.   From time to time Prudential will transfer capital contributions and earned fees and charges to its general account.   Prudential will consider any possible adverse impact the transfer might have on the Account before making any such transfer.

Income, gains and losses credited to, or charged against, the Account reflect the Account’s own investment experience and not the investment experience of Prudential’s other assets.  The assets of the Account may not be charged with liabilities that arise from any other business Prudential conducts.

11

We are obligated to pay all amounts promised to Contract Owners under the Contract .  The obligations to Contract Owners and beneficiaries arising under the Contracts are general corporate obligations of Prudential.

You may invest in one or a combination of the available Variable Investment Options.  When you choose a Variable Investment Option, we purchase shares of a Fund or a separate investment series of a Fund which are held as an investment for that option.  We hold these shares in the Account.  We may remove or add additional Variable Investment Options in the future.  The Account’s financial statements are available in the Statement of Additional Information to this prospectus.

The Prudential Series Fund

The Prudential Series Fund (the “Series Fund”) is registered under the Investment Company Act of 1940 as an open-end diversified management investment company.  Its shares are currently sold only to Separate Accounts of Prudential and certain other insurers that offer variable life insurance and variable annuity Contracts.

The Account will purchase and redeem shares from the Series Fund at net asset value.  Shares will be redeemed to the extent necessary for us to provide benefits under the Contract and to transfer assets from one Variable Investment Option to another, as requested by Contract Owners.  Any dividend or capital gain distribution received from a Portfolio of the Series Fund will be reinvested immediately at net asset value in shares of that Portfolio and retained as assets of the corresponding Variable Investment Option.

The Series Fund has a separate prospectus that is provided with this prospectus.  You should read the Series Fund prospectus before you decide to allocate assets to the Portfolios.  There is no assurance that the investment objectives of the Portfolios will be met.  There may be Portfolios described in the accompanying Fund prospectus that are not available on this product.  Please refer to the list below to see which Portfolios you may choose as your Variable Investment Options.

Investment Manager

Prudential Investments LLC (“PI”), a wholly-owned subsidiary of Prudential Financial, Inc., serves as the investment manager of the Series Fund Portfolios.

The Series Fund's Investment Management Agreement, on behalf of each Portfolio, with PI (the “Management Agreement”), provide that PI (the “Investment Manager”) will furnish each applicable Portfolio with investment advice and administrative services subject to the supervision of the Board of Trustees and in conformity with the stated policies of the applicable Portfolio.  The Investment Manager must also provide, or obtain and supervise, the executive, administrative, accounting, custody, transfer agent and shareholder servicing services that are deemed advisable by the Board.

The chart below reflects the Portfolios in which the Account invests, their investment objectives, and each Portfolio’s investment subadvisers.  The full names of the investment subadvisers are listed immediately following the chart.  For Portfolios with multiple subadvisers, each subadviser manages a portion of the assets for that Portfolio.

The Prudential Series Fund - Class 1 Shares
Portfolios	Objectives	Subadvisers
Conservative Balanced	Total investment return consistent with a conservatively managed diversified portfolio.	PIM QMA
Diversified Bond	High level of income over a longer term while providing reasonable safety of capital.	PIM
Equity	Long-term growth of capital.	Jennison
Flexible Managed	Total return consistent with an aggressively managed diversified portfolio.	PIM QMA
Global	Long-term growth of capital.	QMA LSV MCM T. Rowe Price William Blair
Government Income	High level of income over the long term consistent with the preservation of capital.	PIM

12

High Yield Bond	High total return.	PIM
Jennison	Long-term growth of capital.	Jennison
Money Market	Maximum current income consistent with the stability of capital and the maintenance of liquidity.	PIM
Natural Resources	Long-term growth of capital.	Jennison
Small Capitalization Stock	Long-term growth of capital.	QMA
Stock Index	Investment results that generally correspond to the performance of publicly-traded common stocks.	QMA
Value	Capital appreciation.	Jennison

Investment Subadvisers

·   Jennison Associates LLC (“Jennison”)

·   Prudential Investment Management, Inc. (“PIM”)

·   Quantitative Management Associates LLC (“QMA”)

·   LSV Asset Management (“LSV”)

·   Marsico Capital Management, LLC (“MCM”)

·   T. Rowe Price Associates, Inc. (“T. Rowe Price”)

·   William Blair & Company LLC (“William Blair”)

As an investment adviser, PI charges the Series Fund a daily investment management fee as compensation for its services.  PI pays each subadviser out of the fee that PI receives from the Series Fund.

More detailed information is available in the attached Series Fund prospectus.

In the future, it may become disadvantageous for Separate Accounts of variable life insurance and variable annuity Contracts to invest in the same underlying Variable Investment Options.  Neither the companies that invest in the Series Fund nor the Series Fund currently foresee any such disadvantage.  The Series Fund's Board of Directors intends to monitor events in order to identify any material conflict between variable life insurance and variable annuity Contract Owners and to determine what action, if any, should be taken.  Material conflicts could result from such things as:

(1)   changes in state insurance law;

(2)   changes in federal income tax law;

(3)   changes in the investment management of any Variable Investment Option; or

(4)   differences between voting instructions given by variable life insurance and variable annuity Contract Owners.

A Portfolio may have a similar name, investment objective, or investment policy resembling those of a mutual fund managed by the same investment adviser or subadviser that is sold directly to the public.  Despite such similarities, there can be no assurance that the investment performance of any such Portfolio will resemble that of the publicly available mutual fund.

Service Fees Payable to Prudential

Prudential has entered into an agreement with the Prudential Series Fund (the "Series Fund").  Under the terms of the agreement, Prudential provides administrative and support services to the Portfolios of the Series Fund for which it receives an annual fee from the investment adviser, distributor and/or the Portfolio based on the average assets allocated to the Portfolio.  The agreement, including the fees paid and services provided, can vary for each Portfolio.

Prudential and/or our affiliates may receive substantial and varying administrative service payments from the Series Fund or related parties.  These types of payments and fees are sometimes referred to as “revenue sharing” payments.  Administrative service payments partially compensate for providing administrative services with respect to Contract Owners invested indirectly in the Series Fund, which include duties such as recordkeeping, shareholder services, and the mailing of periodic reports.  The administrative service fees we receive originate from the assets of the Series Fund itself and/or the assets of the Series Fund’s investment adviser.  In either case, the existence of administrative service fees may tend to increase the overall cost of investing in the Series Fund.   In addition, because these fees are paid to us, allocations you make to the Portfolios may benefit us financially if these fees exceed the costs of the administrative support services.

13

We collect these payments and fees under agreements between us and the Series Fund’s principal underwriter, transfer agent, investment adviser and/or other entities related to the Series Fund.  As of May 1, 2010, the administrative service fee we receive is 0.05% of the average assets allocated to the Series Fund.

In addition to the payments that we receive from the Series Fund and/or their affiliates, the Series Fund and/or their affiliates may make payments to us and/or other insurers within the Prudential Financial group related to the offering of investment options within variable annuities or life insurance offered by different Prudential business units.

Voting Rights

We are the legal owner of the shares of the Series Fund associated with the Variable Investment Options.  However, we vote the shares of the Series Fund according to voting instructions we receive from Contract Owners.  We will mail you a proxy, which is a form you need to complete and return to us to tell us how you wish us to vote.  When we receive those instructions, we will vote all of the shares we own on your behalf in accordance with those instructions.  We vote shares for which we do not receive instructions, and any other shares that we own in our own right, in the same proportion as the shares for which instructions are received.  We may change the way your voting instructions are calculated if it is required by federal or state regulation.  We may also elect to vote shares that we own in our own right if the applicable federal securities laws or regulations, or their current interpretation, change so as to permit us to do so.

We may, if required by state insurance regulations, disregard voting instructions if they would require shares to be voted so as to cause a change in the sub-classification or investment objectives of one or more Variable Investment Options or to approve or disapprove an investment advisory Contract for the Series Fund.  In addition, we may disregard voting instructions that would require changes in the investment policy or investment adviser of one or more of the available Variable Investment Options, provided that we reasonably disapprove such changes in accordance with applicable federal or state regulations.  If we disregard Contract Owner voting instructions, we will advise Contract Owners of our action and the reasons for such action in the next available annual or semi-annual report.

Substitution of Variable Investment Options

We may substitute one or more of the Variable Investment Options.  We may also cease to allow investments in any existing Variable Investment Option.  We do this only if events such as investment policy changes or tax law changes make a Variable Investment Option unsuitable.  We would not do this without the approval of the Securities and Exchange Commission and any necessary state insurance departments.  You will be given specific notice in advance of any substitution we intend to make.

The Fixed Rate Option

You may choose to invest, initially or by transfer, all or part of your Contract Fund to the Fixed Rate Option.  This amount becomes part of Prudential's general account.  The general account consists of all assets owned by Prudential other than those in the Account and in other Separate Accounts that have been or may be established by Prudential.  Subject to applicable law, Prudential has sole discretion over the investment of the general account assets, and Contract Owners do not share in the investment experience of those assets.  Instead, Prudential guarantees that the part of the Contract Fund allocated to the Fixed Rate Option will accrue interest daily at an effective annual rate that Prudential declares periodically, but not less than an effective annual rate of 4%.  Prudential is not obligated to credit interest at a rate higher than an effective annual rate of 4%, although we may do so.

Transfers out of the Fixed Rate Option are subject to strict limits.  See Transfers/Restrictions on Transfers.  The payment of any Cash Surrender Value attributable to the Fixed Rate Option may be delayed up to six months.  See When Proceeds Are Paid.

Because of exemptive and exclusionary provisions, interests in the Fixed Rate Option under the Contract have not been registered under the Securities Act of 1933 and the general account has not been registered as an investment company under the Investment Company Act of 1940.  Accordingly, interests in the Fixed Rate Option are not subject to the provisions of these Acts, and Prudential has been advised that the staff of the SEC has not reviewed the disclosure in this prospectus relating to the Fixed Rate Option.  Any inaccurate or misleading disclosure regarding the Fixed Rate Option may, however, be subject to certain generally applicable provisions of federal securities laws.

The Prudential Variable Contract Real Property Account

The Prudential Variable Contract Real Property Account (the "Real Property Account") is a separate account of Prudential.   The Real Property Account , through a general partnership formed by Prudential and two of its wholly-owned subsidiaries, Pruco Life Insurance Company and Pruco Life Insurance Company of New Jersey, invests primarily in income-producing real property such as office buildings, shopping centers, agricultural land, hotels, apartments or industrial properties.  It also invests in mortgage loans and other real estate-related investments, including sale-

14

leaseback transactions.  It is not registered as an investment company under the Investment Company Act of 1940 and is therefore not subject to the same regulation as the Series Fund. The objectives of the Real Property Account and the Partnership are to preserve and protect capital, provide for compounding of income as a result of reinvestment of cash flow from investments, and provide for increases over time in the amount of such income through appreciation in asset value.

The Partnership has entered into an investment management agreement with Prudential Investment Management, Inc. (“PIM”), under which PIM selects the properties and other investments held by the Partnership.  Prudential charges the Partnership a daily fee for investment management, which amounts to 1.25% per year of the average daily gross assets of the Partnership.

A full description of the Real Property Account, its management, policies, restrictions, charges and expenses, investment risks, the Partnership's investment objectives, and all other aspects of the Real Property Account's and the Partnership's operations is contained in the attached prospectus for the Real Property Account.  It should be read together with this prospectus by any Contract Owner considering the real estate investment option.  There is no assurance that the investment objectives of the Real Property Account will be met.

CHARGES AND EXPENSES

This section provides a more detailed description of each charge that is described briefly in the SUMMARY OF CHARGES AND EXPENSES, beginning on page 1 of this prospectus.

The total amount invested in the Contract Fund, at any time, consists of the sum of the amount credited to the Variable Investment Options, the amount allocated to the Fixed Rate Option, plus any interest credited on amounts allocated to the Fixed Rate Option, the amount allocated to the Real Property Account, and the principal amount of any Contract loan plus the amount of interest credited to the Contract upon that loan.  See Loans.  Most charges, although not all, are made by reducing the Contract Fund.

In several instances we use the terms "maximum charge" and "current charge."  The "maximum charge", in each instance, is the highest charge that we may make under the Contract.  The "current charge", in each instance, is the amount that we now charge, which may be lower than maximum charges.  If circumstances change, we reserve the right to increase each current charge, up to the maximum charge, without giving any advance notice.

Current charges deducted from premium payments and the Contract Fund may change from time to time, subject to maximum charges. In deciding whether to change any of these current charges, we will periodically consider factors such as mortality, persistency, expenses, taxes and interest and/or investment experience to see if a change in our assumptions is needed.  Charges for taxes attributable to premiums will vary by state and locality.  Changes in other charges will be by class.  We will not recoup prior losses or distribute prior gains by means of these changes.

Taxes Attributable to Premiums

We deduct a charge for taxes attributable to premiums from each premium payment.  That charge is currently made up of two parts.

The first part is a charge for state and local premium taxes.  Tax rates vary from jurisdiction to jurisdiction and generally range from 0% to 5% (but may exceed 5% in some instances).

The second part is a charge for federal income taxes measured by premiums.  The current amount for this second part is 1.25% of the premium for Contracts issued on or after June 17, 1991, and 0% for Contracts issued prior to June 17, 1991.  We believe that this charge is a reasonable estimate of Prudential’s federal income taxes.

Under current law, we may incur state and local taxes (in addition to premium taxes) in several states.  Currently, these taxes are not significant and they are not charged against the Account.  If there is a material change in the applicable state or local tax laws, we may impose a corresponding charge against the Account.

Deduction from Premiums

We deduct a charge of $2 from each premium payment to cover the cost of collecting and processing premiums. Thus, if you pay premiums annually, this charge will be $2 per year.  If you pay premiums monthly, the charge will be $24 per year.  If you pay premiums more frequently, for example under a payroll deduction plan with your employer, the charge may be more than $24 per year.

15

Sales Load Charges

A sales charge, often called a “sales load”, is deducted to compensate us for the costs of selling the Contracts, including commissions, advertising, and the printing and distribution of prospectuses and sales literature.  The charge is equal to 0.5% of the "primary annual premium”.  The primary annual premium is equal to the Scheduled Premium that would be payable if premiums were being paid annually, less the two deductions from premiums (taxes attributable to premiums and the $2 processing charge, see Taxes Attributable to Premiums, and Deduction from Premiums) and less the $3 part of the monthly deduction. See Monthly Deductions from Contract Fund.  The sales load is charged whether the Contract Owner is paying premiums annually or more frequently. It is lower on Contracts issued on insureds over 60 years of age.  At present this sales charge is made only during the first five Contract Years or five years after an increase.  However, Prudential reserves the right to make this charge in all Contract Years.  To summarize, for most Contracts, this charge is somewhat less than 6% of the annual Scheduled Premium for each of the first five Contract Years and it may, but probably will not, continue to be charged after that.

There is a second sales load, which will be charged only if a Contract lapses or is surrendered before the end of the 10th Contract Year or 10 years from an increase in the Face Amount of insurance.  It is often described as a contingent deferred sales load (“CDSL”) and is described under Surrender Charges.

Cost of Insurance

We deduct a monthly COI charge proportionately from the dollar amounts held in each of the chosen investment options.  The purpose of this charge is to provide insurance coverage.  When an insured dies, the amount payable to the beneficiary (assuming there is no Contract Debt) is larger than the Contract Fund - significantly larger if the insured dies in the early years of a Contract.  The COI charges collected from all Contract Owners enables us to pay this larger Death Benefit.  The maximum COI charge is determined by multiplying the amount by which the Contract’s Death Benefit exceeds the Contract Fund ("net amount at risk") under a Contract by maximum COI rates.

The net amount at risk is affected by factors such as: investment performance, premium payments, and charges.  The maximum COI rates are based upon the 1980 Commissioners Standard Ordinary ("CSO") Mortality Tables and an insured's current Attained Age, sex (except where unisex rates apply), smoker/nonsmoker status, and extra rating class, if any.  At most ages, our current COI rates are lower than the maximum rates.  Current COI charges range from $0.06 to $83.34 per $1,000 of net amount at risk.

Certain Contracts, for example Contracts issued in connection with tax-qualified pension plans, may be issued on a “guaranteed issue” basis and may have current mortality charges that are different from those mortality charges for Contracts which are individually underwritten.  These Contracts with different current mortality charges may be offered to categories of individuals meeting eligibility guidelines determined by Prudential.

Monthly Deductions from the Contract Fund

We deduct the following monthly charges proportionately from the dollar amounts held in each of the chosen investment option[s].

(a)   We deduct an administrative charge based on the Face Amount of insurance.  This charge is intended to compensate us for things like processing claims, keeping records, and communicating with Contract Owners.  We deduct $3 per Contract and up to $0.03 per $1,000 of the Face Amount of insurance.  This charge also applies to  increases in the Face Amount of insurance.  Thus, for a Contract with a $75,000 Face Amount of insurance, the charge is $3 plus $2.25 for a total of $5.25 per month.  The current charge for Contracts with Face Amounts greater than $100,000 is lower.  The $0.03 per $1,000 of the Face Amount of insurance is reduced to $0.01 per $1,000 for that portion of the Face Amount that exceeds $100,000 and will not exceed $12.

(b)   We also deduct a charge of $0.01 per $1,000 of the Face Amount of insurance (excluding the automatic increase under Contracts issued on insureds of 14 years of age or less).  We deduct this charge for the risk we assume by guaranteeing that, no matter how unfavorable investment experience may be, the Death Benefit will never be less than the guaranteed minimum Death Benefit, so long as Scheduled Premiums are paid on or before the due date or during the grace period.  This charge and the administrative charge described in (a) above may be calculated together.

(c)   You may add one or more riders to the Contract.  Some riders are charged for separately.  If you add such a rider to the basic Contract, additional charges will be deducted.  See Riders.

(d)   If an insured is in a substandard risk classification (for example, a person with a health condition), additional charges will be deducted and the Scheduled Premium will be increased.

16

The earnings of the Account are taxed as part of the operations of Prudential.  Currently, no charge is being made to the Account for Prudential’s federal income taxes, other than the 1.25% charge for federal income taxes measured by premiums for Contracts issued on or after June 17, 1991.  There is no charge for federal income taxes for Contracts issued prior to June 17, 1991.  See Taxes Attributable to Premiums.  We periodically review the question of a charge to the Account for Prudential’s federal income taxes.  We may charge such a fee in the future for any federal income taxes that would be attributable to the Contracts.

Daily Deduction from the Variable Investment Options

Each day we deduct a charge from the assets of each of the Variable Investment Options in an amount equivalent to an effective annual rate of 0.90%.  For Contracts with Face Amounts of $100,000 or more, the current charge is 0.60%.  This charge is intended to compensate us for assuming mortality and expense risks under the Contract.  The mortality risk we assume is that insureds may live for shorter periods of time than we estimated when mortality charges were determined.  The expense risk we assume is that expenses incurred in issuing and administering the Contract will be greater than we estimated in fixing our administrative charges.  This charge is not assessed against amounts allocated to the Fixed Rate Option.

Surrender Charges

We assess additional sales load, the contingent deferred sales load (“CDSL”), if the Contract lapses or is surrendered during the first 10 Contract Years or 10 years from an increase in the Face Amount of insurance, or if a withdrawal is made under a Form A Contract during that 10 year period.  Subject to the additional limitations described below, for Contracts that lapse or are surrendered during the first five Contract Years the charge will be equal to 50% of the first year's primary annual premium.  The primary annual premium is equal to the Scheduled Premium that would be payable if premiums were being paid annually, less the two deductions from premiums (taxes attributable to premiums and the $2 processing charge, see Taxes Attributable to Premiums, and see Deduction from Premiums), and less the $3 part of the monthly administrative charge.  See Monthly Deductions from Contract Fund.  In the next five Contract Years that percentage is reduced uniformly on a daily basis until it reaches zero on the 10th Contract Anniversary.  Thus, for Contracts surrendered at the end of the sixth year, the maximum deferred sales charge will be 40% of the first year's primary annual premium, for Contracts surrendered at the end of year seven, the maximum deferred sales charge will be 30% of the first year's primary annual premium, and so forth.

The contingent deferred sales load is also subject to a further limit at older Issue Ages (approximately above age 67) in order to comply with certain requirements of state law.  Specifically, the contingent deferred sales load for such insureds is no more than $32.50 per $1,000 of the Face Amount.

The sales load is subject to a further important limitation that may, particularly for Contracts that lapse or are surrendered within the first five or six years, result in a lower contingent deferred sales load than that described above. (This limitation might also, under unusual circumstances, apply to reduce the monthly sales load deductions described in item (c) under Monthly Deductions from Contract Fund)

The limitation is based on a Guideline Annual Premium (“GAP”) that is associated with every Contract.  The GAP is an amount, generally larger than the gross annual Scheduled Premium for the Contract, determined actuarially in accordance with a definition set forth in a regulation of the Securities and Exchange Commission.  The maximum aggregate sales load that Prudential will charge (that is, the sum of the monthly sales load deduction and the contingent deferred sales charge) will not be more than 30% of the premiums actually paid until those premiums total one GAP plus no more than 9% of the next premiums paid until total premiums are equal to five GAPS, plus no more than 6% of all subsequent premiums.  If the sales charges described above would at any time exceed this maximum amount then the charge, to the extent of any excess, will not be made.

The following table shows the sales loads that would be paid by a 35 year old man under a Form B Contract with $100,000 Face Amount of insurance, both through the monthly deductions from the Contract Fund described above and upon the surrender of the Contract.  If the Contract is partially surrendered or the Face Amount is decreased during the first 10 years, a proportionate amount of the contingent deferred sales charge will be deducted from the Contract Fund.

17

Maximum Percentages for Surrender Charges
Surrender, Last Day of Year No.	Cumulative Scheduled Premiums Paid	Cumulative Sales Load Deducted from Contract Fund	Contingent Deferred Sales Load	Total Sales Load	Cumulative Total Sales Load as Percentage of Scheduled Premiums Paid
1 2 3 4 5 6 7 8 9 10	$  894.06  1,788.12  2,682.18  3,576.24  4,470.30  5,364.36  6,258.42  7,152.48  8,046.54  8,940.60	$  49.56     99.12   148.68   198.24   247.80   247.80   247.80   247.80   247.80   247.80	$218.66   367.64   398.55   414.00   414.00   331.00   248.00   166.00     83.00       0.00	$268.22   466.76   547.23   612.24   661.80   578.80   495.80   413.80   330.80   247.80	30.00% 26.10% 20.40% 17.12% 14.80% 10.79%    7.92%    5.79%    4.11%    2.77%

The percentages shown in the last column will not be appreciably different for insureds of different ages.

We deduct a charge of $5 per $1,000 of the Face Amount of insurance upon lapse or surrender to cover the cost of processing applications, conducting medical examinations, determining insurability and the insured's rating class, and establishing records.  However, this charge is reduced beginning on the Contract's fifth anniversary and declines daily at a constant rate until it disappears entirely at the end of the 10th Contract Year or 10 years from an increase in the Face Amount of insurance.  If the Contract is partially surrendered or the Face Amount is decreased during the first 10 years, we will deduct a proportionate amount of the charge from the Contract Fund.  We do not deduct a surrender charge from the Death Benefit if the insured dies during the first 10 Contract Years or 10 years from an increase in the Face Amount of insurance.

Transaction Charges

(a)   We charge a transaction fee equal to the lesser of $15 or 2% of the withdrawal amount in connection with each withdrawal.

(b)   We may charge a transaction fee of up to $15 for any change in the Face Amount of insurance.

(c)   We charge a transaction fee of up to $150 for Living Needs Benefit payments.

Portfolio Charges

We deduct charges from and pay expenses out of the Variable Investment Options as described in the Series Fund prospectus.

Rider Charges

Contract Owners may be able to obtain additional benefits, which may increase the Scheduled Premium.  These optional insurance benefits are described in what is known as a “rider” to the Contract.  We deduct a monthly charge from the Contract Fund if additional benefits cause an increase to your Scheduled Premium.

PERSONS HAVING RIGHTS UNDER THE CONTRACT

Contract Owner

Generally, the Contract Owner is the insured.  There are circumstances when the Contract Owner is not the insured.  There may also be more than one Contract Owner.  If the Contract Owner is not the insured or there is more than one Contract Owner, they will be named in an endorsement to the Contract.  This ownership arrangement will remain in effect unless you ask us to change it.

18

You may change the ownership of the Contract by sending us a request in a form that meets our needs.  We may ask you to send us the Contract to be endorsed.  If we receive your request in a form that meets our needs, and the Contract if we ask for it, we will file and record the change, and it will take effect as of the date the request is received in our Service Office.

While the insured is living, the Contract Owner is entitled to any Contract benefit and value.  Only the Contract Owner is entitled to exercise any right and privilege granted by the Contract or granted by us.  For example, the Contract Owner is entitled to surrender the Contract, access Contract values through loans or withdrawals, assign the Contract, and to name or change the beneficiary.

Beneficiary

The beneficiary is entitled to receive any benefit payable on the death of the insured.  You may designate or change a beneficiary by sending us a request in a form that meets our needs.  We may ask you to send us the Contract to be endorsed.  If we receive your request in a form that meets our needs, and the Contract if we ask for it, we will file and record the change and it will take effect as of the date you sign the request.  However, if we make any payment(s) before we receive the request, we will not have to make the payment(s) again.  When we are made aware of an assignment, we will recognize the assignee’s rights before any claim payments are made to the beneficiary.  When a beneficiary is designated, any relationship shown is to the insured, unless otherwise stated.

OTHER GENERAL CONTRACT PROVISIONS

Assignment

This Contract may not be assigned if the assignment would violate any federal, state or local law or regulation prohibiting sex distinct rates for insurance.  Generally, the Contract may not be assigned to an employee benefit plan or program without our consent.  We assume no responsibility for the validity or sufficiency of any assignment.  We will not be obligated to comply with any assignment unless we receive a copy at a Service Office.

Incontestability

We will not contest the Contract after it has been in-force during the insured’s lifetime for two years from the issue date, the reinstatement date, or the effective date of any change made to the Contract that requires our approval and would increase our liability.

Misstatement of Age or Sex

If the insured's stated age or sex or both are incorrect in the Contract, we will adjust the Death Benefit payable and any amount to be paid, as required by law, to reflect the correct age and sex.  If we learn of the inaccuracy after the insured’s death, any such benefit will be based on what the most recent deductions from the Contract Fund would have provided at the insured's correct age and sex.  If we learn of the inaccuracy before the insured’s death, the Face Amount will be adjusted to what the current scheduled premium would have purchased at the correct age and sex.

Settlement Options

The Contract grants to most Contract Owners, or to the beneficiary, a variety of optional ways of receiving Contract proceeds, other than in a lump sum.  A Prudential representative can explain these options upon request.

Suicide Exclusion

Generally, if the insured, whether sane or insane, dies by suicide within two years from the Contract Date, the Contract will end and we will return the premiums paid, less any Contract Debt, and less any withdrawals.  Generally, if the insured, whether sane or insane, dies by suicide after two years from the issue date, but within two years of the effective date of an increase in the Face Amount, we will pay, as to the increase in amount, no more than the sum of the premiums paid on and after the effective date of an increase.

RIDERS

Contract Owners may be able to obtain additional benefits, which may increase the Scheduled Premium.  If they do cause an increase in the Scheduled Premium, the charge for the additional benefits will be paid by making monthly deductions from the Contract Fund.  These optional insurance benefits will be described in what is known as a “rider” to the Contract. One rider pays certain premiums into the Contract if the insured dies in an accident.  Others waive certain

19

premiums if the insured is disabled within the meaning of the provision (or, in the case of a Contract issued on an insured under the age of 15, if the applicant dies or becomes disabled within the meaning of the provision).  Others pay certain premiums into the Contract if the insured dies within a stated number of years after issue; similar term insurance riders may be available for the insured's spouse or child.  The amounts of these benefits are fully guaranteed at issue and do not depend on the performance of the Account.  Certain restrictions may apply; they are clearly described in the applicable rider.

Under other riders, which provide a fixed amount of term insurance in exchange for increasing total scheduled annual premiums, the amount payable upon the death of the insured may be substantially increased for a given total initial annual premium.  The rider may be appropriate for Contract Owners who reasonably expect their incomes to increase regularly so that they will be able to afford the increasing scheduled annual premiums or who may be willing to rely upon their future Contract Fund values to prevent the Contract from lapsing in later years.

We will not pay a benefit on any Accidental Death Benefit type rider or make payments for any disability type rider if the death or injury is caused or contributed to by war or act of war, declared or undeclared, including resistance to armed aggression.  This restriction includes service in the armed forces of any country at war.

Any Prudential representative can explain these extra benefits further.  Samples of the provisions are available from Prudential upon written request.

Living Needs Benefit Rider - The Living Needs BenefitSMRider may be available on your Contract.  The benefit may vary by state.  There is no charge for adding the benefit to a Contract.  However, when a claim is paid under this rider, a reduction for early payment is applied and a processing fee of up to $150 per Contract will be deducted.

Subject to state regulatory approval, the Living Needs Benefit allows you to elect to receive an accelerated payment of all or part of the Contract's Death Benefit, adjusted to reflect current value, at a time when certain special needs exist.  The adjusted Death Benefit will always be less than the Death Benefit, but will never be lower than the Contract's Cash Surrender Value.  One or both of the following options may be available.  You should consult with a Prudential representative about whether additional options may be available.

The Terminal Illness Option is available on the Living Needs Benefit Rider when a licensed physician certifies the insured as terminally ill with a life expectancy of six months or less.  When that evidence is provided and confirmed by us, we will provide an accelerated payment of the portion of the Death Benefit selected by the Contract Owner as a Living Needs Benefit.  The Contract Owner may (1) elect to receive the benefit in a single sum or (2) receive equal monthly payments for six months.  If the insured dies before all the payments have been made, the present value of the remaining payments will be paid to the beneficiary designated in the Living Needs Benefit claim form.

The Nursing Home Option is available on the Living Needs Benefit Rider after the insured has been confined to an eligible nursing home for six months or more.  When a licensed physician certifies that the insured is expected to remain in an eligible nursing home until death, and that is confirmed by us, we will provide an accelerated payment of the portion of the Death Benefit selected by the Contract Owner as a Living Needs Benefit.  The Contract Owner may (1) elect to receive the benefit in a single sum or (2) receive equal monthly payments for a specified number of years (not more than 10 nor less than two), depending upon the age of the insured.  If the insured dies before all of the payments have been made, the present value of the remaining payments will be paid to the beneficiary designated in the Living Needs Benefit claim form in a single sum.

Subject to state approval, all or part of the Contract's Death Benefit may be accelerated under the Living Needs Benefit.  If the benefit is only partially accelerated, a Death Benefit of at least $25,000 must remain under the Contract. The minimum amount that may be accelerated for a Living Needs Benefit claim is $50,000.  However, we currently have an administrative practice to allow a reduced minimum of $25,000.  We reserve the right to discontinue this administrative practice in a non-discriminatory manner.

No benefit will be payable if you are required to elect it in order to meet the claims of creditors or to obtain a government benefit.  We can furnish details about the amount of Living Needs Benefit that is available to an eligible Contract Owner, and the effect on the Contract if less than the entire Death Benefit is accelerated.

You should consider whether adding this settlement option is appropriate in your given situation.  Adding the Living Needs Benefit to the Contract has no adverse consequences; however, electing to use it could.  With the exception of certain business-related Contracts, the Living Needs Benefit is excluded from income if the insured is terminally ill or chronically ill as defined in any applicable tax law (although the exclusion in the latter case may be limited). You should consult a tax adviser before electing to receive this benefit.  Receipt of a Living Needs Benefit payment may also affect your eligibility for certain government benefits or entitlements.

20

REQUIREMENTS FOR ISSUANCE OF A CONTRACT

As of November 12, 2001, Prudential no longer offered these Contracts for sale.  Generally, the Contract was issued on insureds below the age of 81.  You could have applied for a minimum initial guaranteed Death Benefit of $75,000; however, higher minimums applied to insureds over the age of 75.  Insureds 14 years of age or less may have applied for a minimum initial guaranteed Death Benefit of $50,000, which will increase by 50% at age 21.  Before issuing any Contract, Prudential required evidence of insurability, which may have included a medical examination.  Nonsmokers who met Preferred underwriting requirements were offered the most favorable premium rate.  A higher premium is charged if an extra mortality risk is involved.  Certain classes of Contracts, for example, a Contract issued in connection with a tax-qualified pension plan, may have been issued on a "guaranteed issue" basis and may have a lower minimum initial Death Benefit than a Contract that was individually underwritten.  These are the current underwriting requirements.  We reserve the right to change them on a non-discriminatory basis.

PREMIUMS

The Contract will not lapse because of unfavorable investment experience if you pay your Scheduled Premiums when due and take no withdrawals and have no outstanding loans.  If you pay premiums other than on a monthly basis, you will receive a notice that a premium is due about three weeks before each due date.  If you pay premiums monthly, we will send to you each year a book with 12 coupons that will serve as a reminder.  You may change the frequency of premium payments with our consent.

You may elect to have monthly premiums paid automatically under the “Pru-Matic Premium Plan” by pre-authorized transfers from a bank checking account.  You may also be eligible to have monthly premiums paid by pre-authorized deductions from an employer's payroll.

Your Contract shows two Scheduled Premium amounts.  The first or initial amount is payable from the time you purchase your Contract until the Contract Anniversary immediately following your 65th birthday or the Contract's seventh anniversary, whichever is later (the “Premium Change Date”).  The second Scheduled Premium Amount will be lower than the maximum amount stated in your Contract if your Contract Fund, net of any excess premiums, on the Premium Change Date is higher than it would have been had: (1) all Scheduled Premiums been paid when due; (2) maximum contractual charges been deducted; and (3) only a net rate of return of 4% been earned.  We will tell you what your second Scheduled Premium amount will be.

A significant feature of this Contract is that it permits you to pay greater than Scheduled Premiums.  You may make unscheduled premium payments occasionally or on a periodic basis.  If you wish, you may select a higher contemplated premium than the Scheduled Premium.  Prudential will then bill you for the chosen premium.  In general, the regular payment of higher premiums will result in higher Cash Surrender Values and, at least under Form B, in higher Death Benefits.  Conversely, a Scheduled Premium does not need to be made if the Contract Fund is large enough to enable the charges due under the Contract to be made without causing the Contract to lapse.  See LAPSE AND REINSTATEMENT.  The payment of premiums in excess of Scheduled Premiums may cause the Contract to become a Modified Endowment Contract for federal income tax purposes.  If this happens, loans and other distributions, which would otherwise not be taxable events, may be subject to federal income taxation.  See Tax Treatment of Contract Benefits.

If you choose to add a “rider” to your Contract that provides additional benefits (see RIDERS), the Scheduled Premium may be increased.  Some riders provide additional term insurance in a stated amount that does not vary with investment experience.  One of these “term riders” also allows you to choose different insurance amounts in different years.  For these riders, you may choose to pay a billed premium higher than your initial Scheduled Premium.  Under some circumstances, this could result in a higher Cash Surrender Value and Death Benefit than if the same premium had been paid under a Contract with the same Death Benefit but without the rider.  After several years, however, even if the billed premiums are paid on time, the Contract could lose its guarantee against lapse and could also have lower Cash Surrender Values.

You may choose a level premium option.  In that case, the Scheduled Premium, (the amount of which can be quoted by your Prudential representative), will be higher and it will not increase at age 65 (or seven years after issue, if later). The Contract will not lapse because of unfavorable investment experience if the level Scheduled Premium is paid  within 61 days after the Scheduled Premiums are due (or missed premiums are paid later with interest) and there are no withdrawals.

Prudential will generally accept any premium payment of at least $25.  Prudential reserves the right to limit unscheduled premiums to a total of $10,000 in any Contract Year, and to refuse to accept premiums that would immediately result in more than a dollar-for-dollar increase in the Death Benefit.  The flexibility of premium payments provides Contract Owners with different opportunities under the two Forms of the Contract.  Greater than scheduled payments under a Form A Contract increase the Contract Fund. Greater than scheduled payments under a Form B Contract increase both

21

the Contract Fund and the Death Benefit. Generally, any future increases in the Contract Fund will be less than under a Form A Contract because the monthly mortality charges under the Form B Contract will be higher to compensate for the higher amount of insurance. For all Contracts, the privilege of making large or additional premium payments offers a way of investing amounts, which accumulate without current income taxation.

Unless you elect otherwise, your Contract will include a “waiver of premium” provision under which Prudential will pay your Scheduled Premiums if you incur a disability before age 60 that lasts over six months.  If the disability begins after you become 60 and before you are 65, premiums will be paid only until the first Contract Anniversary following your 65th birthday.  The waiver of premium provision does not apply if you become disabled after your 65th birthday.

Allocation of Premiums

On the Contract Date, we deduct a $2 administrative charge and the charge for taxes attributable to premiums from the initial premium. Then the first monthly charges are deducted.  The remainder of the initial premium will be allocated among the Variable Investment Options, the Fixed Rate Option, or the Real Property Account according to the allocations you specified in the application form.  The invested portion of any part of the initial premium in excess of the Scheduled Premium is generally placed in the selected investment options on the date of receipt in Good Order at the Payment Office, but not earlier than the Contract Date.

After the Contract Date, we deduct a $2 administrative charge and the charge for taxes attributable to premiums from each subsequent premium payment.  After the deductions from premiums and the monthly charges are made, the remainder of each subsequent premium payment will be invested as of the end of the Valuation Period in which it is received in Good Order at the Payment Office, in accordance with the allocation you previously designated.  The “Valuation Period” means the period of time from one determination of the value of the amount invested in a Variable Investment Option to the next.  Such determinations are made when the net asset values of the Portfolios of the Series Fund are calculated, which is as of the close of regular trading on the New York Stock Exchange (generally 4:00 p.m. Eastern time.)

You may change the way in which subsequent premiums are allocated by giving written notice to a Service Office, by our website, provided you are enrolled to use Prudential Online® Account Access, or by telephoning a Service Office, provided the Contract is not in default and you are enrolled to use the Telephone Transfer System.  There is no charge for reallocating future premiums among the investment options.  If any portion of a premium is allocated to a particular Variable Investment Option, to the Fixed Rate Option or to the Real Property Account, that portion must be at least 10% on the date the allocation takes effect.  All percentage allocations must be in whole numbers. For example, 33% can be selected but 33⅓% cannot.  Of course, the total allocation to all selected investment options must equal 100%.

Transfers/Restrictions on Transfers

If the Contract is not in default, you may, up to four times each Contract Year, transfer amounts from one Variable Investment Option to another Variable Investment Option, to the Fixed Rate Option, or to the Real Property Account, without charge.  Additional transfers may be made with our consent.  Currently, we will allow you to make additional transfers.  For the first 20 transfers in a calendar year, you may transfer amounts by proper written notice to a Service Office, by our website, provided you are enrolled to use Prudential Online® Account Access, or by telephone, provided you are enrolled to use the Telephone Transfer System.  You will automatically be enrolled to use the Telephone Transfer System unless the Contract is jointly owned or you elect not to have this privilege.  Telephone transfers may not be available on Contracts that are assigned, depending on the terms of the assignment.  See Assignment.

After you have submitted 20 transfers in a calendar year, we will accept subsequent transfer requests only if they are in a form that meets our needs , bear an original signature in ink, and are sent to us by U.S. regular mail.  After you have submitted 20 transfers in a calendar year, a subsequent transfer request by telephone, fax or electronic means will be rejected, even in the event that it is inadvertently processed.

Multiple transfers that occur during the same day, but prior to the end of the Valuation Period for that day, will be counted as a single transfer.

Currently, certain transfers effected systematically under the dollar cost averaging program do not count towards the limit of four transfers per Contract Year or the limit of 20 transfers per calendar year.  In the future, we may count such transfers towards the limit.

Transfers among investment options will take effect as of the end of the Valuation Period in which a transfer request is received in Good Order at a Service Office.  The request may be in terms of dollars, such as a request to transfer $5,000 from one investment option to another, or may be in terms of a percentage reallocation among investment options.  In the latter case, as with premium reallocations, the percentages must be in whole numbers.

22

We will use reasonable procedures, such as asking you to provide certain personal information provided on your application for insurance, to confirm that instructions given by telephone are genuine.  We will not be held liable for following telephone instructions that we reasonably believe to be genuine.  We cannot guarantee that you will be able to get through to complete a telephone transfer during peak periods such as periods of drastic economic or market change.

Only one transfer from the Fixed Rate Option will be permitted during each Contract Year and only within 30 days following each Contract Anniversary.  The maximum amount that may be transferred out of the Fixed Rate Option each year is currently the greater of: (a) 25% of the amount in the Fixed Rate Option; and (b) $2,000.  Such transfer requests received prior to the Contract Anniversary will take effect on the Contract Anniversary.  Transfer requests received within the 30-day period beginning on the Contract Anniversary will take effect as of the end of the Valuation Period in which a transfer request is received in Good Order at a Service Office.  We may change these limits in the future or waive these restrictions for limited periods of time in a non-discriminatory way, (e.g., when interest rates are declining).  Transfers to and from the Real Property Account are subject to restrictions described in the attached prospectus for the Real Property Account.

The Contract was not designed for professional market timing organizations, other organizations, or individuals using programmed, large, or frequent transfers.  Large or frequent transfers among Variable Investment Options in response to short-term fluctuations in markets, sometimes called “market timing”, can make it very difficult for Fund advisers/sub-advisers to manage the Variable Investment Options.  Large or frequent transfers may cause the Fund to hold more cash than otherwise necessary, disrupt management strategies, increase transaction costs, or affect performance to the disadvantage of other Contract Owners.  If we (in our own discretion) believe that a pattern of transfers or a specific transfer request, or group of transfer requests, may have a detrimental effect on the performance of the Variable Investment Options, or we are informed by a Fund (e.g., by the Fund’s adviser/sub-adviser) that the purchase or redemption of shares in the Variable Investment Option must be restricted because the Fund believes the transfer activity to which such purchase or redemption relates would have a detrimental effect on performance of the affected Variable Investment Option, we may modify your right to make transfers by restricting the number, timing, and amount of transfers.  We reserve the right to prohibit transfer requests made by an individual acting under a power of attorney on behalf of more than one Contract Owner.  We will immediately notify you at the time of a transfer request if we exercise this right.

Any restrictions on transfers will be applied in a uniform manner to all persons who own Contracts like this one, and will not be waived, except as described above with respect to transfers from the Fixed Rate Option.  However, due to the discretion involved in any decision to exercise our right to restrict transfers, it is possible that some Contract Owners may be able to effect transactions that could affect Fund performance to the disadvantage of other Contract Owners.

In addition, Contract Owners who own variable life insurance or variable annuity Contracts that do not impose the transfer restrictions described above, might make more numerous and frequent transfers than Contract Owners who are subject to such limitations.  Contract Owners who are not subject to the same transfer restrictions may have the same underlying Variable Investment Options available to them, and unfavorable consequences associated with such frequent trading within the underlying Variable Investment Option (e.g., greater Portfolio turnover, higher transaction costs, or performance or tax issues) may affect all Contract Owners.

The Series Fund has adopted their own policies and procedures with respect to excessive trading of their respective shares, and we reserve the right to enforce these policies and procedures.  The prospectus for the Series Fund describes any such policies and procedures, which may be more or less restrictive than the policies and procedures we have adopted.  Under SEC rules, we are required to: (1) enter into a written agreement with each Portfolio or its principal underwriter that obligates us to provide to the Fund promptly upon request certain information about the trading activity of individual Contract Owners, and (2) execute instructions from the Fund to restrict or prohibit further purchases or transfers by specific Contract Owners who violate the excessive trading policies established by the Fund.  In addition, you should be aware that the Series Fund may receive “omnibus” purchase and redemption orders from other insurance companies or intermediaries such as retirement plans.  The omnibus orders reflect the aggregation and netting of multiple orders from individual owners of variable insurance Contracts and/or individual retirement plan participants.  The omnibus nature of these orders may limit the Series Fund in their ability to apply their excessive trading policies and procedures.  In addition, the other insurance companies and/or retirement plans may have different policies and procedures or may not have any such policies and procedures because of contractual limitations.  For these reasons, we cannot guarantee that the Series Fund (and thus Contract Owners) will not be harmed by transfer activity relating to other insurance companies and/or retirement plans that may invest in the Series Fund.

The Series Fund may assess a short term trading fee in connection with a transfer out of any available Variable Investment Option if the transfer occurs within a certain number of days following the date of allocation to the Variable Investment Option.  The Series Fund determines the amount of the short term trading fee and when the fee is imposed. The fee is retained by or paid to the Series Fund and is not retained by us.  The fee will be deducted from your Contract Value to the extent allowed by law.  At present, the Series Fund has not adopted a short-term trading fee.

23

Although our transfer restrictions are designed to prevent excessive transfers, they are not capable of preventing every potential occurrence of excessive transfer activity.

Dollar Cost Averaging

We offer a feature called Dollar Cost Averaging (“DCA”).  Upon your request, premiums will be allocated to the portion of the Money Market Subaccount used for this feature (the “DCA account”).  Designated dollar amounts will be transferred monthly from the DCA account to other investment options available under the Contract, excluding the Money Market Subaccount and the Fixed Rate Option, but including the Real Property Account.  Automatic monthly transfers must be at least 3% of the amount allocated to the DCA account (that is, if you designate $5,000, the minimum monthly transfer is $150), with a minimum of $20 transferred into any one investment option.  These amounts are subject to change at our discretion.  The minimum transfer amount will only be recalculated if the amount designated for transfer is increased.

When you establish DCA at issue, you must allocate to the DCA account the greater of $2,000 or 10% of the initial premium payment.  When you establish DCA after issue, you must allocate to the DCA account at least $2,000. These minimums are subject to change at our discretion. After DCA has been established and as long as the DCA account has a positive balance, you may allocate or transfer amounts to the DCA account, generally subject to the limitations on premium payments and transfers.  In addition, if you pay premiums on an annual or semi-annual basis, and you have already established DCA, your premium allocation instructions may include an allocation of all or a portion of all your premium payments to the DCA account.

Each automatic monthly transfer will take effect as of the end of the Valuation Period on the Monthly Date, provided the New York Stock Exchange (“NYSE”) is open on that date.  If the NYSE is not open on the Monthly Date, the transfer will take effect as of the end of the Valuation Period on the next day that the NYSE is open.  If the Monthly Date does not occur in a particular month (e.g., February 30), the transfer will take effect as of the end of the Valuation Period on the last day of the month that the NYSE is open.  Automatic monthly transfers will continue until the balance in the DCA account reaches zero, or until the Contract Owner gives notification of a change in allocation or cancellation of the feature.  If you have an outstanding premium allocation to the DCA account, but your DCA option has previously been canceled, premiums allocated to the DCA account will be allocated to the Money Market Subaccount.  Currently there is no charge for using the DCA feature.

DEATH BENEFITS

Contract Date

There is no insurance under this Contract until the minimum initial premium is paid.  If a medical examination is required, the Contract Date will ordinarily be the date the examination is completed.  Under certain circumstances, we may allow the Contract to be backdated up to six months for the purpose of lowering the insured's Issue Age, but only to a date not earlier than six months prior to the application date.  This may be advantageous for some Contract Owners as a lower Issue Age may result in lower current charges.

When Proceeds Are Paid

Generally, we will pay any Death Benefit, Cash Surrender Value, loan proceeds or partial withdrawal within seven days after all the documents required for such a payment are received at the Payment Office.  Other than the Death Benefit, which is determined as of the date of death, the amount will be determined as of the end of the Valuation Period in which the necessary documents are received at a Service Office.  However, we may delay payment of proceeds from the Variable Investment Option[s] and the variable portion of the Death Benefit due under the Contract if the disposal or valuation of the Account's assets is not reasonably practicable because the New York Stock Exchange is closed for other than a regular holiday or weekend, trading is restricted by the SEC, or the SEC declares that an emergency exists.

We have the right to delay payment of the Cash Surrender Value attributable to: (1) the Fixed Rate Option; and (2) Contracts in-force as extended term insurance, for up to six months (or a shorter period if required by applicable law).  We will pay interest of at least 3% per year if such a payment is delayed for more than 30 days (or a shorter period if required by applicable law).

Death Claim Settlement Options

The beneficiary may choose to receive death claim proceeds by any of the settlement options described in the Contract or by payment of a lump sum amount.  In addition to the settlement options described in your Contract, the beneficiary may choose the payment of death claim proceeds, by way of Prudential's retained asset settlement option (the "Alliance Account").  Upon verification of a death claim, Prudential will provide a kit to the beneficiary, which includes: (1) an

24

account certificate describing the death claim proceeds, the current interest rate, and the terms of the Alliance Account; (2) a guide that explains how the Alliance Account works; and (3) checks and a checkbook, that the beneficiary can use to access the available amount of death claim proceeds.  Any Prudential representative authorized to sell this Contract can explain this option upon request.

Types of Death Benefit

You may have selected from two types of Death Benefit at issue.  A Contract with a Form A Death Benefit has a Death Benefit, which will generally equal the initial Face Amount.  Favorable investment results and additional premium payments will generally increase the Cash Surrender Value and decrease the net amount at risk and result in lower charges. This type of Death Benefit does not vary with the investment performance of the investment options you selected, except when the premiums you pay or favorable investment performance causes the Contract Fund to grow to the point where we may increase the Death Benefit to ensure that the Contract will satisfy the Internal Revenue Code’s definition of life insurance.  The Scheduled Premium shown in the Contract will be the same for a given insured, regardless of what Contract Form you chose.  See How a Contract's Cash Surrender Value Will Vary.

A Contract with a Form B Death Benefit has a Death Benefit, which will generally equal the Face Amount plus, if any, excess Contract Fund over the Tabular Contract Fund Value.  Favorable investment performance and additional premium payments will generally increase your Contract's Death Benefit and Cash Surrender Value.  However, the increase in the Cash Surrender Value for Form B Contract may be less than the increase in Cash Surrender Value for a Form A Contract because a Form B Contract has a greater cost of insurance charge due to a greater net amount at risk.  As long as the Contract is not in default, there have been no withdrawals, and there is no Contract Debt, the Death Benefit may not fall below the Face Amount stated in the Contract, plus the amount, if any, by which the Contract Fund exceeds the Tabular Contract Fund Value.

Both Form A and Form B Contracts covering insureds of 14 years of age or less contain a special provision providing that the Face Amount of insurance will automatically be increased, on the Contract Anniversary after the insured's 21st birthday, to 150% of the initial Face Amount, so long as the Contract is not then in default.  This new Face Amount becomes the new guaranteed minimum Death Benefit.  The Death Benefit will also usually increase, at the same time, by the same dollar amount.  In certain circumstances, however, it may increase by a smaller amount.  This increase in Death Benefit will also generally increase the net amount at risk under the Contract, thus increasing the mortality charge deducted each month from amounts invested under the Contract.  See CHARGES AND EXPENSES.  The automatic increase in the Face Amount of insurance may affect the level of future premium payments you can make without causing the Contract to be classified as a Modified Endowment Contract.  See Tax Treatment of Contract Benefits.

Contract Owners of a Form A Contract should note that any withdrawal may result in a reduction of the Face Amount and the deduction of any applicable surrender charges.  We will not allow you to make a withdrawal that will decrease the Face Amount below the minimum Face Amount.  For Form B Contracts, withdrawals will not change the Face Amount, will not incur a surrender charge for a withdrawal, and are not restricted if a minimum size Contract was purchased.  See Withdrawals.

Increases in the Face Amount

After your first Contract Anniversary, you may increase your amount of insurance by increasing the Face Amount of the Contract (which is also the guaranteed minimum Death Benefit).  The increase will be subject to state approval and the underwriting requirements we determine.

The following conditions must be met:

(1)you must ask for the change in a form that meets our needs;

(2)the amount of the increase in the Face Amount  must be at least $25,000;

(3)you must prove to us that the insured is insurable for any increase;

(4)the Contract must not be in default;

(5)you must pay an appropriate premium at the time of the increase;

(6)we must not be paying premiums into the Contract as a result of the insured’s total disability; and

(7)if we ask you to do so, you must send us the Contract to be endorsed.

If we approve the change, we will send you new Contract Data pages showing the amount and effective date of the change and the recomputed charges, values and limitations.  If the insured is not living on the effective date, the change will not take effect.  Currently, no transaction charge is being made in connection with an increase in the Face Amount.  However, we reserve the right to deny the increase if we change any of the bases on which benefits and charges are calculated for newly issued Contracts between the Contract Date and the date of your requested increase.

25

An increase in the Face Amount resulting in a total Face Amount under the Contract of at least $100,000 may, subject to strict underwriting requirements, render the Contract eligible for a Select Rating for a nonsmoker, which provides lower current cost of insurance rates.

Upon an increase in the Face Amount, we will recompute the Contract's Scheduled Premiums, deferred sales and transaction charges, tabular values, and monthly deductions from the Contract Fund.  Requests for increases received within six months after the most recent Contract Anniversary will be effective on your choice of the prior or the next Contract Anniversary and is limited only by applicable state law.  Requests for increases received more than six months after the most recent Contract Anniversary will be effective on the following anniversary.  A payment will be required on the date of increase, which will depend, in part, on the Contract Anniversary you select for the recomputation.  We will tell you the amount of the required payment.  You should also note that an increase in the Face Amount may cause the Contract to be classified as a Modified Endowment Contract. See Tax Treatment of Contract Benefits.  Therefore, before increasing the Face Amount, you should consult your own tax adviser and a Prudential representative.

If the increase is approved, the new insurance will take effect once we receive the proper forms, any medical evidence necessary to underwrite the additional insurance, and any additional premium amount needed for the increase.

In order to determine the sales load that will be charged after the increase and upon any subsequent lapse or surrender, the Contract is treated like two separate Contracts.  A “base Contract” representing the Contract before the increase and an “incremental Contract” representing the increase viewed as a separate Contract.  At the time of the increase, a certain portion of the Contract Fund may be allocated to the incremental Contract as a prepayment of premiums for purposes of the sales load limit.  That portion is equal to the Guideline Annual Premium (“GAP”) of the incremental Contract divided by the GAP of the entire Contract after the increase.  Premium payments made after the increase are also allocated between the base Contract and the incremental Contract for purposes of the sales load limit.  A portion of each premium payment after the increase is allocated to the increase based on the GAP for the incremental Contract divided by the GAP for the entire Contract.  A monthly deduction equal to 0.5% of the primary annual premium for each part of the Contract (i.e., the base and incremental Contracts, respectively) will be made until each part of the Contract has been in-force for five years, although we reserve the right to continue to make this deduction thereafter.  Similarly, any amount of sales charges upon lapse or surrender, the application of the overall limitation upon sales load, and the contingent deferred sales load will be determined as if there were two separate Contracts rather than one.  Thus, a Contract Owner considering an increase in the Face Amount should be aware that such an increase will incur charges comparable to the purchase of a new Contract.

If you elect to increase the Face Amount of your Contract, you will receive a “free-look” right, which applies only to the increase in the Face Amount, not the entire Contract.  The “free-look” right is comparable to the right afforded to the purchaser of a new Contract.  You may exercise the “free-look” right within 45 days after execution of the application for the increase or within 10 days after you receive your Contract with the increase, whichever is later.  Some states allow a longer period of time during which a Contract may be returned for a refund.  See Canceling the Contract.  Charges deducted after the increase will be recomputed as though no increase had been applied.

You may transfer the total amount attributable to the increase in the Face Amount from the Variable Investment Options or the Real Property Account to the Fixed Rate Option at any time within two years after an increase in the Face Amount.

Decreases in the Face Amount

You have the option of decreasing the Face Amount of insurance of the Contract without withdrawing any Cash Surrender Value.  If a change in circumstances causes you to determine that your amount of insurance is greater than needed, a decrease will reduce your insurance protection and the monthly deductions for the cost of insurance.

The following conditions must be met:

(1)   the amount of the decrease must be at least $10,000;

(2)   the Face Amount of insurance after the decrease must be at least equal to the minimum Face Amount of insurance applicable to your Contract; and

(3)   if we ask you to do so, you must send us the Contract to be endorsed.

If we approve the decrease, we will send you new Contract Data pages showing the new Face Amount, tabular values, Scheduled Premiums, charges, values, and limitations.  A Contract is no longer eligible for the Select Rating if the Face Amount is reduced below $100,000.  Currently, a $15 transaction fee is deducted from the Contract Fund in connection with a decrease in the Face Amount of insurance.  We will also reduce your Contract Fund value by deducting a proportionate part of the contingent deferred sales and surrender charges, if any.

We may decline a decrease in the Face Amount if we determine it would cause the Contract to fail to qualify as "life insurance" for purposes of Section 7702 of the Internal Revenue Code.  See Tax Treatment of Contract Benefits.

26

It is important to note, however, that if the Face Amount is decreased there is a possibility that the Contract will be classified as a Modified Endowment Contract.  See Tax Treatment of Contract Benefits.  You should consult with your tax adviser and your Prudential representative before requesting any decrease in the Face Amount.

CONTRACT VALUES

Surrender of a Contract

You may surrender your Contract, in whole or in part, for its Cash Surrender Value while the insured is living.  A partial surrender involves splitting the Contract into two Contracts.  One Contract is surrendered for its Cash Surrender Value; the other is continued in-force on the same terms as the original Contract except that premiums and Cash Surrender Values will be based on the new Face Amount.  You will be given a new Contract document.  The Cash Surrender Value and the guaranteed minimum Death Benefit of the new Contract will be proportionately reduced. The reduction is based upon the Face Amount of insurance.  The Face Amount of insurance must be at least equal to the minimum Face Amount applicable to the insured’s Contract.  See REQUIREMENTS FOR ISSUANCE OF A CONTRACT.  For reduced paid-up Contracts, both the Death Benefit and the guaranteed minimum Death Benefit will be reduced.

To surrender your Contract, we may require you to deliver or mail the following items, in Good Order to a Service Office: the Contract, a signed request for surrender, and any tax withholding information required under federal or state law.  Generally, we will pay your Contract’s Cash Surrender Value within seven days after all the documents required for such a payment are received in Good Order at a Service Office.  Surrender of all or part of a Contract may have tax consequences.  See Tax Treatment of Contract Benefits.

Additional requirements exist if you are exchanging your Contract for a new one at another insurance company.  We specifically require a properly signed assignment to change ownership of your Contract to the new insurer and a request for surrender, signed by an authorized officer of the new insurer.  The new insurer should submit these documents directly to Prudential by sending them in Good Order to our Customer Value Service Center in Minneapolis.  Generally, we will pay your Contract’s Cash Surrender Value to the new insurer within seven days after all the documents required for such a payment are received in Good Order at our Customer Value Service Center.

How a Contract’s Cash Surrender Value Will Vary

The Cash Surrender Value (taking into account the deferred sales and transaction charges, if any) will be determined as of the end of the Valuation Period in which a surrender request is received in Good Order at the Customer Value Service Center.  The Contract’s Cash Surrender Value on any date will be the Contract Fund less any deferred sales and transaction charges, if any, and less any Contract Debt.  The Contract Fund value changes daily, reflecting:

(1)   increases or decreases in the value of the Variable Investment Option[s];

(2)   increases or decreases in the value of the Real Property Account, if that option has been selected;

(3)   interest credited on any amounts allocated to the Fixed Rate Option; and

(4)   the daily asset charge for mortality and expense risks assessed against the Variable Investment Options.

The Contract Fund value also changes to reflect the receipt of premium payments after any charges are deducted and the monthly deductions described under CHARGES AND EXPENSES.  Upon request, we will tell you the Cash Surrender Value of your Contract.  It is possible that the Cash Surrender Value of a Contract could decline to zero because of unfavorable investment performance or outstanding Contract Debt, even if you continue to pay Scheduled Premiums when due.

Loans

You may borrow an amount up to the “loan value” of your Contract, using the Contract as the only security for the loan.  The loan value is equal to (1) 90% of an amount equal to the portion of the cash value attributable to the Variable Investment Options; plus (2) 100% of an amount equal to the portion of the cash value attributable to the Fixed Rate Option and to prior loan[s] supported by the Fixed Rate Option, minus the portion of any charges attributable to the Fixed Rate Option.  The minimum loan amount you may borrow at any one time is $200, unless the proceeds are used to pay premiums on your Contract.

If you request a loan you may choose one of two interest rates.  You may elect to have interest charges accrued daily at a fixed effective annual rate of 5.5%.  Alternatively, you may elect a variable interest rate that changes from time to time.  You may switch from the fixed to variable interest loan provision, or vice-versa, with our consent.

If you elect the variable loan interest rate provision, interest charged on any loan will accrue daily at an annual rate we determine at the start of each Contract Year (instead of at the fixed 5.5% rate).  This interest rate will not exceed the

27

greatest of: (1) the “Published Monthly Average” for the calendar month ending two months before the calendar month of the Contract Anniversary; (2) 5%; or (3) the rate permitted by law in the state of issue of the Contract.  The “Published Monthly Average” means Moody's Corporate Bond Yield Average - Monthly Average Corporate, as published by Moody's Investors Service, Inc. or any successor to that service, or if that average is no longer published, a substantially similar average established by the insurance regulator where the Contract is issued. For example, the Published Monthly Average in 2009 ranged from 5.61% to 6.85%.

Interest payments on any loan are due at the end of each Contract Year.  If interest is not paid when due, it is added to the principal amount of the loan.  The Contract Debt is the principal amount of all outstanding loans plus any interest accrued to date.  If at any time your Contract Debt exceeds the Contract Fund, we will notify you of its intent to terminate the Contract in 61 days, within which time you may repay all or enough of the loan to keep the Contract in-force.  If the policy is terminated for excess Contract Debt, it cannot be reinstated.

When a loan is made, an amount equal to the loan proceeds is transferred out of the applicable investment options.  The reduction is generally made in the same proportions as the value that each investment option bears to the total value of the Contract.

·   While a fixed rate loan is outstanding, the amount that was transferred will continue to be treated as part of the Contract Fund, but it will be credited with the assumed rate of return of 4% rather than with the actual rate of return of the applicable investment options.

·   While a variable rate loan is outstanding, the amount that was transferred will continue to be treated as part of the Contract Fund, but it will be credited with a rate which is less than the variable loan interest rate for the Contract Year by no more than 1%, rather than with the actual rate of return of the applicable investment options.  Currently, we credit such amounts at a rate that is 1% less than the loan interest rate for the Contract Year.  If a loan remains outstanding at a time when we fixed a new rate, the new interest rate applies as of the next Contract Anniversary.

A loan will not affect the amount of the premiums due.  If the Death Benefit becomes payable while a loan is outstanding, or should the Contract be surrendered, any Contract Debt will be deducted from the Death Benefit or the Cash Surrender Value otherwise payable.

A loan will have a permanent effect on a Contract's Cash Surrender Value and may have a permanent effect on the Death Benefit, even if the loan is fully repaid, because the investment results of the selected investment options will apply only to the amount remaining in those investment options.  The longer the loan is outstanding, the greater the effect is likely to be. The effect could be favorable or unfavorable.  If investment results are greater than the rate being credited upon the amount of the loan balance while the loan is outstanding, the Contract values will not increase as rapidly as they would have if no loan had been made.  If investment results are below that rate, Contract values will be higher than they would have been had no loan been made.

Loan repayments are applied to reduce the total outstanding Contract Debt, which is equal to the principal plus accrued interest.  Interest accrues daily on the total outstanding Contract Debt, and making a loan repayment will reduce the amount of interest accruing.  If your repayment is received within 21 days of the Contract Anniversary, it will be applied first to the accrued interest, then to capitalized interest, with any remainder applied to the original loan principal.  Most repayments received prior to this time period will be applied first to capitalized interest, then to accrued interest, then to the original loan principal.

The amount of a loan repayment that is applied to the principal loan amount is first allocated based on the same proportion in which it was taken from the Fixed Rate Option and Variable Investment Options, including the Real Property Account.  The variable portion is then applied proportionately to the applicable Variable Investment Options, based on the balances in those options, at the time of the loan repayment.

If you fail to keep the Contract in-force, the amount of unpaid Contract Debt will be treated as a distribution and will be immediately taxable to the extent of gain in the Contract.  Reinstatement of the Contract after lapse will not eliminate the taxable income, which we are required to report to the Internal Revenue Service.  See LAPSE AND REINSTATEMENT and Tax Treatment of Contract Benefits - Pre-Death Distributions.

Loans you take against the Contract are ordinarily treated as debt and are not considered distributions subject to tax. However, you should know that the Internal Revenue Service may take the position that the variable rate loan should be treated as a distribution for tax purposes because of the relatively low differential between the loan interest rate and the Contract’s crediting rate.  Distributions are subject to income tax.  Were the Internal Revenue Service to take this position, we would take reasonable steps to attempt to avoid this result, including modifying the Contract’s loan provisions, but cannot guarantee that such efforts would be successful.

Loans from Modified Endowment Contracts may be treated for tax purposes as distributions of income.  See Tax Treatment of Contract Benefits.

28

Withdrawals

You may withdraw a portion of the Contract's Cash Surrender Value without surrendering the Contract, subject to the following restrictions:

(a)   The Contract Fund after the withdrawal must not be less than the Tabular Contract Fund value.  (A Table of Tabular Contract Fund Values is included in the Contract; the values increase with each year the Contract remains in-force.)

(b)   The amount withdrawn may not be larger than an amount sufficient to reduce the Cash Surrender Value to zero.

(c)   The withdrawal amount must be at least $2,000 under a Form A Contract and at least $500 under a Form B Contract.

(d)   You may make no more than four withdrawals in each Contract Year.

There is a transaction fee for each withdrawal which is the lesser of: (a) $15 and; (b) 2% of the withdrawal amount.  An amount withdrawn may not be repaid except as a scheduled or unscheduled premium subject to the applicable charges.  Upon request, we will tell you how much you may withdraw.

Under a Form A Contract, the Face Amount of insurance is reduced by no more than the withdrawal amount.  We will not permit a withdrawal if it will result in a new Face Amount of less than the minimum Face Amount shown under List of Contract Minimums in your Contract Data pages.  If a withdrawal is made before the end of the 10th Contract Year, the Contract Fund may also be reduced by a proportionate amount of any surrender charges, based upon the percentage reduction in the Face Amount.  Form A Contract Owners who make a withdrawal will be sent replacement Contract pages showing the new Face Amount, Scheduled Premiums, maximum surrender charges, Tabular values, and monthly deductions.

It is important to note that, if the Face Amount is decreased, there is a possibility that the Contract might be classified as a Modified Endowment Contract.  Before making any withdrawal that causes a decrease in the Face Amount, you should consult with your tax adviser and your Prudential representative.  See Tax Treatment of Contract Benefits.

Under a Form B Contract, the Cash Surrender Value and the Contract Fund value are reduced by the amount of the withdrawal, and the Death Benefit is reduced accordingly.  Neither the Face Amount of insurance nor the amount of Scheduled Premiums will change due to a withdrawal of excess Cash Surrender Value under a Form B Contract.  No surrender charges will be assessed for a withdrawal under a Form B Contract.  Withdrawal of any portion of the Cash Surrender Value increases the risk that the Contract Fund may be insufficient to provide Contract benefits.  If such a withdrawal is followed by unfavorable investment experience, the Contract may go into default, even if Scheduled Premiums continue to be paid when due.  Withdrawal of part of the Cash Surrender Value may have tax consequences.  See Tax Treatment of Contract Benefits.

Generally, we will pay any withdrawal amount within seven days after all the documents required for such a payment are received in Good Order at a Service Office.  See When Proceeds Are Paid.

A Contract returned during the “free-look” period shall be deemed void from the beginning, and not considered a surrender or withdrawal.

LAPSE AND REINSTATEMENT

If Scheduled Premiums are paid on or before each due date or received within 61 days after the Scheduled Premiums are due, (or missed premiums are paid later with interest) and there are no withdrawals, a Contract will remain in-force even if the investment results of that Contract's Variable Investment Option[s] have been so unfavorable that the Contract Fund has decreased to zero or less.

In addition, even if a Scheduled Premium is not paid, the Contract will remain in-force as long as the Contract Fund on any Monthly Date is equal to or greater than the Tabular Contract Fund Value on the next Monthly Date.  (A Table of Tabular Contract Fund Values is included in the Contract; the values increase with each year the Contract remains in-force.)  This could occur because of such factors as favorable investment experience, deduction of less than the maximum permissible charges, or the previous payment of greater than Scheduled Premiums.

However, if a Scheduled Premium is not paid, and the Contract Fund is insufficient to keep the Contract in-force, the Contract will go into default.  Should this happen, we will send the Contract Owner a notice of default setting forth the payment necessary to keep the Contract in-force on a premium paying basis.  This payment must be received at the Payment Office within the 61 day grace period after the notice of default is mailed or the Contract will lapse.  A Contract that lapses with an outstanding Contract loan may have tax consequences.  See Tax Treatment of Contract Benefits.

29

A Contract that has lapsed may be reinstated within five years after the date of default unless the Contract has been surrendered for its Cash Surrender Value.  To reinstate a lapsed Contract, we require renewed evidence of insurability, and submission of certain payments due under the Contract.

If a Contract does lapse, it may still provide some benefits.  Those benefits are described under Options on Lapse, below.

Options on Lapse

If your Contract does lapse, it will still provide some benefits.  You can receive the Cash Surrender Value by making a request of Prudential’s prior to the end of the 61 day grace period.  You may also choose one of the three options described below for which no further premiums are payable.

1.   Fixed Extended Term Insurance.  With two exceptions explained below, if you do not communicate at all with Prudential, life insurance coverage will continue for a length of time that depends on the Cash Surrender Value on the date of default (which reflects the deduction of the deferred sales load, administrative charges, and Contract Debt, if any), the amount of insurance, and the age and sex (except where unisex rates apply) of the insured.  The insurance amount will be what it would have been on the date of default taking into account any Contract Debt on that date.  The amount will not change while the insurance stays in-force.  This benefit is known as extended term insurance.  If you request, we will tell you in writing how long the insurance will be in effect.  Extended term insurance has a Cash Surrender Value, but no loan value.

Contracts issued on the lives of certain insureds in high risk rating classes and Contracts issued in connection with tax qualified pension plans will include a statement that extended term insurance will not be provided.  In those cases, variable reduced paid-up insurance will be the automatic benefit provided on lapse.

2.   Variable Reduced Paid-Up Insurance.  Variable reduced paid-up insurance provides insurance coverage for the lifetime of the insured.  The initial insurance amount will depend upon the Cash Surrender Value on the date of default (which reflects the deduction of the deferred sales load, administrative charges, and Contract Debt, if any), and the age and sex of the insured.  This will be a new guaranteed minimum Death Benefit.  Aside from this guarantee, the Cash Surrender Value and the amount of insurance will vary with investment performance in the same manner as the paid-up Contract described earlier.  Variable reduced paid-up insurance has a loan privilege identical to that available on premium paying Contracts. See Loans.  Acquisition of reduced paid-up insurance may result in your Contract becoming a Modified Endowment Contract.  See Tax Treatment of Contract Benefits.

As explained above, variable reduced paid-up insurance is the automatic benefit on lapse for Contracts issued on certain insureds.  Owners of other Contracts who want variable reduced paid-up insurance must ask for it in writing, in a form that meets Prudential’s needs, within three months of the date of default; it will be available to such Contract Owners only if the initial amount of variable reduced paid-up insurance would be at least $5,000. This minimum is not applicable to Contracts for which variable reduced paid-up insurance is the automatic benefit upon lapse.

3.   Fixed Reduced Paid-Up Insurance.  This insurance continues for the lifetime of the insured but at an insurance amount that is lower than that provided by fixed extended term insurance.  It will increase in amount only if dividends are paid and it will decrease only if you take a Contract loan.  Upon request, we will tell you what the amount of insurance will be.  Fixed paid-up insurance has a Cash Surrender Value and a loan value both of which will gradually increase in value.  It is possible for this Contract to be classified as a Modified Endowment Contract if this option is exercised.  See Tax Treatment of Contract Benefits.

TAXES

Tax Treatment of Contract Benefits

This summary provides general information on the federal income tax treatment of the Contract. It is not a complete statement of what the federal income taxes will be in all circumstances.  It is based on current law and interpretations, which may change.  It does not cover state taxes or other taxes.  It is not intended as tax advice.  You should consult your own tax adviser for complete information and advice.

Treatment as Life Insurance.  The Contract must meet certain requirements to qualify as life insurance for tax purposes.  These requirements include certain definitional tests and rules for diversification of the Contract's investments.  For further information on the diversification requirements, see Taxation of the Fund in the statement of additional information for the Series Fund.

30

We believe we have taken adequate steps to insure that the Contract qualifies as life insurance for tax purposes. Generally speaking, this means that:

·   you will not be taxed on the growth of the funds in the Contract, unless you receive a distribution from the Contract, or if the Contract lapses or is surrendered, and

·   the Contract's Death Benefit will generally be income tax free to your beneficiary.  However, your Death Benefit may be subject to estate taxes.

Although we believe that the Contract should qualify as life insurance for tax purposes, there are some uncertainties, particularly because the Secretary of Treasury has not yet issued permanent regulations that bear on this question. Accordingly, we reserve the right to make changes -- which will be applied uniformly to all Contract Owners after advance written notice -- that we deem necessary to insure that the Contract will qualify as life insurance.

Pre-Death Distributions. The tax treatment of any distribution you receive before the insured's death depends on whether the Contract is classified as a Modified Endowment Contract.

Contracts Not Classified as Modified Endowment Contracts

·   If you surrender the Contract or allow it to lapse, you will be taxed on the amount you receive in excess of the premiums you paid less the untaxed portion of any prior withdrawals.  For this purpose, you will be treated as receiving any portion of the Cash Surrender Value used to repay Contract Debt. In other words, you will immediately have taxable income to the extent of gain in the Contract. Reinstatement of the Contract after lapse will not eliminate the taxable income, which we are required to report to the Internal Revenue Service.  The tax consequences of a surrender may differ if you take the proceeds under an income payment settlement option.

·   Generally, you will be taxed on a withdrawal to the extent the amount you receive exceeds the premiums you paid for the Contract less the untaxed portion of any prior withdrawals. However, under some limited circumstances, in the first 15 Contract Years, all or a portion of a withdrawal may be taxed if the Contract Fund exceeds the total premiums paid less the untaxed portions of any prior withdrawals, even if total withdrawals do not exceed total premiums paid.

·   Extra premiums for optional benefits and riders generally do not count in computing the premiums paid for the Contract for the purposes of determining whether a withdrawal is taxable.

·   Loans you take against the Contract are ordinarily treated as debt and are not considered distributions subject to tax.

Modified Endowment Contracts

·   The rules change if the Contract is classified as a Modified Endowment Contract. The Contract could be classified as a Modified Endowment Contract if premiums substantially in excess of Scheduled Premiums are paid or a decrease in the Face Amount of insurance is made (or a rider removed).  The addition of a rider or an increase in the Face Amount of insurance may also cause the Contract to be classified as a Modified Endowment Contract if a significant premium is paid in conjunction with an increase or the addition of a rider.     We will notify you if a premium or a change in the Face Amount would cause the Contract to become a Modified Endowment Contract, and advise you of your options.  You should first consult a tax adviser and your Prudential representative if you are contemplating any of these steps.

·   If the Contract is classified as a Modified Endowment Contract, then amounts you receive under the Contract before the insured's death, including loans and withdrawals, are included in income to the extent that the Contract Fund before surrender charges exceeds the premiums paid for the Contract increased by the amount of any loans previously included in income and reduced by any untaxed amounts previously received other than the amount of any loans excludible from income.  An assignment of a Modified Endowment Contract is taxable in the same way.  These rules also apply to pre-death distributions, including loans and assignments, made during the two-year period before the time that the Contract became a Modified Endowment Contract.

·   Any taxable income on pre-death distributions (including full surrenders) is subject to a penalty of 10 percent unless the amount is received on or after age 59½, on account of your becoming disabled or as a life annuity.  It is presently unclear how the penalty tax provisions apply to Contracts owned by businesses.

·   All Modified Endowment Contracts issued by us to you during the same calendar year are treated as a single Contract for purposes of applying these rules.

31

Investor Control. Treasury Department regulations do not provide specific guidance concerning the extent to which you may direct your investment in the particular Variable Investment Options without causing you, instead of Prudential, to be considered the owner of the underlying assets.  Because of this uncertainty, we reserve the right to make such changes as we deem necessary to assure that the Contract qualifies as life insurance for tax purposes. Any such changes will apply uniformly to affected Contract Owners and will be made with such notice to affected Contract Owners as is feasible under the circumstances.

Withholding.  You must affirmatively elect that no taxes be withheld from a pre-death distribution.  Otherwise, the taxable portion of any amounts you receive will be subject to withholding.  You are not permitted to elect out of withholding if you do not provide a social security number or other taxpayer identification number.  You may be subject to penalties under the estimated tax payment rules if your withholding and estimated tax payments are insufficient to cover the tax due.

Other Tax Considerations.  If you transfer or assign the Contract to someone else, there may be gift, estate and/or income tax consequences.  If you transfer the Contract to a person two or more generations younger than you (or designate such a younger person as a beneficiary), there may be Generation Skipping Transfer tax consequences. Deductions for interest paid or accrued on Contract Debt or on other loans that are incurred or continued to purchase or carry the Contract may be denied.  Your individual situation or that of your beneficiary will determine the federal estate taxes and the state and local estate, inheritance and other taxes due if you or the insured dies.

Business-Owned Life Insurance.  If a business, rather than an individual, is the owner of the Contract, there are some additional rules.  Business Contract Owners generally cannot deduct premium payments.  Business Contract Owners generally cannot take tax deductions for interest on Contract Debt paid or accrued after October 13, 1995.  An exception permits the deduction of interest on policy loans on Contracts for up to 20 key persons.  The interest deduction for Contract Debt on these loans is limited to a prescribed interest rate and a maximum aggregate loan amount of $50,000 per key insured person.  The corporate alternative minimum tax also applies to business-owned life insurance.  This is an indirect tax on additions to the Contract Fund or Death Benefits received under business-owned life insurance policies.

For business-owned life insurance coverage issued after August 17, 2006, Death Benefits will generally be taxable as ordinary income to the extent it exceeds cost basis.  Life insurance Death Benefits will continue to be generally income tax free if, prior to policy issuance, the employer provided a prescribed notice to the proposed insured/employee, obtained the employee's consent to the life insurance, and one of the following requirements is met: (a) the insured was an employee at any time during the 12-month period prior to his or her death; (b) the insured was a director or highly compensated employee or individual (as defined in the Code) at the time the policy was issued; or (c) the Death Benefits are paid to the insured's heirs or his or her designated beneficiaries (other than the employer), either directly as a Death Benefit or received from the purchase of an equity (or capital or profits) interest in the applicable policyholder.  Annual reporting and record keeping requirements will apply to employers maintaining such business-owned life insurance.

Tax-Qualified Pension Plans

You may have acquired the Contract to fund a pension plan that qualifies for tax favored treatment under the Internal Revenue Code.  We issued such Contracts with a minimum Face Amount of $10,000, and with increases and decreases in the Face Amount in minimum increments of $10,000.  The monthly charge for anticipated mortality costs and the Scheduled Premiums is the same for male and female insureds of a particular age and underwriting classification, as required for insurance and annuity Contracts sold to tax-qualified pension plans.  We provided you with illustrations showing premiums and charges if you wished to fund a tax-qualified pension plan.  Only certain riders are available for a Contract issued in connection with a tax-qualified pension plan.  Fixed reduced paid up insurance, variable reduced paid-up insurance, and payment of the Cash Surrender Value are the only options on lapse available for Contracts issued in connection with a tax-qualified pension plan.  See LAPSE AND REINSTATEMENT.  Finally, a Contract issued in connection with a tax-qualified pension plan may not invest in the Real Property Account.

You should consult a qualified tax advisor before purchasing a Contract in connection with a tax-qualified pension plan to confirm, among other things, the suitability of the Contract for your particular plan.

DISTRIBUTION AND COMPENSATION

Pruco Securities, LLC (“Prusec”), an indirect wholly-owned subsidiary of Prudential Financial, acts as the principal underwriter of the Contract.  Prusec, organized on September 22, 2003 under New Jersey law, is registered as a broker and dealer under the Securities Exchange Act of 1934 and is a registered member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). (Prusec is a successor company to Pruco Securities Corporation, established on February 22, 1971.)  Prusec’s principal business address is 751 Broad Street, Newark, New Jersey 07102.  Prusec serves as principal underwriter of the individual variable insurance Contracts issued by Prudential.  The Contract was sold by

32

registered representatives of Prusec who are also our appointed insurance agents under state insurance law.  The Contract may have also been sold through other broker-dealers authorized by Prusec and applicable law to do so.   Prusec received gross distribution revenue for its variable life insurance products of $67,749,409 in 2009, $96,759,988 in 2008, and $106,977,800 in 2007 .  Prusec passes through the gross distribution revenue it receives to broker-dealers for their sales and does not retain any portion of it in return for its services as distributor for the Contracts.  However, Prusec does retain a portion of compensation it receives with respect to sales by its representatives.   Prusec retained compensation of $8,360,812 in 2009, $15,852,244 in 2008, and $16,112,532 in 2007.  Prusec offers the Contract on a continuous basis.

On July 1, 2003, Prudential Financial combined its retail securities brokerage and clearing operations with those of Wachovia Corporation (“Wachovia”) and formed Wachovia Securities Financial Holdings, LLC (“Wachovia Securities”), a joint venture headquartered in Richmond, Virginia.

Wachovia and Wells Fargo & Company (“Wells Fargo”) announced that they entered into an Agreement and Plan of Merger, pursuant to which Wachovia would be merged into Wells Fargo, which would succeed to Wachovia’s rights and obligations under the joint venture arrangement with Prudential Financial.  As reported by Wells Fargo, this merger was completed on December 31, 2008.

On December 31, 2009, Prudential Financial sold its minority ownership interest in the joint venture to Wells Fargo.  Prudential Financial was a service provider to the managed account platform and certain wrap-fee programs offered by Wachovia Securities and will continue to provide those services to Wells Fargo Financial Advisors, LLC, an affiliate of Wells Fargo.

Compensation (commissions, overrides, and any expense reimbursement allowance) is paid to broker-dealers that are registered under the Exchange Act and/or entities that are exempt from such registration (“firms”) according to one or more schedules.  The individual representative will receive all or a portion of the compensation, depending on the practice of the firm.   Compensation is based on the scheduled premium.   The scheduled Premium will vary by Issue Age, sex, smoker/non smoker, substandard rating class, and any riders selected by the Contract Owner.

Broker-dealers will receive compensation of up to 105% of premiums received in the first 12 months following the Contract Date on total premiums received since issue up to the first Scheduled Premium, and up to 8% on premiums received up to the next nine Scheduled Premiums.  Moreover, broker-dealers will receive compensation of up to 6% on premiums received to the extent that premiums exceed the first 10 Scheduled Premiums in years two through five, up to 4.5% on premiums received in years six through 10, and up to 3% beyond 10 years.

If the Face Amount is increased, broker-dealers will receive compensation of up to 105% on premiums received up to the first Scheduled Premium for the increase received in the first 12 months following the effective date of the increase and up to 8% of premiums received up to the next nine Scheduled Premiums for the increase.  Moreover, broker-dealers will receive compensation of up to 6% on premiums received following the effective date of the increase to the extent that premiums exceed the first 10 Scheduled Premiums in years two through five, up to 4.5% on premiums received in years six through 10, and up to 3% beyond 10 years.

Prusec registered representatives who sell the Contract are also our life insurance agents, and may be eligible for various cash bonuses and insurance benefits and non-cash compensation programs that we or our affiliates offer such as conferences, trips, prizes and awards, subject to applicable regulatory requirements.  In some circumstances and to the extent permitted by applicable regulatory requirements, we may also reimburse certain sales and marketing expenses.

In addition, in an effort to promote the sale of our variable products (which may include the placement of our Contracts on a preferred or recommended company or product list and/or access to a broker-dealer’s registered representatives), we or Prusec may enter into compensation arrangements with certain broker-dealer firms authorized by Prusec to sell the Contract, or branches of such firms, with respect to certain or all registered representatives of such firms under which such firms may receive separate compensation or reimbursement for, among other things, training of sales personnel, marketing and/or administrative and/or other services they provide to us or our affiliates.

To the extent permitted by applicable rules, laws, and regulations, Prusec may pay or allow other promotional incentives or payments in the form of cash or non-cash compensation.  These arrangements may not be offered to all firms, and the terms of such arrangements may differ between firms.  You should note that firms and individual registered representatives and branch managers within some firms participating in one of these compensation arrangements might receive greater compensation for selling the Contract than for selling a different Contract that is not eligible for these compensation arrangements.

A list of the names of the firms (or their affiliated broker/dealers) that we are aware of (as of December 31, 2009) that received payment or accrued a payment amount with respect to variable product business during 2009 may be found in

33

the Statement of Additional Information.  The least amount paid or accrued and the greatest amount paid or accrued during 2009 were $3 and $3,913,733, respectively.

While compensation is generally taken into account as an expense in considering the charges applicable to a variable life insurance product, any such compensation will be paid by us, and will not result in any additional charge to you or to the Separate Account.  Your registered representative can provide you with more information about the compensation arrangements that apply upon the sale of the Contract.

In addition, we or our affiliates may provide such compensation, payments and/or incentives to firms arising out of the marketing, sale and/or servicing of variable annuities or life insurance offered by different Prudential business units.

LEGAL PROCEEDINGS

Prudential is subject to legal and regulatory actions in the ordinary course of its businesses, including class action lawsuits. Prudential’s pending legal and regulatory actions include proceedings specific to it and proceedings generally applicable to business practices in the industries in which it operates, including in both cases businesses that have either been divested or placed in wind-down status. Prudential is subject to class action lawsuits and individual lawsuits involving a variety of issues, including sales practices, underwriting practices, claims payment and procedures, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, return of premiums or excessive premium charges and breaching fiduciary duties to customers. In its investment-related operations, Prudential is subject to litigation involving commercial disputes with counterparties or partners and class action lawsuits and other litigation alleging, among other things, that Prudential made improper or inadequate disclosures in connection with the sale of assets and annuity and investment products or charged excessive or impermissible fees on these products, recommended unsuitable products to customers, mishandled customer accounts or breached fiduciary duties to customers. Prudential is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment and could be exposed to claims or litigation concerning certain business or process patents. Regulatory authorities from time to time make inquiries and conduct investigations and examinations relating particularly to Prudential and its businesses and products. In addition, Prudential, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of Prudential’s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages. The outcome of a litigation or regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.  The following is a summary of certain pending proceedings.

In June 2009, special bankruptcy counsel for Lehman Brothers Holdings Inc. (“LBHI”), Lehman Brothers Special Financing ("LBSF") and certain of their affiliates made a demand of Prudential Global Funding LLC ("PGF"), a subsidiary of Prudential, for the return of a portion of the $550 million in collateral delivered by LBSF to PGF pursuant to swap agreements and a cross margining and netting agreement between PGF, LBSF and Lehman Brothers Finance S.A. a/k/a Lehman Brothers Finance AG ("Lehman Switzerland"), a Swiss affiliate that is subject to insolvency proceedings in the United States and Switzerland. LBSF claims that PGF wrongfully applied the collateral to Lehman Switzerland’s obligations in violation of the automatic stay in LBSF’s bankruptcy case, which is jointly administered under In re Lehman Brothers Holdings Inc. in the United States Bankruptcy Court in the Southern District of New York (the “Lehman Chapter 11 Cases”).  In August 2009, PGF filed a declaratory judgment action in the same court against LBSF, Lehman Switzerland and LBHI (as guarantor of LBSF and Lehman Switzerland under the swap agreements) seeking an order that (a) PGF had an effective lien on the collateral that secured the obligations of both LBSF ($197 million) and Lehman Switzerland ($488 million) and properly foreclosed on the collateral leaving PGF with an unsecured $135 million claim against LBSF (and LBHI as guarantor) or, in the alternative, (b) PGF was entitled, under the Bankruptcy Code, to set off amounts owed by Lehman Switzerland against the collateral and the automatic stay was inapplicable.  The declaratory judgment action is captioned Prudential Global Funding LLC v. Lehman Brothers Holdings Inc., et al.  In addition, PGF filed timely claims against LBSF and LBHI in the Lehman Chapter 11 Cases for any amounts due under the swap agreements, depending on the results of the declaratory judgment action.  In October 2009, LBSF and LBHI answered in the declaratory judgment action and asserted counterclaims that PGF breached the swap agreement, seeking a declaratory judgment that PGF had a perfected lien on only $178 million of the collateral that could be applied only to amounts owed by LBSF and no right of set off against Lehman Switzerland's obligations, as well as the return of collateral in the amount of $372 million plus interest and the disallowance of PGF's claims against LBSF and LBHI.  LBSF and LBHI also asserted cross-claims against Lehman Switzerland seeking return of the collateral.  In December 2009, PGF filed a motion for judgment on the pleadings to resolve the matter in its favor.  In February 2010, LBSF and LBHI cross-moved for judgment on the pleadings.

In April 2009, a purported nationwide class action, Schultz v. The Prudential Insurance Company of America, was filed in the United States District Court for the Northern District of Illinois.  In January 2010, the court dismissed the complaint without prejudice.  In February 2010, plaintiff sought leave to amend the complaint to add another plaintiff and to name

34

the ERISA welfare plans in which they were participants individually and as representatives of a purported defendant class of ERISA welfare plans for which Prudential offset benefits.  The proposed amended complaint alleges that Prudential and the welfare plans violated ERISA by offsetting family Social Security benefits against Prudential contract benefits and seeks a declaratory judgment that the offsets are unlawful as they are not “loss of time” benefits and recovery of the amounts by which the challenged offsets reduced the disability payments.

In November 2008, a purported nationwide class action, Garcia v. Prudential Insurance Company of America, was filed in the United States District Court for the District of New Jersey. The complaint, which is brought on behalf of beneficiaries of Prudential policies whose death benefits were placed in retained asset accounts, alleges that by investing the death benefits in these accounts, Prudential wrongfully delayed payment and improperly retained undisclosed profits. It alleges claims of breach of the contract of insurance, breach of contract with regard to the retained asset accounts, breach of fiduciary duty and unjust enrichment, and seeks an accounting, disgorgement, injunctive relief, attorneys’ fees and prejudgment and post-judgment interest. In March 2009, Prudential filed a motion to dismiss the complaint.  In December 2009, the case was dismissed.  The time to appeal has expired.

From November 2002 to March 2005, eleven separate complaints were filed against Prudential Financial, Inc. (“PFI”), Prudential and the law firm of Leeds Morelli & Brown in New Jersey state court. The cases were consolidated for pre-trial proceedings in New Jersey Superior Court, Essex County and captioned Lederman v. Prudential Financial Inc., et al. The complaints allege that an alternative dispute resolution agreement entered into among Prudential, over 350 claimants who are current and former employees, and Leeds Morelli & Brown (the law firm representing the claimants) was illegal and that Prudential conspired with Leeds Morelli & Brown to commit fraud, malpractice, breach of contract, and violate racketeering laws by advancing legal fees to the law firm with the purpose of limiting Prudential’s liability to the claimants. In 2004, the Superior Court sealed these lawsuits and compelled them to arbitration. In May 2006, the Appellate Division reversed the trial court’s decisions, held that the cases were improperly sealed, and should be heard in court rather than arbitrated. In March 2007, the court granted plaintiffs’ motion to amend the complaint to add over 200 additional plaintiffs and a claim under the New Jersey discrimination law but denied without prejudice plaintiffs’ motion for a joint trial on liability issues.  In June 2007, PFI and Prudential moved to dismiss the complaint.  In November 2007, the court granted the motion, in part, and dismissed the commercial bribery and conspiracy to commit malpractice claims, and denied the motion with respect to other claims.  In January 2008, plaintiffs filed a demand pursuant to New Jersey law stating that they were seeking damages in the amount of $6.5 billion.  In February 2010, the New Jersey Supreme Court assigned the cases for centralized case management to the Superior Court, Bergen County.

Prudential, along with a number of other insurance companies, received formal requests for information from the State of New York Attorney General’s Office (“NYAG”), the Securities and Exchange Commission (“SEC”), the Connecticut Attorney General’s Office, the Massachusetts Office of the Attorney General, the Department of Labor, the United States Attorney for the Southern District of California, the District Attorney of the County of San Diego, and various state insurance departments relating to payments to insurance intermediaries and certain other practices that may be viewed as anti-competitive.  In December 2006, Prudential reached a resolution of the NYAG investigation. Under the terms of the settlement, Prudential paid a $2.5 million penalty and established a $16.5 million fund for policyholders, adopted business reforms and agreed, among other things, to continue to cooperate with the NYAG in any litigation, ongoing investigations or other proceedings. Prudential also settled the litigation brought by the California Department of Insurance and agreed to business reforms and disclosures as to group insurance contracts insuring customers or residents in California and to pay certain costs of investigation. In April 2008, Prudential reached a settlement of proceedings relating to payments to insurance intermediaries and certain other practices with the District Attorneys of San Diego, Los Angeles and Alameda counties.  Pursuant to this settlement, Prudential paid $350,000 in penalties and costs.  These matters are also the subject of litigation brought by private plaintiffs, including purported class actions that have been consolidated in the multidistrict litigation in the United States District Court for the District of New Jersey, In re Employee Benefit Insurance Brokerage Antitrust Litigation. In August and September 2007, the court dismissed the anti-trust and RICO claims.  In January and February 2008, the court dismissed the ERISA claims with prejudice and the state law claims without prejudice.  Plaintiffs have appealed the dismissal of the antitrust and RICO claims to the United States Court of Appeals for the Third Circuit.

In October 2006, a class action lawsuit, Bouder v. Prudential Financial, Inc. and Prudential Insurance Company of America, was filed in the United States District Court for the District of New Jersey, claiming that Prudential failed to pay overtime to insurance agents who were registered representatives in violation of federal and Pennsylvania law, and that improper deductions were made from these agents’ wages in violation of state law.  The complaint seeks back overtime pay and statutory damages, recovery of improper deductions, interest and attorneys’ fees.  In December 2007, plaintiffs moved to certify the class.  In March 2008, a purported nationwide class action lawsuit was filed with the United States District Court for the Southern District of California, Wang v. Prudential Financial, Inc. and Prudential, on behalf of agents who sold Prudential’s financial products.  The complaint alleges claims that Prudential failed to pay overtime and provide other benefits in violation of California and federal law and seeks compensatory and punitive damages in unspecified amounts.  In September 2008, the Wang matter was transferred to the United States District Court for the

35

District of New Jersey and consolidated with the Bouder matter. In January 2009, an amended complaint was filed in the consolidated matter which adds wages claims based on the laws of thirteen additional states.  In March 2009, a second amended complaint was filed which dropped the breach of contract claims.  In December 2009, certain of the state claims were dismissed. In February 2010, Prudential moved to decertify the federal wage and hour class conditionally certified in March 2008, and moved for summary judgment as to the federal wage and hour claims of the named plaintiffs.

In October 2007, Prudential Retirement Insurance and Annuity Co. (“PRIAC”) filed an action in the United States District Court for the Southern District of New York, Prudential Retirement Insurance & Annuity Co. v. State Street Global Advisors, in PRIAC’s fiduciary capacity and on behalf of certain defined benefit and defined contribution plan clients of PRIAC, against an unaffiliated asset manager, State Street Global Advisors (“SSgA”) and SSgA’s affiliate, State Street Bank and Trust Company (“State Street”).  This action seeks, among other relief, restitution of certain losses attributable to certain investment funds sold by SSgA as to which PRIAC believes SSgA employed investment strategies and practices that were misrepresented by SSgA and failed to exercise the standard of care of a prudent investment manager.  PRIAC also intends to vigorously pursue any other available remedies against SSgA and State Street in respect of this matter.  Given the unusual circumstances surrounding the management of these SSgA funds and in order to protect the interests of the affected plans and their participants while PRIAC pursues these remedies, PRIAC implemented a process under which affected plan clients that authorized PRIAC to proceed on their behalf have received payments from funds provided by PRIAC for the losses referred to above.  Prudential’s consolidated financial statements, and the results of the Retirement segment included in Prudential’s U.S. Retirement Solutions and Investment Management Division, for the year ended December 31, 2007 include a pre-tax charge of $82 million, reflecting these payments to plan clients and certain related costs.  In September 2008, the United States District Court for the Southern District of New York denied the State Street defendants’ motion to dismiss claims for damages and other relief under Section 502(a)(2) of ERISA, but dismissed the claims for equitable relief under Section 502(a)(3) of ERISA.  In October 2008, defendants answered the complaint and asserted counterclaims for contribution and indemnification, defamation and violations of Massachusetts’ unfair and deceptive trade practices law.  In February 2010, State Street reached a settlement with the SEC over charges that it misled investors about their exposure to subprime investments, resulting in significant investor losses in mid-2007.  Under the settlement, State Street will pay approximately $313 million in disgorgement, pre-judgment interest, penalty and compensation into a Fair Fund that will be distributed to injured investors.  Consequently, State Street will pay PRIAC, for deposit into its separate accounts, approximately $52.5 million within 14 days of the entry of a final judgment by the United States District Court for the District of Massachusetts.   By the terms of the settlement, State Street’s payment to PRIAC does not resolve any claims PRIAC has against State Street or SSgA in connection with the losses in the investment funds SSgA managed, and the penalty component of State Street’s SEC settlement cannot be used to offset or reduce compensatory damages in the action against State Street and SSgA.

In April 2009, PFI’s Board of Directors (the "Board") received a letter demanding that the Board take action to recover allegedly improperly paid compensation to certain current and former employees and executive officers of Prudential since at least 2005.  The demand is made by a PFI stockholder, Service Employees International Union Pension Plans Master Trust (“SEIU”), and is one of many that SEIU has sent to large corporations.  SEIU claims that Prudential must bring an action, under theories of unjust enrichment and corporate waste, to recoup incentive compensation that was based on allegedly flawed economic metrics.  SEIU also seeks rescission of exercised stock options because the options were based on mistaken facts concerning the fair value of Prudential’s stock.  The letter states that between 2005 and 2008 Prudential paid cash and equity compensation of approximately $165 million to its senior executives and authorized senior executives to exercise stock options worth approximately $66 million.  The letter also demands that the Board enjoin any further approved, but unpaid, compensation payments, overhaul Prudential’s compensation structure, and allow stockholders an advisory vote on the Compensation Committee’s report in Prudential’s annual proxy statement. SEUI reserves the right to bring a derivative action should the Board decline to act. In May 2009, the Board formed a Special Evaluation Committee (the “Committee”), comprised of independent directors, and authorized the Committee to hire outside advisors and experts to assist in its evaluation of the demand letter.  The Committee has engaged counsel that is reviewing the matter.

Prudential’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcomes cannot be predicted.  It is possible that Prudential’s results of operations or cash flow in a particular quarterly or annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of Prudential’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on Prudential’s financial position.  Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification is not likely to have a material adverse effect on Prudential’s financial position.

36

ADDITIONAL INFORMATION

Prudential has filed a registration statement with the SEC under the Securities Act of 1933, relating to the offering described in this prospectus.  This prospectus does not include all the information set forth in the registration statement.  Certain portions have been omitted pursuant to the rules and regulations of the SEC.  The omitted information may, however, be obtained from the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549, or by telephoning (202) 551- 8090 , upon payment of a prescribed fee.

To reduce costs, we now generally send only a single copy of prospectuses and shareholder reports to each household ("householding"), in lieu of sending a copy to each Contract Owner that resides in the household.  You should be aware that you can revoke or "opt out" of householding at any time by calling 1-877-778-5008.

You may contact us directly for further information.  Our address and telephone number are on the inside front cover of this prospectus.

37

DEFINITIONS OF SPECIAL TERMS

USED IN THIS PROSPECTUS

Attained Age - The insured’s age on the Contract Date plus the number of Contract Years since then.

Cash Surrender Value - The amount payable to the Contract Owner upon surrender of the Contract.  It is equal to the Contract Fund minus any Contract Debt and minus any applicable surrender charges.

Contract - The individual variable life insurance Contract described in this prospectus.

Contract Anniversary - The same date as the Contract Date in each later year.

Contract Date - The date the Contract is issued, as specified in the Contract.

Contract Debt - The principal amount of all outstanding loans plus any interest accrued thereon.

Contract Fund - The total amount at any time credited to the Contract.  On any date, it is equal to the sum of the amounts in all Variable Investment Options, the Real Property Account, the Fixed Rate Option, and the principal amount of any Contract Debt plus any interest earned thereon.

Contract Owner - You.  Unless a different owner is named in the application, the owner of the Contract is the insured.

Contract Year - A year that starts on the Contract Date or on a Contract Anniversary.

Death Benefit - The amount payable upon the death of the insured before the deduction of any outstanding Contract Debt.

Face Amount - The amount[s] of life insurance as shown in the Contract's schedule of Face Amounts, including any applicable increases.

Fixed Rate Option - An investment option under which interest is accrued daily at a rate that we declare periodically, but not less than an effective annual rate of 4%.

Good Order - An instruction received at our Service Office utilizing such forms, signatures, and dating as we require, which is sufficiently clear and complete and for which we do not need to exercise any discretion to follow such instructions.

Issue Age - The insured's age as of the Contract Date.

Monthly Date - The Contract Date and the same date in each subsequent month.

The Prudential Insurance Company of America - Prudential, us, we, our.  The company offering the Contract.

The Prudential Variable Contract Real Property Account - A separate account (the "Real Property Account") that consists of a portfolio of commercial and residential real properties.

Portfolio/Variable Investment Option - These are terms that may be used interchangeably and represent the underlying investments held in the Separate Account which you may select for your Contract.

Scheduled Premiums - Your Contract sets forth a Scheduled Premium which is payable annually, semi-annually, quarterly or monthly. If you make this payment on time, it may prevent your policy from lapsing due to unfavorable investment experience.

Separate Account - Amounts under the Contract that are allocated to the Fund held by us in a Separate Account called the Prudential Variable Appreciable Account (the "Account" or the "Registrant ").  The Separate Account is set apart from all of the general assets of The Prudential Insurance Company of America.

Subaccount - An investment division of the Account, the assets of which are invested in the shares of the corresponding Portfolio of the Series Fund.

Valuation Period - The period of time from one determination of the value of the amount invested in a Variable Investment Option to the next.  Such determinations are made when the net asset values of the Portfolios of the Series Fund are calculated, which would be as of the close of regular trading on the New York Stock Exchange (generally 4:00 p.m. Eastern time.)

38

To Learn More About Prudential’s Variable Appreciable Life®

To learn more about The Prudential Variable Appreciable Life® Contract, you can request a copy of the Statement of Additional Information (“SAI”), dated May 1, 2010 , or view it online at www.prudential.com.  See the Table of Contents of the SAI below.

TABLE OF CONTENTS OF THE

STATEMENT OF ADDITIONAL INFORMATION

GENERAL INFORMATION AND HISTORY	1
Description of The Prudential Insurance Company of America	1
Control of The Prudential Insurance Company of America	1
State Regulation	1
Records	1
Services and Third Party Administration Agreements	1
INITIAL PREMIUM PROCESSING	2
ADDITIONAL INFORMATION ABOUT OPERATION OF CONTRACTS	3
Legal Considerations Relating to Sex-Distinct Premiums and Benefits	3
Sales to Persons 14 Years of Age or Younger	3
How a Form A (Level) Contract's Death Benefit Will Vary	3
How a Form B (Variable) Contract's Death Benefit Will Vary	4
Paying Premiums by Payroll Deduction	4
Reports to Contract Owners	4
UNDERWRITING PROCEDURES	5
ADDITIONAL INFORMATION ABOUT CHARGES	5
Reduction of Charges for Concurrent Sales to Several Individuals	5
ADDITIONAL INFORMATION ABOUT CONTRACTS IN DEFAULT	5
DISTRIBUTION AND COMPENSATION	5
EXPERTS	7
PERFORMANCE DATA	7
Average Annual Total Return	7
Non-Standard Total Return	7
Money Market Subaccount Yield	8
FINANCIAL STATEMENTS	8

39

The SAI is legally a part of this prospectus, both of which are filed with the Securities and Exchange Commission (“SEC”) under the Securities Act of 1933, Registration No. 33-20000.   The SAI contains additional information about the Prudential Variable Appreciable Account.   All of these filings can be reviewed and copied at the SEC’s Public Reference Room in Washington, D.C.  Information on the operation of the public reference room may be obtained by calling the Commission at (202) 551- 8090 .  The SEC also maintains a Web site (http://www.sec.gov) that contains the The Prudential Variable Appreciable Life® SAI, material incorporated by reference, and other information about Prudential.  Copies of these materials can also be obtained, upon payment of duplicating fees, from the SEC’s Public Reference Room, 100 F Street, N.E., Washington, D.C. 20549.

You can call us at 1-800-778-2255 to ask us questions, request information about the Contract, and obtain copies of the Statement of Additional Information, personalized illustrations, without charge , or other documents.  You can also view the Statement of Additional Information located with the prospectus at www.prudential.com, or request a copy by writing to us at:

The Prudential Insurance Company of America

751 Broad Street

Newark, New Jersey 07102

Investment Company Act of 1940, Registration No. 811-5466.

40

PART B:

INFORMATION REQUIRED IN THE STATEMENT OF ADDITIONAL INFORMATION

STATEMENT OF ADDITIONAL INFORMATION

The Prudential’s Variable Appreciable Life Insurance

The Prudential Insurance Company of America

Variable Appreciable Life ®

Insurance Contracts

This Statement of Additional Information is not a prospectus.  Please review the Variable Appreciable Life® prospectus (the “prospectus”), which contains information concerning the Contracts described above.  You may obtain a copy of the prospectus without charge by calling us at 1-800-778-2255.  You can also view the Statement of Additional Information located with the prospectus at www.prudential.com, or request a copy by writing to us.

The defined terms used in this Statement of Additional Information are as defined in the prospectus.

The Prudential Insurance Company of America

751 Broad Street

Newark, New Jersey 07102

The Date of this Statement of Additional Information and of the related prospectus is May 1, 2010 .

TABLE OF CONTENTS

Page
GENERAL INFORMATION AND HISTORY	1
Description of The Prudential Insurance Company of America	1
Control of The Prudential Insurance Company of America	1
State Regulation	1
Records	1
Services and Third Party Administration Agreements	1
INITIAL PREMIUM PROCESSING	2
ADDITIONAL INFORMATION ABOUT OPERATION OF CONTRACTS	3
Legal Considerations Relating to Sex-Distinct Premiums and Benefits	3
Sales to Persons 14 Years of Age or Younger	3
How a Form A (Level) Contract's Death Benefit Will Vary	3
How a Form B (Variable) Contract's Death Benefit Will Vary	4
Paying Premiums by Payroll Deduction	4
Reports to Contract Owners	4
UNDERWRITING PROCEDURES	5
ADDITIONAL INFORMATION ABOUT CHARGES	5
Reduction of Charges for Concurrent Sales to Several Individuals	5
ADDITIONAL INFORMATION ABOUT CONTRACTS IN DEFAULT	5
DISTRIBUTION AND COMPENSATION	5
EXPERTS	7
PERFORMANCE DATA	7
Average Annual Total Return	7
Non-Standard Total Return	7
Money Market Subaccount Yield	8
FINANCIAL STATEMENTS	8

GENERAL INFORMATION AND HISTORY

Description of The Prudential Insurance Company of America

The Prudential Insurance Company of America (“Prudential”, “us”, “we”, or “our”) is a New Jersey stock life insurance company that has been doing business since October 13, 1875.  Prudential is licensed to sell life insurance and annuities in the District of Columbia, Guam, U. S. Virgin Islands, and in all states.

Control of The Prudential Insurance Company of America

Prudential is an indirect wholly-owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”), a New Jersey insurance holding company.  Prudential Financial exercises significant influence over the operations and capital structure of Prudential.  However, neither Prudential Financial nor any other related company has any legal responsibility to pay amounts that Prudential may owe under the Contract.  The principal Executive Office each of Prudential and Prudential Financial is Prudential Plaza, 751 Broad Street, Newark, New Jersey 07102.

State Regulation

Prudential is subject to regulation and supervision by the Department of Insurance of the State of New Jersey, which periodically examines its operations and financial condition.  It is also subject to the insurance laws and regulations of all jurisdictions in which it is authorized to do business.

Prudential is required to submit annual statements of its operations, including financial statements, to the insurance departments of the various jurisdictions in which it does business to determine solvency and compliance with local insurance laws and regulations.

In addition to the annual statements referred to above, Prudential is required to file with New Jersey and other jurisdictions, a separate statement with respect to the operations of all of its variable contract accounts, in a form promulgated by the National Association of Insurance Commissioners.

Records

We maintain all records and accounts relating to the Account at our principal Executive Office.  As presently required by the Investment Company Act of 1940, as amended, and regulations promulgated thereunder, reports containing such information as may be required under the Act or by any other applicable law or regulation will be sent to you semi-annually at your last address known to us.

Services and Third Party Administration Agreements

Prudential, Pruco Life, and Pruco Life of New Jersey have entered into an agreement under which Prudential furnishes Pruco Life and Pruco Life of New Jersey the same administrative support services that it provides in the operation of its own business with regard to the payment of death claim proceeds by way of Prudential’s Alliance Account, Prudential’s retained asset settlement option.  Pruco Life and Pruco Life of New Jersey transfer to Prudential an amount equal to the amount of the death claim, and Prudential establishes a retained asset settlement option for the beneficiary within its General Account and makes all payments necessary to satisfy such obligations.  As soon as the Pruco Life or Pruco Life of New Jersey death claim is processed, the beneficiaries are furnished with an information kit that describes the settlement option and a check book on which they may write checks.  Pruco Life and Pruco Life of New Jersey pay no fees or other compensation to Prudential under this agreement.

Open Solutions, Inc. is the Service Provider of the Prudential Alliance Account Settlement Option, a contractual obligation of The Prudential Insurance Company of America, located at 751 Broad Street, Newark, NJ 07102.  Check clearing is provided by JPMorgan Chase Bank, N.A. and processing support is provided by First Data Payment Services ("FDPS").  Alliance Account balances are not insured by the Federal Deposit Insurance Corporation ("FDIC").  Open Solutions, Inc., JPMorgan Chase Bank, N.A., and First Data Payment Services are not Prudential Financial companies.

The Prudential Insurance Company of America (“Prudential”), Pruco Life Insurance Company (“Pruco Life”), a subsidiary of Prudential, and Pruco Life Insurance Company of New Jersey (“Pruco Life of New Jersey”), a subsidiary of Pruco Life, jointly entered into an administrative agreement with First Tennessee Bank National Association (“First

1

Express”), in which First Express provides remittance processing expertise and research and development capabilities providing Prudential, Pruco Life, and Pruco Life of New Jersey with the benefits of remittance processing, improved quality, increased productivity, decreased costs, and improved service levels.  Fees for such services vary monthly, depending on the number of remittances and processing methods used for varying types of remittance.   Under this Agreement, First Express received $2,790,008 in 2009, $3,014,514 in 2008, and $3,144,953 in 2007 from Prudential, Pruco Life, and Pruco Life of New Jersey for services rendered.   First Tennessee Bank National Association’s principal business address is 165 Madison Avenue, Memphis, Tennessee 38103.

During 2009, Prudential and First Express entered into a temporary arrangement with the Regulus Group ("Regulus") in which First Express transitioned the lockbox services performed for Prudential to Regulus.  The Regulus Group is a part of the 3i Infotech Group, North America, and is a provider of outsourced billing and payment services.  On December 2, 2009, Regulus began performing remittance processing services under the arrangement and received $223,178 in 2009 for services rendered.  Regulus Group's principal business address is 831 Latour Court, Suite B, Napa, California 94558.

INITIAL PREMIUM PROCESSING

In general, the invested portion of the minimum initial premium will be placed in the Contract Fund as of the later of the Contract Date and the date we receive the premium.

Upon receipt of a request for life insurance from a prospective Contract Owner, we will follow certain insurance underwriting (i.e. evaluation of risk) procedures designed to determine whether the proposed insured is insurable.  The process may involve such verification procedures as medical examinations and may require that further information be provided by the proposed insured before a determination can be made.  A Contract cannot be issued until this underwriting procedure has been completed.

These processing procedures are designed to provide temporary life insurance coverage to every prospective owner who pays the minimum initial premium at the time the request for coverage is submitted, subject to the terms of the Limited Insurance Agreement.  Since a Contract cannot be issued until after the underwriting process has been completed, we will provide temporary life insurance coverage through use of the Limited Insurance Agreement.  This coverage is for the total Death Benefit applied for, up to the maximum described by the Limited Insurance Agreement.

The Contract Date is the date we determine the proposed insured’s Issue Age.  It represents the first day of the Contract Year and the commencement of the suicide and contestable periods for purposes of the initial Face Amount of insurance.

If the minimum initial premium is received on or before the Contract is issued, the premium will be applied as of the Contract Date.  If an unusual delay is encountered in the underwriting procedure (for example, if a request for further information is not met promptly), the Contract Date will be 21 days prior to the date on which the Contract is physically issued.  If a medical examination is required, the Contract Date will ordinarily be the date the examination is completed, subject to the same qualification as that noted above.

If the initial premium paid is less than the minimum initial premium, the Contract Date will be determined as described above.  Upon receipt of the balance of the minimum initial premium, the total premiums received will be applied as of the date that the minimum initial premium was satisfied.

If the minimum initial premium is received after the Contract Date, it will be applied as of the date of receipt.

There is one principal variation from the foregoing procedure.  If permitted by the insurance laws of the state in which the Contract is issued, the Contract may be backdated up to six months.

In situations where the Contract Date precedes the date that the minimum initial premium is received, charges due prior to the initial premium receipt date will be deducted from the initial premium.

2

ADDITIONAL INFORMATION ABOUT

OPERATION OF CONTRACTS

Legal Considerations Relating to Sex-Distinct Premiums and Benefits

The Contract generally employs mortality tables that distinguish between males and females.  Thus, premiums and benefits differ under Contracts issued on males and females of the same age.  However, in those states that have adopted regulations prohibiting sex-distinct insurance rates, premiums and cost of insurance charges will be based on male rates, whether the insureds are male or female.  In addition, employers and employee organizations considering purchase of a Contract should consult their legal advisers to determine whether purchase of a Contract based on sex-distinct actuarial tables is consistent with Title VII of the Civil Rights Act of 1964 or other applicable law.

Sales to Persons 14 Years of Age or Younger

Both Form A and Form B Contracts covering insureds of 14 years of age or less contain a special provision providing that the Face Amount of insurance will automatically be increased on the Contract Anniversary after the insured's 21st birthday to 150% of the initial Face Amount, so long as the Contract is not then in default.  The Death Benefit will also usually increase, at the same time, by the same dollar amount.  In certain circumstances, however, it may increase by a smaller amount.  See How a Form A (Level) Contract's Death Benefit Will Vary, and How a Form B (Variable) Contract’s Death Benefit Will Vary, below.  This increase in Death Benefit will also generally increase the net amount at risk under the Contract, thus increasing the mortality charge deducted each month from amounts invested under the Contract.  The automatic increase in the Face Amount of insurance may affect the level of future premium payments you can make without causing the Contract to be classified as a Modified Endowment Contract.  A Contract Owner should consult with a Prudential representative before making unscheduled premium payments.

How a Form A (Level) Contract's Death Benefit Will Vary

There are two forms of the Contract, Form A and Form B.  The Death Benefit under a Form B Contract varies with investment performance while the Death Benefit under a Form A Contract does not, unless it must be increased to satisfy tax requirements.

Under a Form A Contract, the guaranteed minimum Death Benefit is equal to the Face Amount of insurance.  However, should the Death Benefit become payable while a Contract loan is outstanding, the debt will be deducted from the Death Benefit.  If the Contract is kept in-force for several years and if investment performance is reasonably favorable, the Contract Fund may grow to the point where we will increase the Death Benefit in order to ensure that the Contract will satisfy the Internal Revenue Code's definition of life insurance.  Thus, the Death Benefit under a Form A Contract will always be the greater of:

(1)   the guaranteed minimum Death Benefit; and

(2)   the Contract Fund divided by the “net single premium” per $1 of Death Benefit at the insured's Attained Age on that date.

The latter provision ensures that the Contract will always have a Death Benefit large enough so that the Contract will be treated as life insurance for tax purposes under current law.  The net single premium is used only in the calculation of the Death Benefit, not for premium payment purposes.  The following is a table of illustrative net single premiums for $1 of Death Benefit under Contracts issued on insureds in the preferred rating class.

Male Attained Age	Net Single Premium	Increase in Insurance Amount Per $1 Increase in Contract Fund	Female Attained Age	Net Single Premium	Increase in  Insurance Amount Per $1 Increase in  Contract Fund
5 25 35 55 65	.09151 .17000 .23700 .45209 .59468	$10.93 $  5.88 $  4.22 $  2.21 $  1.68	5 25 35 55 65	.07919 .15112 .21127 .40090 .53639	$12.63 $  6.62 $  4.73 $  2.49 $  1.86

3

Whenever the Death Benefit is determined in this way, Prudential reserves the right to limit unScheduled Premiums to a total of $10,000 in any Contract Year and to refuse to accept premium payments that would immediately result in more than a dollar-for-dollar increase in the Death Benefit.

How a Form B (Variable) Contract's Death Benefit Will Vary

Under a Form B Contract, the Death Benefit will vary with investment experience.  Assuming no withdrawals, the Death Benefit will be equal to the Face Amount of insurance plus the amount (if any) by which the Contract Fund value exceeds the applicable “Tabular Contract Fund Value” for the Contract (subject to an exception described below under which the Death Benefit is higher).  Each Contract contains a table that sets forth the Tabular Contract Fund Value as of the end of each of the first 20 years of the Contract.  The Tabular Contract Fund Value for each Contract Year is an amount that is slightly less than the Contract Fund value that would result as of the end of such year if:

(1)   you paid only Scheduled Premiums;

(2)   you paid Scheduled Premiums when due;

(3)   your selected investment options earned a net return at a uniform rate of 4% per year;

(4)   we deducted full mortality charges based upon the 1980 CSO Table;

(5)   we deducted maximum sales load and expense charges; and

(6)   there was no Contract Debt.

Thus, under a Form B Contract with no withdrawals, the Death Benefit will equal the Face Amount if the Contract Fund equals the Tabular Contract Fund Value.  If the Contract Fund value is a given amount greater than the Tabular Contract Fund Value, the Death Benefit will be the Face Amount plus that excess amount.  This may happen if:

(1)    investment results are greater than a 4% net return;

(2)    payments are made that are more than the Scheduled Premiums; or

(3)    smaller than maximum charges are assessed.

The Death Benefit under a Form B Contract will not fall below the initial Face Amount stated in the Contract if, due to investment results less favorable than a 4% net return, the Contract Fund value is less than the Tabular Contract Fund Value.  Any unfavorable investment experience must first be offset by favorable performance or additional payments that bring the Contract Fund up to the Tabular level before favorable investment results or additional payments will increase the Death Benefit.  Again, the Death Benefit will reflect a deduction for the amount of any Contract Debt.

As is the case under a Form A Contract, the Contract Fund of a Form B Contract could grow to the point where it is necessary to increase the Death Benefit in order to ensure that the Contract will satisfy the Internal Revenue Code's definition of life insurance.  Thus, the Death Benefit under a Form B Contract will always be the greater of:

(1)   the Face Amount plus the Contract Fund minus the Tabular Contract Fund Value;

(2)   the guaranteed minimum Death Benefit; and

(3)   the Contract Fund divided by the net single premium per $1 of Death Benefit at the insured's Attained Age on that date.

You may also increase or decrease the Face Amount of your Contract, subject to certain conditions.

Paying Premiums by Payroll Deduction

In addition to the annual, semi-annual, quarterly and monthly premium payment modes, a payroll budget method of paying premiums may also be available under certain Contracts.  The employer generally deducts the necessary amounts from employee paychecks and sends premium payments to Prudential monthly.  Some Contracts sold using the payroll budget method may be eligible for a guaranteed issue program under which the initial minimum Death Benefit is $25,000 and the Contracts are based on unisex mortality tables.  Any Prudential representative authorized to sell this Contract can provide further details concerning the payroll budget method of paying premiums.

Reports to Contract Owners

Once each year, we will send you a statement that provides certain information pertinent to your Contract.  This statement will detail values, transactions made, and specific Contract data that apply only to your particular Contract.

You will also be sent annual and semi-annual reports of the Funds showing the financial condition of the Portfolios and the investments held in each Portfolio.

4

UNDERWRITING PROCEDURES

When you express interest in obtaining insurance from us, you may apply for coverage in one of two ways, via a paper application or through our Worksheet process.  When using the paper application, a registered representative completes a full application and submits it to our underwriting unit to commence the underwriting process.  A registered representative may be an agent/broker who is a representative of Pruco Securities, LLC (“Prusec”), a broker dealer affiliate of Prudential, or in some cases, a broker dealer not directly affiliated with Prudential.

When using the Worksheet process, a registered representative typically collects enough applicant information to start the underwriting process.  The representative will submit the information to our New Business Department to begin processing, which includes scheduling a direct call to the applicant to obtain medical information, and to confirm other data.

Regardless of which of the two underwriting processes is followed, once we receive the necessary information, which may include doctors’ statements, medical examinations from physicians or paramedical vendors, test results, and other information, we will make a decision regarding our willingness to accept the risk, and the price at which we will accept the risk.  We will issue the Contract when the risk has been accepted and priced.

ADDITIONAL INFORMATION ABOUT CHARGES

Reduction of Charges for Concurrent Sales to Several Individuals

Prudential may reduce the sales charges and/or other charges on individual Contracts sold to members of a class of associated individuals, or to a trustee, employer or other entity representing such a class, where it is expected that such multiple sales will result in savings of sales or administrative expenses.  Prudential determines both the eligibility for such reduced charges, as well as the amount of such reductions, by considering the following factors:

(1)   the number of individuals;

(2)   the total amount of premium payments expected to be received from these Contracts;

(3)   the nature of the association between these individuals, and the expected persistency of the individual Contracts;

(4)   the purpose for which the individual Contracts are purchased and whether that purpose makes it likely that expenses will be reduced; and

(5)   any other circumstances which Prudential believes to be relevant in determining whether reduced sales or administrative expenses may be expected.

Some of the reductions in charges for these sales may be contractually guaranteed; other reductions may be withdrawn or modified by Prudential on a uniform basis.  Prudential's reductions in charges for these sales will not be unfairly discriminatory to the interests of any individual Contract Owners.

ADDITIONAL INFORMATION ABOUT CONTRACTS IN DEFAULT

When your Contract is in default, you may not change the way in which subsequent premiums are allocated or increase the amount of your insurance by increasing the Face Amount of the Contract.

DISTRIBUTION AND COMPENSATION

In an effort to promote the sale of our variable products (which may include the placement of our Contracts on a preferred or recommended company or product list and/or access to a broker-dealer’s registered representatives), we or Prusec may enter into compensation arrangements with certain broker-dealer firms authorized by Prusec to sell the Contract, or branches of such firms, with respect to certain or all registered representatives of such firms under which such firms may receive separate compensation or reimbursement for, among other things, training of sales personnel, marketing and / or administrative and / or other services they provide to us or our affiliates.  To the extent permitted by applicable rules, laws, and regulations, Prusec may pay or allow other promotional incentives or payments in the form of cash or non-cash compensation.  These arrangements may not be offered to all firms, and the terms of such arrangements may differ between firms.  You should note that firms and individual registered representatives and branch managers within some firms participating in one of these compensation arrangements might receive greater compensation for selling the Contract than for selling a different Contract that is not eligible for these compensation arrangements.

5

Prudential makes these promotional payments directly to or in sponsorship of the firm (or its affiliated broker/dealers). Examples of arrangements under which such payments may be made currently include, but are not limited to, sponsorships, conferences (national, regional and top producer), speaker fees, promotional items and reimbursements to firms for marketing activities or services paid by the firms and/or their individual representatives.  The amount of these payments varies widely because some payments may encompass only a single event, such as a conference, and others have a much broader scope.

The list below provides the names of the firms (or their affiliated broker/dealers) that we are aware of (as of December 31, 2009) that received payment or accrued a payment amount with respect to variable product business during 2009.  The least amount paid or accrued and the greatest amount paid or accrued during 2009 were $3 and $3,913,733, respectively.

Name of Firms:

1 Financial Marketplace Securities LLC, 1ST Global Capital Corp., 3 Mark Equities Inc., Ace Diversified Capital, Inc., AFA Financial Group LLC, Allstate Financial Services LLC, American Portfolios Financial Services Inc., Ameriprise Financial Services Inc., Ameritas Investment Corp., AON Benfield Securities, Inc., Arlington Securities Inc., Askar Corp., Associated Securities Corp., AXA Advisors LLC, BB&T Investments Services Inc., BCG Securities Inc., Becker & Suffern Ltd., Benefit Funding Services LLC, Berthel Fisher & Company Financial Services Inc., BG Worldwide Securities Inc., Brecek & Young Advisors Inc., Broker Dealer Financial Services Corp., Brokers International Financial Services, Brookstone Securities, Inc., Cadaret  Grant & Company Inc., Cambridge Investment Research Inc., Cambridge Legacy Securities LLC, Cantella & Company Inc., Cantone Research Inc., Capital Analysts Inc., Capital Financial Services Inc., Capital Investment Group Inc., Catholic Financial Services Corp., CBIZ Financial Solutions Inc., Centara Capital Securities, Inc., Centaurus Financial Inc., CFD Investments Inc., CFG Financial Associates Inc., CIBC World Markets Corp., Citigroup Global Markets Inc., Clark Securities Inc., CMS Investment Resources Inc., Comerica Securities Inc., Commonwealth Financial Network, Comprehensive Asset Management & Services, Conservative Financial Services Inc., Cornerstone Institutional Investors Inc., CPS Financial and Insurance Services Inc., Crown Capital Securities LP, Curtis Securities LLC, Cutter & Company Brokerage Inc., Dempsey Financial Network Inc., Dewaay Financial Network, LLC., Dolphin Securities Inc., Edward D. Jones and Company LP, Elite Securities Inc., Empire Securities Corp., Eplanning Securities Inc., Equity Services Inc., Essex Financial Services Inc., Farmers Financial Solutions Inc., FAS Corp., Ferris Baker Watts Inc., Fifth Third Securities Inc., Financial Network Investment Corp., Financial West Group, Fintegra LLC, First Allied Securities Inc., First Brokerage America, LLC., First Heartland Capital Inc., First Midwest Securities Inc., Foothill Securities Inc., Fortune Financial Services Inc., Fortune Securities Inc., FPCM Securities, LLC, FSC Securities Corp., GA Financial Inc., Geneos Wealth Management Inc., Genworth Financial Securities Corp., Girard Securities Inc., Great American Advisors Inc., Guardian Investors Services Corp., Gunn Allen Financial Inc., GWN Securities Inc., H&R Block Financial Advisors Inc., Haas Financial Products Inc., Hancock Securities Group, Hantz Financial Services, Inc., Harbour Investments Inc., HD Vest Investment Securities Inc., Herndon Plant Oakley Limited, Horan Securities Inc., Hornor Townsend & Kent Inc., Huntleigh Securities Corp., IMS Securities Inc., ING Financial Partners Inc., Interlink Securities Corp., Intervest Int'l. Equities Corp., Invest Financial Corp., Investacorp Inc., Investment Planners Inc., Investors Capital Corp., Investors Security Company Inc., Janney Montgomery Scott LLC, JJB Hilliard, WL Lyons, LLC, JW Cole Financial Inc., KCD Financial Inc., KMS Financial Services, Inc., Kovack Securities Inc., Landoak Securities, Larimer Capital Corp., Lasalle St. Securities LLC, The Leaders Group Inc., Legend Equities Corp., Lifemark Securities Corp., Lincoln Financial Advisors Corp., Lincoln Financial Securities Corp., Lincoln Investment Planning Inc., LM Kohn & Company, Loria Financial Group LLC, LPL Financial Corp., LSY Inc. DBA American Investors Company, M Financial Securities Marketing, Inc., M Holdings Securities Inc., M&T Securities, Inc., MAFG RIA Services Inc., Medallion Investment Services Inc., Meridien Financial Group Inc., Merrill Lynch Pierce Fenner & Smith Inc., Metlife Securities, Inc., Mid Atlantic Capital Corp., MMC Securities Corp., MML Investors Services Inc., Money Concepts Capital Corp., Moors & Cabot Inc., Morgan Keegan & Company Inc., Morgan Stanley & Co. Inc., MTL Equity Products Inc., Multi Financial Securities Corp., Mutual Service Corp., MWA Financial Services Inc., National Planning Corp., NBC Securities Inc., New England Securities, Newport Group Securities Inc., Next Financial Group Inc., NFP Securities Inc., Northland Securities Inc., Northwestern Mutual Investment Services, NPB Financial Group, LLC, NRP Financial, Inc., NYLife Securities, Oberweis Securities, Ogilvie Security Advisors Corp., Omnivest Inc., One Securities Corp., Oneamerica Securities Inc., Pacific West Securities Inc., Packerland Brokerage Services Inc., Papalia Securities, Inc., Park Avenue Securities LLC, Partnervest Securities Inc., PJ Robb Variable Corp., Primevest Financial Services Inc., Princor Financial Services, Private Consulting Group Inc., Proequities Inc., Prospera Financial Services, Inc., Purshe Kaplan Sterling Investments Inc., QA3 Financial Corp., Quest Capital Strategies Inc., Questar Capital Corp., RA Bench, Rampart Financial Services Inc., Raymond James & Associates Inc., RBC Capital Markets Corp., Resource Horizons Group LLC, Retirement Capital Group Securities Inc., RMIN Securities Inc., Robert W Baird & Co. Inc.,

6

Royal Alliance Associates Inc., Rydex Distributors Inc., Sagepoint Financial, Inc., Sammons Securities Company LLC, SCF Securities Inc., Securian Financial Services Inc., Securities America Inc., Securities Service Network Inc., Sigma Financial Corp., Signal Securities Inc., Signator Investors Inc., SII Investments Inc., SMH Capital, Inc., Smith, Brown & Groover Inc., Southwest Securities Inc., SSI Equity Services Inc., Stanley Laman Group Securities LLC, Stephens Inc., Stifel Nicolaus & Co. Inc., Stone & Youngberg LLC, Summit Brokerage Services, Inc., Summit Equities Inc., Sunset Financial Services Inc., Symetra Investments Services Inc., Syndicated Capital Inc., Synergy Investment Group LLC, TD Wealth Management Services, Inc., TFS Securities Inc., The Enterprise Securities Company, The Investment Center Inc., The New Penfacs, Inc., The ON Equity Sales Company, The Strategic Financial Alliance Inc., Thoroughbred Financial Services LLC, Tower Square Securities Inc., Trading Services Group Inc., Transamerica Financial Advisors, Inc., Triad Advisors Inc., Trustmont Financial Group, Inc., UBS Financial Services Inc., United Planners Financial Services, Univest Investments Inc., USA Advanced Planners, Inc., USA Financial Securities Corp., USI Securities Inc., UVEST Investment Services Inc., Valmark Securities Inc., VFIC Securities Inc., VSR Financial Services Inc., Wachovia Insurance Services Broker Dealer, Wachovia Securities LLC, Wall Street Financial Group Inc., Walnut Street Securities, Waterstone Financial Group Inc., Wells Fargo Advisors LLC, Wells Fargo Investments LLC, Western Equity Group Inc., Windham Financial Services Inc., Woodbury Financial Services Inc., Workman Securities Corp., World Equity Group, Worth Financial Group Inc., WRP Investments Inc.

Your registered representative can provide you with more information about the compensation arrangements that apply upon the sale of the Contract.

EXPERTS

The consolidated financial statements of The Prudential Insurance Company of America and its subsidiaries as of December 31, 2009 and 2008 and for each of the three years in the period ended December 31, 2009 and the financial statements of The Prudential Variable Appreciable Account as of December 31, 2009 and for each of the two years in the period then ended included in this Statement of Additional Information have been so included in reliance on the reports of PricewaterhouseCoopers LLP, an independent registered public accounting firm, given on the authority of said firm as experts in auditing and accounting. PricewaterhouseCoopers LLP's principal business address is 300 Madison Avenue, New York, New York 10017.

Actuarial matters included in this Statement of Additional Information have been examined by Nancy D. Davis, MAAA, FSA, Vice President and Actuary of Prudential.

PERFORMANCE DATA

Average Annual Total Return

The Account may advertise average annual total return information calculated according to a formula prescribed by the U.S. Securities and Exchange Commission (“SEC”).  Average annual total return shows the average annual percentage increase, or decrease, in the value of a hypothetical contribution allocated to a Subaccount from the beginning to the end of each specified period of time.  The SEC standardized version of this performance information is based on an assumed contribution of $1,000 allocated to a Subaccount at the beginning of each period and full withdrawal of the value of that amount at the end of each specified period.  This method of calculating performance further assumes that (i) a $1,000 contribution was allocated to a Subaccount and (ii) no transfers or additional payments were made.  Premium taxes are not included in the term “charges” for purposes of this calculation.  Average annual total return is calculated by finding the average annual compounded rates of return of a hypothetical contribution that would compare the Unit Value on the first day of a specified period to the ending redeemable value at the end of the period according to the following formula:

P(1+T)n = ERV

Where T equals average annual total return, where ERV (the ending redeemable value) is the value at the end of the applicable period of a hypothetical contribution of $1,000 made at the beginning of the applicable period, where P equals a hypothetical contribution of $1,000, and where n equals the number of years.

Non-Standard Total Return

In addition to the standardized average annual total return information described above, we may present total return information computed on bases different from that standardized method.  The Account may also present aggregate

7

total return figures for various periods, reflecting the cumulative change in value of an investment in the Account for the specified period.

For the periods prior to the date the Subaccounts commenced operations, non-standard performance information for the Contracts will be calculated based on the performance of the Funds and the assumption that the Subaccounts were in existence for the same periods as those indicated for the Funds, with the level of Contract charges that were in effect at the inception of the Subaccounts (this is referred to as “hypothetical performance data”).  Standard and non-standard average annual return calculations include the mortality and expense risk charge under the Contract, but do not reflect other life insurance contract charges (sales, administration, and actual cost of insurance) nor any applicable surrender or lapse charges, which would significantly lower the returns.  Information stated for any given period does not indicate or represent future performance.

Money Market Subaccount Yield

The “total return” figures for the Money Market Subaccount are calculated using historical investment returns of the Money Market Portfolio of The Prudential Series Fund as if Prudential’s Variable Appreciable Life® had been investing in that Subaccount during a specified period.  Fees associated with the Series Fund are reflected; however, all fees, expenses, and charges associated with Prudential’s Variable Appreciable Life® are not reflected.

The yield is computed by determining the net change, exclusive of capital changes, in the value of a hypothetical pre-existing account having a balance of one accumulation unit of the Money Market Subaccount at the beginning of a specified period, subtracting a hypothetical charge reflecting deductions from Contract Owner accounts, and dividing the difference by the value of the Subaccount at the beginning of the base period to obtain the base period return, and then multiplying the base period return by (365/7), with the resulting figure carried to the nearest ten-thousandth of 1%.  The effective yield is obtained by taking the base period return, adding 1, raising the sum to a power equal to 365 divided by 7, and subtracting 1 from the result, according to the following formula: Effective Yield ([base period return + 1] 365/7)-1.

The yields on amounts held in the Money Market Subaccount will fluctuate on a daily basis.  Therefore, the stated yields for any given period are not an indication of future yields.

FINANCIAL STATEMENTS

The financial statements of the Account should be distinguished from the consolidated financial statements of Prudential and its subsidiaries, which should be considered only as bearing upon the ability of Prudential to meet its obligations under the Contracts.

8

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF NET ASSETS

December 31, 2009

	SUBACCOUNTS
	Prudential Money Market Portfolio		Prudential Diversified Bond Portfolio		Prudential Equity Portfolio		Prudential Flexible Managed Portfolio
ASSETS
Investment in the portfolios, at value	$	157,487,420	$	210,943,262	$	1,282,522,395	$	988,327,714
Net Assets	$	157,487,420	$	210,943,262	$	1,282,522,395	$	988,327,714
NET ASSETS, representing:
Accumulation units	$	157,487,420	$	210,943,262	$	1,282,522,395	$	988,327,714
	$	157,487,420	$	210,943,262	$	1,282,522,395	$	988,327,714
Units outstanding		76,091,577		54,662,544		228,516,134		243,745,031
Portfolio shares held		15,748,742		18,901,726		57,512,215		69,210,624
Portfolio net asset value per share	$	10.00	$	11.16	$	22.30	$	14.28
Investment in portfolio shares, at cost	$	157,487,420	$	203,813,779	$	1,299,228,548	$	1,096,745,087

STATEMENT OF OPERATIONS

For the year ended December 31, 2009

	SUBACCOUNTS
	Prudential Money Market Portfolio			Prudential Diversified Bond Portfolio			Prudential Equity Portfolio			Prudential Flexible Managed Portfolio
INVESTMENT INCOME
Dividend income	$	660,574		$	9,064,035		$	17,198,716		$	30,934,326
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		1,159,169			1,391,580			7,860,455			6,693,821
Reimbursement for excess expenses		0			0			0			0
NET EXPENSES		1,159,169			1,391,580			7,860,455			6,693,821
NET INVESTMENT INCOME (LOSS)		(498,595	)		7,672,455			9,338,261			24,240,505
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			3,377,403			0			0
Realized gain (loss) on shares redeemed		0			(1,016,875	)		(48,729,576	)		(25,712,918	)
Net change in unrealized gain (loss) on investments		0			24,488,710			390,777,032			160,828,965
NET GAIN (LOSS) ON INVESTMENTS		0			26,849,238			342,047,456			135,116,047
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	(498,595	)	$	34,521,693		$	351,385,717		$	159,356,552

The accompanying notes are an integral part of these financial statements.

A1

SUBACCOUNTS (Continued)
Prudential Conservative Balanced Portfolio		Prudential High Yield Bond Portfolio		Prudential Stock Index Portfolio		Prudential Value Portfolio		Prudential Natural Resources Portfolio		Prudential Global Portfolio
$	853,331,916	$	121,071,820	$	892,821,460	$	497,812,473	$	586,287,885	$	278,431,247
$	853,331,916	$	121,071,820	$	892,821,460	$	497,812,473	$	586,287,885	$	278,431,247
$	853,331,916	$	121,071,820	$	892,821,460	$	497,812,473	$	586,287,885	$	278,431,247
$	853,331,916	$	121,071,820	$	892,821,460	$	497,812,473	$	586,287,885	$	278,431,247
	241,710,541		33,719,991		167,907,872		80,091,093		33,793,440		135,136,857
	58,247,912		25,066,629		32,012,243		32,967,713		15,781,639		16,692,521
$	14.65	$	4.83	$	27.89	$	15.10	$	37.15	$	16.68
$	837,724,574	$	133,751,901	$	721,022,294	$	562,980,131	$	394,730,051	$	285,184,318

SUBACCOUNTS (Continued)
Prudential Conservative Balanced Portfolio			Prudential High Yield Bond Portfolio			Prudential Stock Index Portfolio			Prudential Value Portfolio			Prudential Natural Resources Portfolio			Prudential Global Portfolio
$	29,215,588		$	9,638,719		$	21,652,297		$	8,659,627		$	3,361,489		$	6,825,402
	5,822,983			740,018			5,319,464			2,985,707			3,374,813			1,582,135
	0			0			0			0			(83	)		0
	5,822,983			740,018			5,319,464			2,985,707			3,374,730			1,582,135
	23,392,605			8,898,701			16,332,833			5,673,920			(13,241	)		5,243,267
	0			0			0			0			55,510,506			0
	(9,200,751	)		(5,947,598	)		(21,780,886	)		(32,106,698	)		(44,213,726	)		(14,637,507	)
	124,455,174			34,948,959			188,173,813			173,960,543			249,188,536			74,576,438
	115,254,423			29,001,361			166,392,927			141,853,845			260,485,316			59,938,931
$	138,647,028		$	37,900,062		$	182,725,760		$	147,527,765		$	260,472,075		$	65,182,198

The accompanying notes are an integral part of these financial statements.

A2

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF NET ASSETS

December 31, 2009

	SUBACCOUNTS
	Prudential Government Income Portfolio		Prudential Jennison Portfolio		Prudential Small Capitalization Stock Portfolio		T. Rowe Price International Stock Portfolio
ASSETS
Investment in the portfolios, at value	$	108,926,678	$	427,900,210	$	231,938,186	$	1,627,016
Net Assets	$	108,926,678	$	427,900,210	$	231,938,186	$	1,627,016
NET ASSETS, representing:
Accumulation units	$	108,926,678	$	427,900,210	$	231,938,186	$	1,627,016
	$	108,926,678	$	427,900,210	$	231,938,186	$	1,627,016
Units outstanding		31,384,050		166,411,868		71,061,902		1,304,713
Portfolio shares held		9,184,374		20,503,125		16,770,657		132,601
Portfolio net asset value per share	$	11.86	$	20.87	$	13.83	$	12.27
Investment in portfolio shares, at cost	$	104,650,841	$	412,802,464	$	244,432,731	$	1,496,130

STATEMENT OF OPERATIONS

For the year ended December 31, 2009

	SUBACCOUNTS
	Prudential Government Income Portfolio			Prudential Jennison Portfolio			Prudential Small Capitalization Stock Portfolio			T. Rowe Price International Stock Portfolio
INVESTMENT INCOME
Dividend income	$	3,333,250		$	2,416,848		$	3,609,202		$	36,243
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		773,667			2,513,349			1,362,293			7,696
Reimbursement for excess expenses		0			0			0			0
NET EXPENSES		773,667			2,513,349			1,362,293			7,696
NET INVESTMENT INCOME (LOSS)		2,559,583			(96,501	)		2,246,909			28,547
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		379,590			0			19,587,379			0
Realized gain (loss) on shares redeemed		(237,763	)		(22,780,468	)		(9,688,725	)		(77,221	)
Net change in unrealized gain (loss) on investments		4,523,484			151,539,502			33,117,919			601,183
NET GAIN (LOSS) ON INVESTMENTS		4,665,311			128,759,034			43,016,573			523,962
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	7,224,894		$	128,662,533		$	45,263,482		$	552,509

The accompanying notes are an integral part of these financial statements.

A3

SUBACCOUNTS (Continued)
Janus Aspen Janus Portfolio - Institutional Shares		MFS VIT Growth Series - Initial Class		American Century VP Value Fund		Prudential SP Davis Value Portfolio		Prudential SP Small Cap Value Portfolio		Prudential SP PIMCO Total Return Portflio
$	6,394,623	$	2,503,309	$	2,269,870	$	1,284,661	$	2,718,459	$	0
$	6,394,623	$	2,503,309	$	2,269,870	$	1,284,661	$	2,718,459	$	0
$	6,394,623	$	2,503,309	$	2,269,870	$	1,284,661	$	2,718,459	$	0
$	6,394,623	$	2,503,309	$	2,269,870	$	1,284,661	$	2,718,459	$	0
	4,571,245		1,612,417		1,193,456		1,045,958		2,187,532		0
	298,396		116,813		429,900		148,002		277,677		0
$	21.43	$	21.43	$	5.28	$	8.68	$	9.79	$	0
$	5,607,670	$	1,916,653	$	2,604,979	$	1,112,300	$	2,786,669	$	0

SUBACCOUNTS (Continued)
Janus Aspen Janus Portfolio - Institutional Shares			MFS VIT Growth Series - Initial Class			American Century VP Value Fund			Prudential SP Davis Value Portfolio			Prudential SP Small Cap Value Portfolio			Prudential SP PIMCO Total Return Portflio
$	27,870		$	6,426		$	110,736		$	16,973		$	31,539		$	207,971
	30,735			12,419			11,726			8,814			18,333			47,810
	0			0			0			0			0			0
	30,735			12,419			11,726			8,814			18,333			47,810
	(2,865	)		(5,993	)		99,010			8,159			13,206			160,161
	0			0			0			0			0			163,902
	(239,278	)		(65,482	)		(159,825	)		(107,645	)		(137,973	)		350,519
	1,846,695			745,248			429,718			402,399			740,186			40,609
	1,607,417			679,766			269,893			294,754			602,213			555,030
$	1,604,552		$	673,773		$	368,903		$	302,913		$	615,419		$	715,191

The accompanying notes are an integral part of these financial statements.

A4

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF NET ASSETS

December 31, 2009

	SUBACCOUNTS
	Prudential SP PIMCO High Yield Portfolio		Janus Aspen Janus Portfolio - Service Shares		Prudential SP Strategic Partners Focused Growth Portfolio		Prudential SP Mid Cap Growth Portfolio
ASSETS
Investment in the portfolios, at value	$	0	$	323,136	$	936,372	$	387,141
Net Assets	$	0	$	323,136	$	936,372	$	387,141
NET ASSETS, representing:
Accumulation units	$	0	$	323,136	$	936,372	$	387,141
	$	0	$	323,136	$	936,372	$	387,141
Units outstanding		0		297,574		753,235		393,905
Portfolio shares held		0		15,307		135,903		85,841
Portfolio net asset value per share	$	0	$	21.11	$	6.89	$	4.51
Investment in portfolio shares, at cost	$	0	$	302,246	$	833,834	$	337,998

STATEMENT OF OPERATIONS

For the year ended December 31, 2009

	SUBACCOUNTS
	Prudential SP PIMCO High Yield Portfolio			Janus Aspen Janus Portfolio - Service Shares			Prudential SP Strategic Partners Focused Growth Portfolio			Prudential SP Mid Cap Growth Portfolio
INVESTMENT INCOME
Dividend income	$	91,898		$	1,045		$	0		$	0
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		10,267			2,551			5,787			2,725
Reimbursement for excess expenses		0			0			0			0
NET EXPENSES		10,267			2,551			5,787			2,725
NET INVESTMENT INCOME (LOSS)		81,631			(1,506	)		(5,787	)		(2,725	)
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			0			0			0
Realized gain (loss) on shares redeemed		(75,445	)		(27,058	)		(34,136	)		(111,091	)
Net change in unrealized gain (loss) on investments		436,837			114,608			286,637			202,347
NET GAIN (LOSS) ON INVESTMENTS		361,392			87,550			252,501			91,256
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	443,023		$	86,044		$	246,714		$	88,531

The accompanying notes are an integral part of these financial statements.

A5

SUBACCOUNTS (Continued)
SP Prudential U.S. Emerging Growth Portfolio		Prudential SP Conservative Asset Allocation Portfolio		Prudential SP Balanced Asset Allocation Portfolio		Prudential SP Growth Asset Allocation Portfolio		Prudential SP Aggressive Growth Asset Allocation Portfolio		Prudential SP International Growth Portfolio
$	1,051,123	$	0	$	0	$	1,352,255	$	0	$	2,810,536
$	1,051,123	$	0	$	0	$	1,352,255	$	0	$	2,810,536
$	1,051,123	$	0	$	0	$	1,352,255	$	0	$	2,810,536
$	1,051,123	$	0	$	0	$	1,352,255	$	0	$	2,810,536
	624,008		0		0		1,074,494		0		2,071,459
	162,965		0		0		168,400		0		607,027
$	6.45	$	0	$	0	$	8.03	$	0	$	4.63
$	941,934	$	0	$	0	$	1,521,760	$	0	$	3,044,760

SUBACCOUNTS (Continued)
SP Prudential U.S. Emerging Growth Portfolio			Prudential SP Conservative Asset Allocation Portfolio			Prudential SP Balanced Asset Allocation Portfolio			Prudential SP Growth Asset Allocation Portfolio			Prudential SP Aggressive Growth Asset Allocation Portfolio			Prudential SP International Growth Portfolio
$	5,968		$	29,525		$	22,410		$	26,603		$	14,372		$	51,303
	12,271			4,675			4,397			9,305			7,620			21,292
	0			0			0			0			0			0
	12,271			4,675			4,397			9,305			7,620			21,292
	(6,303	)		24,850			18,013			17,298			6,752			30,011
	0			0			5,952			17,398			0			0
	(670,934	)		(13,458	)		(34,597	)		(102,073	)		(146,293	)		(599,543	)
	1,140,515			117,648			159,564			346,921			387,603			1,286,002
	469,581			104,190			130,919			262,246			241,310			686,459
$	463,278		$	129,040		$	148,932		$	279,544		$	248,062		$	716,470

The accompanying notes are an integral part of these financial statements.

A6

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF NET ASSETS

December 31, 2009

	SUBACCOUNTS
	Prudential SP International Value Portfolio		AST Marsico Capital Growth Portfolio		AST T. Rowe Price Large-Cap Growth Portfolio		AST Large-Cap Value Portfolio
ASSETS
Investment in the portfolios, at value	$	3,875,283	$	254,949	$	432,187	$	476,500
Net Assets	$	3,875,283	$	254,949	$	432,187	$	476,500
NET ASSETS, representing:
Accumulation units	$	3,875,283	$	254,949	$	432,187	$	476,500
	$	3,875,283	$	254,949	$	432,187	$	476,500
Units outstanding		2,644,927		32,527		45,424		65,552
Portfolio shares held		610,281		15,670		40,429		40,042
Portfolio net asset value per share	$	6.35	$	16.27	$	10.69	$	11.90
Investment in portfolio shares, at cost	$	3,726,589	$	263,163	$	383,940	$	384,437

STATEMENT OF OPERATIONS

For the year ended December 31, 2009

	SUBACCOUNTS
	Prudential SP International Value Portfolio			AST Marsico Capital Growth Portfolio			AST T. Rowe Price Large-Cap Growth Portfolio			AST Large-Cap Value Portfolio
INVESTMENT INCOME
Dividend income	$	104,003		$	909		$	0		$	12,053
EXPENSES
Charges to contract owners for assuming mortality risk and expense risk		28,357			1,391			2,255			3,624
Reimbursement for excess expenses		0			0			0			0
NET EXPENSES		28,357			1,391			2,255			3,624
NET INVESTMENT INCOME (LOSS)		75,646			(482	)		(2,255	)		8,429
NET REALIZED AND UNREALIZED GAIN (LOSS) ON INVESTMENTS
Capital gains distributions received		0			0			0			0
Realized gain (loss) on shares redeemed		(242,268	)		(70,890	)		(21,807	)		(203,482	)
Net change in unrealized gain (loss) on investments		1,119,476			107,001			137,203			258,237
NET GAIN (LOSS) ON INVESTMENTS		877,208			36,111			115,396			54,755
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS	$	952,854		$	35,629		$	113,141		$	63,184

The accompanying notes are an integral part of these financial statements.

A7

SUBACCOUNTS (Continued)
AST Small-Cap Growth Portfolio		AST PIMCO Total Return Bond Portfolio		AST Aggressive Asset Allocation Portfolio		AST Balanced Asset Allocation Portfolio		AST Preservation Asset Allocation Portfolio
$	1,242,671	$	6,314,573	$	1,164,260	$	840,285	$	505,958
$	1,242,671	$	6,314,573	$	1,164,260	$	840,285	$	505,958
$	1,242,671	$	6,314,573	$	1,164,260	$	840,285	$	505,958
$	1,242,671	$	6,314,573	$	1,164,260	$	840,285	$	505,958
	137,984		635,662		114,000		83,016		50,498
	82,900		539,707		142,156		84,197		46,935
$	14.99	$	11.70	$	8.19	$	9.98	$	10.78
$	1,316,966	$	6,330,764	$	1,147,201	$	833,561	$	504,083

SUBACCOUNTS (Continued)
AST Small-Cap Growth Portfolio			AST PIMCO Total Return Bond Portfolio			AST Aggressive Asset Allocation Portfolio			AST Balanced Asset Allocation Portfolio			AST Preservation Asset Allocation Portfolio
$	505		$	0		$	0		$	0		$	0
	8,674			4,128			1,321			813			421
	0			0			0			0			0
	8,674			4,128			1,321			813			421
	(8,169	)		(4,128	)		(1,321	)		(813	)		(421	)
	0			0			0			0			0
	(14,850	)		(7	)		(1	)		(17	)		28
	325,287			(16,191	)		17,059			6,724			1,875
	310,437			(16,198	)		17,058			6,707			1,903
$	302,268		$	(20,326	)	$	15,737		$	5,894		$	1,482

The accompanying notes are an integral part of these financial statements.

A8

[This page intentionally left blank.]

A9

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS

For the years ended December 31, 2009 and 2008

	SUBACCOUNTS
	Prudential Money Market Portfolio						Prudential Diversified Bond Portfolio
	01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008
OPERATIONS
Net investment income (loss)	$	(498,595	)	$	3,227,443		$	7,672,455		$	8,398,619
Capital gains distributions received		0			0			3,377,403			1,749,161
Realized gain (loss) on shares redeemed		0			0			(1,016,875	)		(782,927	)
Net change in unrealized gain (loss) on investments		0			0			24,488,710			(17,336,348	)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS		(498,595	)		3,227,443			34,521,693			(7,971,495	)
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		14,717,238			14,026,549			14,632,653			17,548,295
Policy loans		(5,371,685	)		(5,940,080	)		(4,514,243	)		(4,465,420	)
Policy loan repayments and interest		6,146,364			4,419,249			4,745,356			3,654,904
Surrenders, withdrawals and death benefits		(26,763,003	)		(29,943,239	)		(15,853,585	)		(12,797,713	)
Net transfers between other subaccounts
or fixed rate option		8,747,936			31,118,739			7,068,312			2,572,369
Withdrawal and other charges		(8,941,144	)		(8,505,524	)		(9,925,977	)		(9,324,921	)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CONTRACT
OWNER TRANSACTIONS		(11,464,294	)		5,175,694			(3,847,484	)		(2,812,486	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(11,962,889	)		8,403,137			30,674,209			(10,783,981	)
NET ASSETS
Beginning of period		169,450,309			161,047,172			180,269,053			191,053,034
End of period	$	157,487,420		$	169,450,309		$	210,943,262		$	180,269,053
Beginning units		81,375,566			78,737,441			55,975,690			57,023,552
Units issued		33,812,904			44,242,802			9,343,952			8,872,339
Units redeemed		(39,096,893	)		(41,604,677	)		(10,657,098	)		(9,920,201	)
Ending units		76,091,577			81,375,566			54,662,544			55,975,690

The accompanying notes are an integral part of these financial statements.

A10

SUBACCOUNTS (Continued)
Prudential Equity Portfolio						Prudential Flexible Managed Portfolio						Prudential Conservative Balanced Portfolio
01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008
$	9,338,261		$	9,976,035		$	24,240,505		$	23,774,113		$	23,392,605		$	24,329,389
	0			149,751,855			0			86,420,880			0			0
	(48,729,576	)		(19,978,984	)		(25,712,918	)		(11,470,439	)		(9,200,751	)		(4,536,192	)
	390,777,032			(774,578,580	)		160,828,965			(405,063,368	)		124,455,174			(239,509,293	)
	351,385,717			(634,829,674	)		159,356,552			(306,338,814	)		138,647,028			(219,716,096	)
	113,654,623			145,128,773			88,564,203			114,926,842			73,430,514			98,280,742
	(30,421,461	)		(39,165,454	)		(22,245,389	)		(27,321,115	)		(17,864,440	)		(19,533,899	)
	39,358,207			35,348,174			29,284,709			25,449,940			21,702,058			19,663,539
	(103,021,838	)		(104,613,924	)		(80,424,761	)		(80,042,025	)		(67,289,896	)		(71,157,129	)
	(18,111,166	)		(39,396,408	)		(18,977,245	)		(19,041,882	)		(16,973,140	)		(17,565,965	)
	(62,572,790	)		(69,677,604	)		(52,579,420	)		(57,175,859	)		(44,134,477	)		(47,526,125	)
	(61,114,425	)		(72,376,443	)		(56,377,903	)		(43,204,099	)		(51,129,381	)		(37,838,837	)
	290,271,292			(707,206,117	)		102,978,649			(349,542,913	)		87,517,647			(257,554,933	)
	992,251,103			1,699,457,220			885,349,065			1,234,891,978			765,814,269			1,023,369,202
$	1,282,522,395		$	992,251,103		$	988,327,714		$	885,349,065		$	853,331,916		$	765,814,269
	242,180,217			254,580,280			259,855,363			270,314,947			258,075,423			269,072,223
	35,197,111			32,681,638			33,378,391			32,478,028			31,432,758			31,772,710
	(48,861,194	)		(45,081,701	)		(49,488,723	)		(42,937,612	)		(47,797,640	)		(42,769,510	)
	228,516,134			242,180,217			243,745,031			259,855,363			241,710,541			258,075,423

The accompanying notes are an integral part of these financial statements.

A11

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS

For the years ended December 31, 2009 and 2008

	SUBACCOUNTS
	Prudential High Yield Bond Portfolio						Prudential Stock Index Portfolio
	01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008
OPERATIONS
Net investment income (loss)	$	8,898,701		$	8,235,656		$	16,332,833		$	15,772,298
Capital gains distributions received		0			0			0			0
Realized gain (loss) on shares redeemed		(5,947,598	)		(5,686,317	)		(21,780,886	)		(9,022,009	)
Net change in unrealized gain (loss) on investments		34,948,959			(27,593,311	)		188,173,813			(458,647,848	)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM OPERATIONS		37,900,062			(25,043,972	)		182,725,760			(451,897,559	)
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		8,314,193			10,809,445			70,962,919			86,930,165
Policy loans		(2,587,835	)		(2,919,717	)		(17,755,012	)		(22,318,784	)
Policy loan repayments and interest		3,655,969			2,295,844			23,402,799			19,428,033
Surrenders, withdrawals and death benefits		(9,204,071	)		(7,388,577	)		(58,991,847	)		(64,238,710	)
Net transfers between other subaccounts
or fixed rate option		5,391,355			(3,293,791	)		(24,128,729	)		(2,555,006	)
Withdrawal and other charges		(5,439,227	)		(5,190,304	)		(35,363,949	)		(40,103,496	)
NET INCREASE (DECREASE) IN NET ASSETS
RESULTING FROM CONTRACT
OWNER TRANSACTIONS		130,384			(5,687,100	)		(41,873,819	)		(22,857,798	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		38,030,446			(30,731,072	)		140,851,941			(474,755,357	)
NET ASSETS
Beginning of period		83,041,374			113,772,446			751,969,519			1,226,724,876
End of period	$	121,071,820		$	83,041,374		$	892,821,460		$	751,969,519
Beginning units		33,216,519			35,121,006			178,098,891			182,659,285
Units issued		7,625,076			4,556,832			23,744,627			23,410,048
Units redeemed		(7,121,604	)		(6,461,319	)		(33,935,646	)		(27,970,442	)
Ending units		33,719,991			33,216,519			167,907,872			178,098,891

The accompanying notes are an integral part of these financial statements.

A12

SUBACCOUNTS (Continued)
Prudential Value Portfolio						Prudential Natural Resources Portfolio						Prudential Global Portfolio
01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008
$	5,673,920		$	6,508,443		$	(13,241	)	$	450,081		$	5,243,267		$	3,662,758
	0			120,603,221			55,510,506			94,363,450			0			19,689,917
	(32,106,698	)		(16,700,292	)		(44,213,726	)		(24,889,475	)		(14,637,507	)		(10,340,272	)
	173,960,543			(399,737,218	)		249,188,536			(502,074,282	)		74,576,438			(186,705,473	)
	147,527,765			(289,325,846	)		260,472,075			(432,150,226	)		65,182,198			(173,693,070	)
	39,587,095			52,275,535			20,089,648			27,545,596			21,485,727			26,836,262
	(11,441,723	)		(15,428,047	)		(13,524,655	)		(20,669,818	)		(5,618,445	)		(7,905,317	)
	14,302,135			11,902,134			14,417,816			12,590,152			6,905,363			5,812,734
	(40,612,295	)		(43,368,639	)		(37,942,741	)		(35,380,423	)		(18,519,775	)		(21,335,985	)
	(8,374,467	)		(14,973,299	)		(3,775,556	)		(6,348,028	)		(3,285,544	)		604,485
	(22,016,528	)		(25,215,110	)		(17,888,837	)		(21,747,345	)		(10,674,885	)		(12,542,862	)
	(28,555,783	)		(34,807,426	)		(38,624,325	)		(44,009,866	)		(9,707,559	)		(8,530,683	)
	118,971,982			(324,133,272	)		221,847,750			(476,160,092	)		55,474,639			(182,223,753	)
	378,840,491			702,973,763			364,440,135			840,600,227			222,956,608			405,180,361
$	497,812,473		$	378,840,491		$	586,287,885		$	364,440,135		$	278,431,247		$	222,956,608
	85,822,383			91,173,845			36,897,557			39,718,865			141,237,662			145,581,906
	12,110,474			11,873,989			4,681,281			5,015,242			20,416,235			21,020,728
	(17,841,764	)		(17,225,451	)		(7,785,398	)		(7,836,550	)		(26,517,040	)		(25,364,972	)
	80,091,093			85,822,383			33,793,440			36,897,557			135,136,857			141,237,662

The accompanying notes are an integral part of these financial statements.

A13

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS

For the years ended December 31, 2009 and 2008

	SUBACCOUNTS
	Prudential Government Income Portfolio						Prudential Jennison Portfolio
	01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008
OPERATIONS
Net investment income (loss)	$	2,559,583		$	3,394,589		$	(96,501	)	$	(772,069	)
Capital gains distributions received		379,590			0			0			0
Realized gain (loss) on shares redeemed		(237,763	)		(278,832	)		(22,780,468	)		(17,947,035	)
Net change in unrealized gain (loss) on investments		4,523,484			492,995			151,539,502			(176,022,532	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		7,224,894			3,608,752			128,662,533			(194,741,636	)
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		7,905,535			9,275,793			45,313,574			56,199,492
Policy loans		(2,628,283	)		(2,404,370	)		(11,584,531	)		(13,477,192	)
Policy loan repayments and interest		3,123,079			2,373,818			13,607,166			13,158,748
Surrenders, withdrawals and death benefits		(9,198,019	)		(7,098,125	)		(34,523,861	)		(40,029,781	)
Net transfers between other subaccounts or fixed rate option		1,540,800			5,423,905			(6,414,098	)		(8,745,979	)
Withdrawal and other charges		(5,379,604	)		(5,007,254	)		(22,969,179	)		(24,083,134	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		(4,636,492	)		2,563,767			(16,570,929	)		(16,977,846	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		2,588,402			6,172,519			112,091,604			(211,719,482	)
NET ASSETS
Beginning of period		106,338,276			100,165,757			315,808,606			527,528,088
End of period	$	108,926,678		$	106,338,276		$	427,900,210		$	315,808,606
Beginning units		32,797,415			32,221,732			174,340,538			181,367,996
Units issued		5,918,033			7,139,485			31,660,064			32,598,423
Units redeemed		(7,331,398	)		(6,563,802	)		(39,588,734	)		(39,625,881	)
Ending units		31,384,050			32,797,415			166,411,868			174,340,538

The accompanying notes are an integral part of these financial statements.

A14

SUBACCOUNTS (Continued)
Prudential Small Capitalization Stock Portfolio						T. Rowe Price International Stock Portfolio						Janus Aspen Janus Portfolio - Institutional Shares
01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008
$	2,246,909		$	1,207,897		$	28,547		$	23,286		$	(2,865	)	$	9,078
	19,587,379			40,583,580			0			63,965			0			0
	(9,688,725	)		(5,526,654	)		(77,221	)		(60,550	)		(239,278	)		(192,882	)
	33,117,919			(130,820,087	)		601,183			(1,043,275	)		1,846,695			(2,782,375	)
	45,263,482			(94,555,264	)		552,509			(1,016,574	)		1,604,552			(2,966,179	)
	20,868,223			23,949,935			199,184			219,093			906,313			953,496
	(6,387,804	)		(7,955,943	)		(30,153	)		(42,803	)		(94,272	)		(157,822	)
	7,269,504			6,280,800			7,578			8,563			20,304			21,351
	(19,887,433	)		(20,829,188	)		(54,676	)		(121,166	)		(84,018	)		(176,206	)
	(4,101,165	)		(5,386,179	)		21,296			(10,692	)		(23,996	)		(27,928	)
	(10,672,029	)		(12,097,343	)		(117,388	)		(126,552	)		(475,017	)		(471,251	)
	(12,910,704	)		(16,037,918	)		25,841			(73,557	)		249,314			141,640
	32,352,778			(110,593,182	)		578,350			(1,090,131	)		1,853,866			(2,824,539	)
	199,585,408			310,178,590			1,048,666			2,138,797			4,540,757			7,365,296
$	231,938,186		$	199,585,408		$	1,627,016		$	1,048,666		$	6,394,623		$	4,540,757
	76,027,275			80,929,491			1,273,890			1,324,849			4,399,958			4,276,480
	13,430,408			12,482,314			247,861			207,779			768,383			711,125
	(18,395,781	)		(17,384,530	)		(217,038	)		(258,738	)		(597,096	)		(587,647	)
	71,061,902			76,027,275			1,304,713			1,273,890			4,571,245			4,399,958

The accompanying notes are an integral part of these financial statements.

A15

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS

For the years ended December 31, 2009 and 2008

	SUBACCOUNTS
	MFS VIT Growth Series - Initial Class						American Century VP Value Fund
	01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008
OPERATIONS
Net investment income (loss)	$	(5,993	)	$	(9,511	)	$	99,010		$	43,777
Capital gains distributions received		0			0			0			307,529
Realized gain (loss) on shares redeemed		(65,482	)		(66,716	)		(159,825	)		(82,180	)
Net change in unrealized gain (loss) on investments		745,248			(1,048,500	)		429,718			(991,675	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		673,773			(1,124,727	)		368,903			(722,549	)
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		334,667			383,302			305,352			343,737
Policy loans		(94,095	)		(139,512	)		(66,333	)		(88,049	)
Policy loan repayments and interest		20,966			23,886			16,168			14,628
Surrenders, withdrawals and death benefits		(68,058	)		(120,152	)		(119,744	)		(66,439	)
Net transfers between other subaccounts or fixed rate option		(7,436	)		(35,969	)		(15,587	)		(66,012	)
Withdrawal and other charges		(187,582	)		(193,800	)		(165,279	)		(170,924	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		(1,538	)		(82,245	)		(45,423	)		(33,059	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		672,235			(1,206,972	)		323,480			(755,608	)
NET ASSETS
Beginning of period		1,831,074			3,038,046			1,946,390			2,701,998
End of period	$	2,503,309		$	1,831,074		$	2,269,870		$	1,946,390
Beginning units		1,614,163			1,666,052			1,219,313			1,232,090
Units issued		283,750			279,412			203,516			203,641
Units redeemed		(285,496	)		(331,301	)		(229,373	)		(216,418	)
Ending units		1,612,417			1,614,163			1,193,456			1,219,313

** Date subaccount was no longer available for investment

The accompanying notes are an integral part of these financial statements.

A16

SUBACCOUNTS (Continued)
Prudential SP Davis Value Portfolio						Prudential SP Small Cap Value Portfolio						Prudential SP PIMCO Total Return Portfolio
01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/4/2009**			01/01/2008 to 12/31/2008
$	8,159		$	7,720		$	13,206		$	5,581		$	160,161		$	274,513
	0			78,558			0			248,105			163,902			0
	(107,645	)		(23,346	)		(137,973	)		(63,167	)		350,519			(100,212	)
	402,399			(709,443	)		740,186			(1,021,352	)		40,609			(304,434	)
	302,913			(646,511	)		615,419			(830,833	)		715,191			(130,133	)
	69,412			92,028			59,621			107,320			111,445			79,861
	(1,586	)		(7,923	)		(4,444	)		(25,385	)		(2,188	)		(14,620	)
	1,099			394			11,513			1,754			32,837			6,334
	(24,646	)		(13,897	)		(11,682	)		(21,138	)		(68,893	)		(66,217	)
	(13,664	)		156,670			302,334			5,390			(6,303,714	)		(897,251	)
	(57,717	)		(53,621	)		(101,320	)		(63,332	)		(182,402	)		(171,407	)
	(27,102	)		173,651			256,022			4,609			(6,412,915	)		(1,063,300	)
	275,811			(472,860	)		871,441			(826,224	)		(5,697,724	)		(1,193,433	)
	1,008,850			1,481,710			1,847,018			2,673,242			5,697,724			6,891,157
$	1,284,661		$	1,008,850		$	2,718,459		$	1,847,018		$	0		$	5,697,724
	1,069,099			936,502			1,926,678			1,920,598			4,375,090			5,237,450
	431,532			218,391			472,776			155,237			257,497			648,888
	(454,673	)		(85,794	)		(211,922	)		(149,157	)		(4,632,587	)		(1,511,248	)
	1,045,958			1,069,099			2,187,532			1,926,678			0			4,375,090

The accompanying notes are an integral part of these financial statements.

A17

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS

For the years ended December 31, 2009 and 2008

	SUBACCOUNTS
	Prudential SP PIMCO High Yield Portfolio						Janus Aspen Janus Portfolio - Service Shares
	01/01/2009 to 11/13/2009**			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008
OPERATIONS
Net investment income (loss)	$	81,631		$	101,415		$	(1,506	)	$	(2,681	)
Capital gains distributions received		0			1,441			0			0
Realized gain (loss) on shares redeemed		(75,445	)		(12,081	)		(27,058	)		(7,537	)
Net change in unrealized gain (loss) on investments		436,837			(481,083	)		114,608			(192,572	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		443,023			(390,308	)		86,044			(202,790	)
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		20,445			31,649			10,849			17,122
Policy loans		(2,132	)		(9,980	)		0			0
Policy loan repayments and interest		364			212			0			251
Surrenders, withdrawals and death benefits		(1,104	)		(14,912	)		(37	)		0
Net transfers between other subaccounts or fixed rate option		(1,526,458	)		(6,493	)		(39,205	)		(327,485	)
Withdrawal and other charges		(29,326	)		(21,743	)		(7,969	)		(25,147	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		(1,538,211	)		(21,267	)		(36,362	)		(335,259	)
TOTAL INCREASE (DECREASE) IN NET ASSETS		(1,095,188	)		(411,575	)		49,682			(538,049	)
NET ASSETS
Beginning of period		1,095,188			1,506,763			273,454			811,503
End of period	$	0		$	1,095,188		$	323,136		$	273,454
Beginning units		1,002,511			1,018,359			339,441			600,362
Units issued		280,252			28,766			20,705			68,248
Units redeemed		(1,282,763	)		(44,614	)		(62,572	)		(329,169	)
Ending units		0			1,002,511			297,574			339,441

** Date subaccount was no longer available for investment

The accompanying notes are an integral part of these financial statements.

A18

SUBACCOUNTS (Continued)
Prudential SP Strategic Partners Focused Growth Portfolio						Prudential SP Mid Cap Growth Portfolio						SP Prudential U.S. Emerging Growth Portfolio
01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008
$	(5,787	)	$	(3,945	)	$	(2,725	)	$	(3,871	)	$	(6,303	)	$	(19,535	)
	0			34,124			0			112,474			0			561,566
	(34,136	)		(24,399	)		(111,091	)		(119,887	)		(670,934	)		(275,422	)
	286,637			(225,338	)		202,347			(280,106	)		1,140,515			(1,668,732	)
	246,714			(219,558	)		88,531			(291,390	)		463,278			(1,402,123	)
	26,657			56,287			18,500			20,863			47,406			246,286
	(136	)		(18,324	)		(1,187	)		(4,029	)		(4,615	)		(7,988	)
	16,068			173			380			333			10,652			1,388
	0			0			(8,001	)		(2,910	)		(1,248,805	)		(19,251	)
	356,897			22,070			617			(278,502	)		6,511			51,230
	(78,431	)		(29,965	)		(12,327	)		(15,987	)		(407,741	)		(704,588	)
	321,055			30,241			(2,018	)		(280,232	)		(1,596,592	)		(432,923	)
	567,769			(189,317	)		86,513			(571,622	)		(1,133,314	)		(1,835,046	)
	368,603			557,920			300,628			872,250			2,184,437			4,019,483
$	936,372		$	368,603		$	387,141		$	300,628		$	1,051,123		$	2,184,437
	423,174			390,783			399,006			660,966			1,826,909			2,125,202
	413,484			85,359			1,566,969			1,277,321			145,203			205,459
	(83,423	)		(52,968	)		(1,572,070	)		(1,539,281	)		(1,348,104	)		(503,752	)
	753,235			423,174			393,905			399,006			624,008			1,826,909

The accompanying notes are an integral part of these financial statements.

A19

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS

For the years ended December 31, 2009 and 2008

	SUBACCOUNTS
	Prudential SP Conservative Asset Allocation Portfolio						Prudential SP Balanced Asset Allocation Portfolio
	01/01/2009 to 11/20/2009**			01/01/2008 to 12/31/2008			01/01/2009 to 11/13/2009**			01/01/2008 to 12/31/2008
OPERATIONS
Net investment income (loss)	$	24,850		$	8,202		$	18,013		$	12,224
Capital gains distributions received		0			20,664			5,952			52,086
Realized gain (loss) on shares redeemed		(13,458	)		(7,378	)		(34,597	)		(11,355	)
Net change in unrealized gain (loss) on investments		117,648			(182,412	)		159,564			(284,509	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		129,040			(160,924	)		148,932			(231,554	)
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		64,025			61,981			69,039			59,938
Policy loans		(785	)		(783	)		(2,193	)		(24,078	)
Policy loan repayments and interest		397			274			1,314			3,643
Surrenders, withdrawals and death benefits		(170,699	)		0			(38,588	)		(3,548	)
Net transfers between other subaccounts or fixed rate option		(642,237	)		432,484			(732,762	)		55,257
Withdrawal and other charges		(72,659	)		(55,348	)		(25,580	)		(27,943	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		(821,958	)		438,608			(728,770	)		63,269
TOTAL INCREASE (DECREASE) IN NET ASSETS		(692,918	)		277,684			(579,838	)		(168,285	)
NET ASSETS
Beginning of period		692,918			415,234			579,838			748,123
End of period	$	0		$	692,918		$	0		$	579,838
Beginning units		603,180			285,028			532,492			487,672
Units issued		248,025			361,484			176,789			86,117
Units redeemed		(851,205	)		(43,332	)		(709,281	)		(41,297	)
Ending units		0			603,180			0			532,492

** Date subaccount was no longer available for investment

The accompanying notes are an integral part of these financial statements.

A20

SUBACCOUNTS (Continued)
Prudential SP Growth Asset Allocation Portfolio						Prudential SP Aggressive Growth Asset Allocation Portfolio						Prudential SP International Growth Portfolio
01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 11/13/2009**			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008
$	17,298		$	13,808		$	6,752		$	2,963		$	30,011		$	24,868
	17,398			143,986			0			151,131			0			689,888
	(102,073	)		(32,433	)		(146,293	)		(15,111	)		(599,543	)		(1,128,406	)
	346,921			(753,855	)		387,603			(880,697	)		1,286,002			(1,981,466	)
	279,544			(628,494	)		248,062			(741,714	)		716,470			(2,395,116	)
	93,743			112,741			13,542			19,787			64,671			87,439
	(1,931	)		(817	)		(362	)		(4,077	)		(3,596	)		(19,234	)
	415			371			205			369			17,688			3,011
	(24,440	)		(6,163	)		(5,040	)		(8,250	)		(22,097	)		(37,330	)
	(15,951	)		72,194			(1,231,065	)		11,432			(231,737	)		410,273
	(55,562	)		(50,382	)		(17,469	)		(19,723	)		(130,663	)		(155,825	)
	(3,726	)		127,944			(1,240,189	)		(462	)		(305,734	)		288,334
	275,818			(500,550	)		(992,127	)		(742,176	)		410,736			(2,106,782	)
	1,076,437			1,576,987			992,127			1,734,303			2,399,800			4,506,582
$	1,352,255		$	1,076,437		$	0		$	992,127		$	2,810,536		$	2,399,800
	1,070,883			989,840			1,077,056			1,079,123			2,405,251			2,225,008
	172,647			158,344			16,492			30,242			176,540			941,400
	(169,036	)		(77,301	)		(1,093,548	)		(32,309	)		(510,332	)		(761,157	)
	1,074,494			1,070,883			0			1,077,056			2,071,459			2,405,251

The accompanying notes are an integral part of these financial statements.

A21

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS

For the years ended December 31, 2009 and 2008

	SUBACCOUNTS
	Prudential SP International Value Portfolio						AST Marsico Capital Growth Portfolio
	01/01/2009 to 12/31/2009			01/01/2008 to 12/31/2008			01/01/2009 to 12/31/2009			05/01/2008* to 12/31/2008
OPERATIONS
Net investment income (loss)	$	75,646		$	88,906		$	(482	)	$	(607	)
Capital gains distributions received		0			730,993			0			7,325
Realized gain (loss) on shares redeemed		(242,268	)		(857,322	)		(70,890	)		(12,071	)
Net change in unrealized gain (loss) on investments		1,119,476			(2,184,774	)		107,001			(115,215	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		952,854			(2,222,197	)		35,629			(120,568	)
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		116,083			104,322			11,923			7,428
Policy loans		(3,284	)		(22,934	)		(3,235	)		(2,195	)
Policy loan repayments and interest		49,126			3,535			875			640
Surrenders, withdrawals and death benefits		(29,797	)		(117,077	)		(201	)		0
Net transfers between other subaccounts or fixed rate option		308,727			(681,428	)		41,446			311,502
Withdrawal and other charges		(219,465	)		(179,066	)		(14,167	)		(14,128	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		221,390			(892,648	)		36,641			303,247
TOTAL INCREASE (DECREASE) IN NET ASSETS		1,174,244			(3,114,845	)		72,270			182,679
NET ASSETS
Beginning of period		2,701,039			5,815,884			182,679			0
End of period	$	3,875,283		$	2,701,039		$	254,949		$	182,679
Beginning units		2,418,804			2,888,544			29,985			0
Units issued		504,478			646,617			19,145			37,444
Units redeemed		(278,355	)		(1,116,357	)		(16,603	)		(7,459	)
Ending units		2,644,927			2,418,804			32,527			29,985

* Date subaccount became available for investment

The accompanying notes are an integral part of these financial statements.

A22

SUBACCOUNTS (Continued)
AST T. Rowe Price Large-Cap Growth Portfolio						AST Large-Cap Value Portfolio						AST Small-Cap Growth Portfolio
01/01/2009 to 12/31/2009			05/01/2008* to 12/31/2008			01/01/2009 to 12/31/2009			05/01/2008* to 12/31/2008			01/01/2009 to 12/31/2009			05/01/2008* to 12/31/2008
$	(2,255	)	$	(821	)	$	8,429		$	6,595		$	(8,169	)	$	(6,588	)
	0			0			0			36,453			0			0
	(21,807	)		(3,151	)		(203,482	)		(217,547	)		(14,850	)		(13,461	)
	137,203			(88,956	)		258,237			(166,174	)		325,287			(399,582	)
	113,141			(92,928	)		63,184			(340,673	)		302,268			(419,631	)
	15,273			11,222			11,501			44,609			13,177			36,352
	(30	)		(946	)		(487	)		(14,887	)		(2,672	)		(10,930	)
	85			24			839			102			904			247
	(4,147	)		(3,151	)		(9,843	)		(924	)		(1,915	)		(7,023	)
	164,441			242,819			1,290			764,534			89,352			1,289,563
	(8,824	)		(4,792	)		(26,100	)		(16,645	)		(29,404	)		(17,617	)
	166,798			245,176			(22,800	)		776,789			69,442			1,290,592
	279,939			152,248			40,384			436,116			371,710			870,961
	152,248			0			436,116			0			870,961			0
$	432,187		$	152,248		$	476,500		$	436,116		$	1,242,671		$	870,961
	24,333			0			71,047			0			128,368			0
	94,635			25,847			111,900			183,072			14,399			138,197
	(73,544	)		(1,514	)		(117,395	)		(112,025	)		(4,783	)		(9,829	)
	45,424			24,333			65,552			71,047			137,984			128,368

The accompanying notes are an integral part of these financial statements.

A23

FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

STATEMENT OF CHANGES IN NET ASSETS

For the years ended December 31, 2009 and 2008

	SUBACCOUNTS
	AST PIMCO Total Return Bond Portfolio			AST Aggressive Asset Allocation Portfolio			AST Balanced Asset Allocation Portfolio			AST Preservation Asset Allocation Portfolio
	12/04/2009* to 12/31/2009			11/13/2009* to 12/31/2009			11/13/2009* to 12/31/2009			11/20/2009* to 12/31/2009
OPERATIONS
Net investment income (loss)	$	(4,128	)	$	(1,321	)	$	(813	)	$	(421	)
Capital gains distributions received		0			0			0			0
Realized gain (loss) on shares redeemed		(7	)		(1	)		(17	)		28
Net change in unrealized gain (loss) on investments		(16,191	)		17,059			6,724			1,875
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM OPERATIONS		(20,326	)		15,737			5,894			1,482
CONTRACT OWNER TRANSACTIONS
Contract owner net payments		1,226			933			7,584			1,916
Policy loans		(116	)		(28	)		(12	)		(43	)
Policy loan repayments and interest		92			22			32			81
Surrenders, withdrawals and death benefits		(22,753	)		0			0			0
Net transfers between other subaccounts or fixed rate option		6,367,004			1,149,757			830,133			509,382
Withdrawal and other charges		(10,554	)		(2,161	)		(3,346	)		(6,860	)
NET INCREASE (DECREASE) IN NET ASSETS RESULTING FROM CONTRACT OWNER TRANSACTIONS		6,334,899			1,148,523			834,391			504,476
TOTAL INCREASE (DECREASE) IN NET ASSETS		6,314,573			1,164,260			840,285			505,958
NET ASSETS
Beginning of period		0			0			0			0
End of period	$	6,314,573		$	1,164,260		$	840,285		$	505,958
Beginning units		0			0			0			0
Units issued		640,067			114,759			83,349			51,186
Units redeemed		(4,405	)		(759	)		(333	)		(688	)
Ending units		635,662			114,000			83,016			50,498

* Date subaccount became available for investment

The accompanying notes are an integral part of these financial statements.

A24

NOTES TO FINANCIAL STATEMENTS OF

THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

December 31, 2009

Note 1: General

The Prudential Variable Appreciable Account (the “Account”) of The Prudential Insurance Company of America (“Prudential”), which is a wholly owned subsidiary of Prudential Financial, Inc. (“PFI”), was established on August 11, 1987 by a resolution of Prudential’s Board of Directors in conformity with insurance laws of the State of New Jersey. The assets of the Account are segregated from Prudential’s other assets. Proceeds from the purchases of Prudential Variable Appreciable Life (“PVAL”), Prudential Survivorship Preferred (“SVUL”) and Prudential Variable Universal Life (“VUL”) contracts are invested in the Account.

The Account is registered under the Investment Company act of 1940, as amended, as a unit investment trust. The Account is a funding vehicle for individual variable life insurance contracts. There are thirty-nine subaccounts within the Account. Each contract offers the option to invest in various subaccounts, each of which invests in either a corresponding portfolio of The Prudential Series Fund (the “Series Fund”) or one of the non-Prudential administered funds (collectively, the “portfolios”). Options available to The Prudential Variable Appreciable Account contracts which invest in a corresponding portfolio of the Series Fund are: Prudential Money Market Portfolio, Prudential Diversified Bond Portfolio, Prudential Equity Portfolio, Prudential Flexible Managed Portfolio, Prudential Conservative Balanced Portfolio, Prudential High Yield Bond Portfolio, Prudential Stock Index Portfolio, Prudential Value Portfolio, Prudential Natural Resources Portfolio, Prudential Global Portfolio, Prudential Government Income Portfolio, Prudential Jennison Portfolio, Prudential Small Capitalization Stock Portfolio, T. Rowe Price International Stock Portfolio, Janus Aspen Janus Portfolio - Institutional Shares, MFS VIT Growth Series - Initial Class, American Century VP Value Fund, Prudential SP Davis Value Portfolio, Prudential SP Small Cap Value Portfolio, Prudential SP PIMCO Total Return Portfolio, Prudential SP PIMCO High Yield Portfolio, Janus Aspen Janus Portfolio - Service Shares, Prudential SP Strategic Partners Focused Growth Portfolio, Prudential SP Mid Cap Growth Portfolio, SP Prudential U.S. Emerging Growth Portfolio, Prudential SP Conservative Asset Allocation Portfolio, Prudential SP Balanced Asset Allocation Portfolio, Prudential SP Growth Asset Allocation Portfolio, Prudential SP Aggressive Growth Asset Allocation Portfolio, Prudential SP International Growth Portfolio, Prudential SP International Value Portfolio, AST Marsico Capital Growth Portfolio, AST T. Rowe Price Large-Cap Growth Portfolio, AST Large-Cap Value Portfolio, AST Small-Cap Growth Portfolio, AST PIMCO Total Return Bond Portfolio, AST Aggressive Asset Allocation Portfolio, AST Balanced Asset Allocation Portfolio, AST Preservation Asset Allocation Portfolio.

The Series Fund is a diversified open-end management investment company, and is managed by an affiliate of Prudential.

The following table sets forth the dates on which mergers took place in the Account along with relevant information pertaining to each merger. The transfers from the old subaccounts to the new subaccounts are reflected in the Statement of Changes in Net Assets for the year ended December 31, 2009 as net transfers between subaccounts. The transfers occurred as follows:

November 13, 2009	Removed Portfolio			Surviving Portfolio
	Prudential SP Aggressive Growth Asset Allocation Portfolio			AST Aggressive Asset Allocation Portfolio
Shares			165,503			143,149
Value		$	6.98		$	8.07
Net assets before merger		$	1,155,209		$	0
Net assets after merger		$	0		$	1,155,209

A25

Note 1: General (Continued)

November 13, 2009	Removed Portfolio			Surviving Portfolio
	Prudential SP Balanced Asset Allocation Portfolio			AST Balanced Asset Allocation Portfolio
Shares			90,626			83,852
Value		$	9.16		$	9.90
Net assets before merger		$	830,133		$	0
Net assets after merger		$	0		$	830,133

	Prudential SP PIMCO High Yield Portfolio			Prudential High Yield Bond Portfolio
Shares			210,925			24,661,703
Value		$	8.73		$	4.76
Net assets before merger		$	1,841,375		$	115,548,331
Net assets after merger		$	0		$	117,389,706

November 20, 2009	Removed Portfolio			Surviving Portfolio
	Prudential SP Conservative Asset Allocation Portfolio			AST Preservation Asset Allocation Portfolio
Shares			49,744			47,428
Value		$	10.24		$	10.74
Net assets before merger		$	509,382		$	0
Net assets after merger		$	0		$	509,382

December 4, 2009	Removed Portfolio			Surviving Portfolio
	Prudential SP PIMCO Total Return Portfolio			AST PIMCO Total Return Bond Portfolio
Shares			541,380			543,688
Value		$	11.78		$	11.73
Net assets before merger		$	6,377,457		$	0
Net assets after merger		$	0		$	6,377,457

Each of the variable investment options of the Account indirectly bears exposure to the market, credit, and liquidity risks of the portfolio in which it invests. These financial statements should be read in conjunction with the financial statements and footnotes of the underlying portfolios of mutual funds. Additional information on these portfolios of mutual funds is available upon request to the appropriate companies.

Note 2: Significant Accounting Policies

The accompanying financial statements are prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and disclosures. Actual results could differ from those estimates.

In June 2009, the FASB issued authoritative guidance for the FASB’s Accounting Standards Codification ™ as the source of authoritative U.S. GAAP. The Codification is not intended to change U.S. GAAP but is a new structure which organizes accounting pronouncements by accounting topic. This guidance is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Account’s adoption of this guidance effective with the interim reporting period ending September 30, 2009 impacts the way the Company references U.S. GAAP standards in the financial statements.

A26

Note 2: Significant Accounting Policies (Continued)

In April 2009, the FASB revised the authoritative guidance for fair value measurements and disclosures to provide guidance on (1) estimating the fair value of an asset or liability if there was a significant decrease in the volume and level of trading activity for these assets or liabilities, and (2) identifying transactions that are not orderly. Further, this new guidance requires additional disclosures about fair value measurements in interim and annual periods. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009. The Account’s early adoption of this guidance effective January 1, 2009 did not have a material effect on the Account’s financial statements.

Investments — The investments in shares of the portfolios are stated at the net asset value of the respective portfolio, whose investment securities are stated at value.

Security Transactions — Realized gains and losses on security transactions are determined based upon an average cost. Purchase and sale transactions are recorded as of the trade date of the security being purchased or sold.

Dividend and Distributions Received — Dividend and capital gain distributions received are reinvested in additional shares of the portfolios and are recorded on the ex distribution date.

Note 3: Fair Value

The guidance defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an ordinary transaction between market participants on the measurement date. The new guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value, and identifies three levels of inputs that may be used to measure fair value:

Level 1 – Quotes prices for identical instruments in active markets. Level 1 fair values generally are supported by market transactions that occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2 – Observable inputs other than Level 1 prices, such as quotes prices for similar instruments, quotes prices in market that are not active, and inputs to model-derived valuations that are not directly observable or can be corroborated by observable market data.

Level 3 – Unobservable inputs supported by little or no market activity and often requiring significant judgment or estimation, such as an entity’s own assumptions about the cash flows or other significant components of value that market participants would use in pricing the asset or liability.

All investment assets of each subaccount are classified as Level 1. The Account invests in open-ended mutual funds, available to contract holders of variable life insurance policies. Contract holders may, without restriction, transact at the daily Net Asset Value(s) (“NAV”) of the mutual funds. The NAV represents the daily per share value of the portfolio of investments of the mutual funds, at which sufficient volumes of transactions occur.

All assets of the account are classified as Level 1. No reconciliation of Level 3 assets and change in unrealized gains (losses) for Level 3 assets held as of December 31, 2009 are presented.

Note 4: Taxes

Prudential is taxed as a “life insurance company” as defined by the Internal Revenue Code. The results of operations of the Account form a part of PFI’s consolidated federal tax return. Under current federal law, no federal income taxes are payable by the Account. As such, no provision for tax liability has been recorded in these financial statements. Prudential management will review periodically the status of the policy in the event of changes in the tax law. A charge may be made in future years for any federal income taxes that would be attributable to the contracts.

A27

Note 5: Purchases and Sales of Investments

The aggregate costs of purchases and proceeds from sales, excluding distributions received and invested, of investments in the portfolios for the year ended December 31, 2009 were as follows:

	Purchases		Sales
Prudential Money Market Portfolio	$	29,123,404	$	(41,746,867	)
Prudential Diversified Bond Portfolio	$	9,203,593	$	(14,442,657	)
Prudential Equity Portfolio	$	19,182,091	$	(88,156,970	)
Prudential Flexible Managed Portfolio	$	10,466,714	$	(73,538,439	)
Prudential Conservative Balanced Portfolio	$	8,183,885	$	(65,136,250	)
Prudential High Yield Bond Portfolio	$	7,144,621	$	(7,754,255	)
Prudential Stock Index Portfolio	$	17,938,515	$	(65,131,798	)
Prudential Value Portfolio	$	7,705,148	$	(39,246,638	)
Prudential Natural Resources Portfolio	$	5,622,706	$	(47,621,761	)
Prudential Global Portfolio	$	5,801,508	$	(17,091,203	)
Prudential Government Income Portfolio	$	4,944,529	$	(10,354,688	)
Prudential Jennison Portfolio	$	11,486,287	$	(30,570,565	)
Prudential Small Capitalization Stock Portfolio	$	6,020,717	$	(20,293,713	)
T. Rowe Price International Stock Portfolio	$	145,457	$	(127,313	)
Janus Aspen Janus Portfolio - Institutional Shares	$	701,047	$	(482,467	)
MFS VIT Growth Series - Initial Class	$	184,243	$	(198,201	)
American Century VP Value Fund	$	179,173	$	(236,322	)
Prudential SP Davis Value Portfolio	$	466,732	$	(502,648	)
Prudential SP Small Cap Value Portfolio	$	455,829	$	(218,140	)
Prudential SP PIMCO Total Return Portfolio	$	354,840	$	(6,815,565	)
Prudential SP PIMCO High Yield Portfolio	$	387,733	$	(1,936,211	)
Janus Aspen Janus Portfolio - Service Shares	$	17,460	$	(56,372	)
Prudential SP Strategic Partners Focused Growth Portfolio	$	417,556	$	(102,288	)
Prudential SP Mid Cap Growth Portfolio	$	1,252,060	$	(1,256,802	)
SP Prudential U.S. Emerging Growth Portfolio	$	289,306	$	(1,898,168	)
Prudential SP Conservative Asset Allocation Portfolio	$	285,575	$	(1,112,208	)
Prudential SP Balanced Asset Allocation Portfolio	$	192,683	$	(925,850	)
Prudential SP Growth Asset Allocation Portfolio	$	163,482	$	(176,513	)
Prudential SP Aggressive Growth Asset Allocation Portfolio	$	11,737	$	(1,259,546	)
Prudential SP International Growth Portfolio	$	198,696	$	(525,721	)
Prudential SP International Value Portfolio	$	638,963	$	(445,930	)
AST Marsico Capital Growth Portfolio	$	131,263	$	(96,012	)
AST T. Rowe Price Large-Cap Growth Portfolio	$	827,486	$	(662,943	)
AST Large-Cap Value Portfolio	$	610,508	$	(636,933	)
AST Small-Cap Growth Portfolio	$	99,757	$	(38,988	)
AST PIMCO Total Return Bond Portfolio	$	6,378,056	$	(47,286	)
AST Aggressive Asset Allocation Portfolio	$	1,155,981	$	(8,779	)
AST Balanced Asset Allocation Portfolio	$	837,239	$	(3,662	)
AST Preservation Asset Allocation Portfolio	$	510,755	$	(6,700	)

A28

Note 6: Related Party Transactions

PFI and its affiliates perform various services on behalf of the Series Funds in which the Account invests and may receive fees for the services performed. These services include, among other things, investment management, subadvisory, shareholder communications, preparation, postage, fund transfer agency and various other record keeping, administrative, and customer service functions.

The Series Funds have management agreements with Prudential Investment LLC (“PI”) and AST Investment Services, Inc, indirect, wholly-owned subsidiaries of PFI (together the “Investment Managers”). Pursuant to these agreements, the Investment Managers have responsibility for all investment advisory services and supervise the subadvisors’ performance of such services. The Investment Managers entered into subadvisory agreements with several subadvisors, including Prudential Investment Management, Inc. and Jennison Associates LLC, which are indirect, wholly-owned subsidiaries of PFI.

The Prudential Series Fund has a distribution agreement with Prudential Investment Management Services LLC (“PIMS”), an indirect, wholly-owned subsidiary of PFI, which acts as the distributor of the Class I and Class II shares of the Series Fund. No distribution or service fees are paid to PIMS as distributor of the Class I shares of the Series Fund.

The Investment Managers have agreed to reimburse certain portfolios of the Series Funds the portion of the management fee for that Portfolio equal to the amount that the aggregate annual ordinary operating expenses (excluding interest, taxes, brokerage commissions, and acquired fund expenses, as applicable) exceeds various agreed upon percentages of the portfolio’s average daily net assets.

Prudential Mutual Fund Services LLC, an affiliate of the Investment Managers and an indirect, wholly-owned subsidiary of PFI, serves as the transfer agent of the Series Funds.

A29

Note 7: Financial Highlights

Prudential sells a number of variable life products that are funded by the Account. These products have unique combinations of features and fees that are charged against the contract owner’s account balance. Differences in the fee structures result in a variety of unit values, expense ratios and total returns.

The following table was developed by determining which products offered by Prudential and funded by the Account have the lowest and highest expense ratio. Only product designs within each subaccount that had units outstanding throughout the respective periods were considered when determining the lowest and highest expense ratio. The summary may not reflect the minimum and maximum contract charges offered by Prudential as contract owners may not have selected all available and applicable contract options.

	At year ended							For year ended
	Units (000s)	Unit Value Lowest – Highest					Net Assets (000s)	Investment Income Ratio*	Expense Ratio** Lowest – Highest	Total Return*** Lowest – Highest
	Prudential Money Market Portfolio
December 31, 2009	76,092	$	1.44106	to	$	2.18425	157,487	0.40%	0.60% to 0.90%	–0.50%	to	–0.19%
December 31, 2008	81,376	$	1.44687	to	$	2.18847	169,450	2.60%	0.60% to 0.90%	1.73%	to	2.04%
December 31, 2007	78,737	$	1.41813	to	$	2.14468	161,047	4.93%	0.60% to 0.90%	4.11%	to	4.44%
December 31, 2006	74,752	$	1.35814	to	$	2.05352	144,870	4.64%	0.60% to 0.90%	3.82%	to	4.13%
December 31, 2005	75,720	$	1.30433	to	$	1.97221	141,384	2.88%	0.60% to 0.90%	1.98%	to	2.29%
	Prudential Diversified Bond Portfolio
December 31, 2009	54,663	$	2.02819	to	$	4.09439	210,943	4.72%	0.60% to 0.90%	19.43%	to	19.79%
December 31, 2008	55,976	$	1.69315	to	$	3.41803	180,269	5.19%	0.60% to 0.90%	–4.32%	to	–4.03%
December 31, 2007	57,024	$	1.76433	to	$	3.56167	191,053	5.06%	0.60% to 0.90%	4.76%	to	5.07%
December 31, 2006	59,776	$	1.67919	to	$	3.38976	190,309	4.91%	0.60% to 0.90%	4.04%	to	4.36%
December 31, 2005	61,430	$	1.60922	to	$	3.24819	187,655	5.32%	0.60% to 0.90%	2.36%	to	2.67%
	Prudential Equity Portfolio
December 31, 2009	228,516	$	1.73088	to	$	5.93680	1,282,522	1.60%	0.60% to 0.90%	36.94%	to	37.35%
December 31, 2008	242,180	$	1.26021	to	$	4.32262	992,251	1.44%	0.60% to 0.90%	–38.71%	to	–38.53%
December 31, 2007	254,580	$	2.05004	to	$	7.03187	1,699,457	1.07%	0.60% to 0.90%	8.34%	to	8.67%
December 31, 2006	265,037	$	1.88658	to	$	6.47089	1,630,000	1.10%	0.60% to 0.90%	11.56%	to	11.90%
December 31, 2005	275,134	$	1.68604	to	$	5.78274	1,514,538	0.99%	0.60% to 0.90%	10.48%	to	10.81%
	Prudential Flexible Managed Portfolio
December 31, 2009	243,745	$	1.61803	to	$	4.24151	988,328	3.48%	0.60% to 0.90%	18.88%	to	19.24%
December 31, 2008	259,855	$	1.35704	to	$	3.55724	885,349	2.96%	0.60% to 0.90%	–25.49%	to	–25.27%
December 31, 2007	270,315	$	1.81592	to	$	4.76007	1,234,892	2.37%	0.60% to 0.90%	5.40%	to	5.72%
December 31, 2006	281,637	$	1.71765	to	$	4.50247	1,215,560	1.96%	0.60% to 0.90%	11.17%	to	11.50%
December 31, 2005	291,077	$	1.54053	to	$	4.03794	1,129,100	1.88%	0.60% to 0.90%	3.23%	to	3.54%
	Prudential Conservative Balanced Portfolio
December 31, 2009	241,711	$	1.64005	to	$	3.68531	853,332	3.76%	0.60% to 0.90%	18.94%	to	19.30%
December 31, 2008	258,075	$	1.37489	to	$	3.08922	765,814	3.43%	0.60% to 0.90%	–22.11%	to	–21.87%
December 31, 2007	269,072	$	1.75988	to	$	3.95410	1,023,369	2.95%	0.60% to 0.90%	5.17%	to	5.49%
December 31, 2006	279,923	$	1.66835	to	$	3.74835	1,009,556	2.53%	0.60% to 0.90%	9.45%	to	9.78%
December 31, 2005	291,401	$	1.51981	to	$	3.41452	959,478	2.33%	0.60% to 0.90%	2.51%	to	2.82%
	Prudential High Yield Bond Portfolio
December 31, 2009	33,720	$	1.85600	to	$	3.88374	121,072	9.47%	0.60% to 0.90%	45.85%	to	46.29%
December 31, 2008	33,217	$	1.26883	to	$	2.65488	83,041	8.70%	0.60% to 0.90%	–22.97%	to	–22.74%
December 31, 2007	35,121	$	1.64253	to	$	3.43647	113,772	7.11%	0.60% to 0.90%	1.71%	to	2.00%
December 31, 2006	36,309	$	1.61051	to	$	3.36918	115,600	7.85%	0.60% to 0.90%	9.26%	to	9.61%
December 31, 2005	37,335	$	1.46934	to	$	3.07393	108,519	6.88%	0.60% to 0.90%	2.48%	to	2.82%

A30

Note 7: Financial Highlights (Continued)

	At year ended							For year ended
	Units (000s)	Unit Value Lowest – Highest					Net Assets (000s)	Investment Income Ratio*	Expense Ratio** Lowest – Highest	Total Return*** Lowest – Highest
	Prudential Stock Index Portfolio
December 31, 2009	167,908	$	1.69594	to	$	5.65762	892,821	2.81%	0.60% to 0.90%	24.95%	to	25.32%
December 31, 2008	178,099	$	1.35329	to	$	4.51451	751,970	2.25%	0.60% to 0.90%	–37.50%	to	–37.32%
December 31, 2007	182,659	$	2.15890	to	$	7.20200	1,226,725	1.60%	0.60% to 0.90%	4.16%	to	4.47%
December 31, 2006	194,210	$	2.06659	to	$	6.89400	1,243,463	1.64%	0.60% to 0.90%	14.52%	to	14.86%
December 31, 2005	200,260	$	1.79921	to	$	6.00224	1,121,090	1.56%	0.60% to 0.90%	3.61%	to	3.92%
	Prudential Value Portfolio
December 31, 2009	80,091	$	2.21412	to	$	6.64126	497,812	2.06%	0.60% to 0.90%	40.66%	to	41.08%
December 31, 2008	85,822	$	1.56943	to	$	4.70735	378,840	1.86%	0.60% to 0.90%	–42.81%	to	–42.64%
December 31, 2007	91,174	$	2.73606	to	$	8.20645	702,974	1.40%	0.60% to 0.90%	2.26%	to	2.57%
December 31, 2006	95,658	$	2.66742	to	$	8.00071	718,647	1.48%	0.60% to 0.90%	18.87%	to	19.23%
December 31, 2005	96,637	$	2.23726	to	$	6.71072	614,563	1.40%	0.60% to 0.90%	15.62%	to	15.97%
	Prudential Natural Resources Portfolio
December 31, 2009	33,793	$	7.33430	to	$	18.00633	586,288	0.72%	0.60% to 0.90%	75.52%	to	76.05%
December 31, 2008	36,898	$	4.17855	to	$	10.22806	364,440	0.78%	0.60% to 0.90%	–53.42%	to	–53.28%
December 31, 2007	39,719	$	8.97121	to	$	21.89377	840,600	0.63%	0.60% to 0.90%	46.97%	to	47.41%
December 31, 2006	41,386	$	6.10429	to	$	14.85267	594,588	1.88%	0.60% to 0.90%	21.11%	to	21.47%
December 31, 2005	42,521	$	5.04033	to	$	12.22757	503,399	0.00%	0.60% to 0.90%	54.52%	to	54.98%
	Prudential Global Portfolio
December 31, 2009	135,137	$	1.60977	to	$	2.09283	278,431	2.88%	0.60% to 0.90%	30.22%	to	30.61%
December 31, 2008	141,238	$	1.23256	to	$	1.60237	222,957	1.80%	0.60% to 0.90%	–43.43%	to	–43.26%
December 31, 2007	145,582	$	2.17237	to	$	2.82411	405,180	1.12%	0.60% to 0.90%	9.49%	to	9.82%
December 31, 2006	144,223	$	1.97822	to	$	2.57168	365,827	0.63%	0.60% to 0.90%	18.58%	to	18.94%
December 31, 2005	142,096	$	1.66328	to	$	2.16226	303,278	0.61%	0.60% to 0.90%	15.03%	to	15.37%
	Prudential Government Income Portfolio
December 31, 2009	31,384	$	1.92384	to	$	3.56518	108,927	3.09%	0.60% to 0.90%	6.75%	to	7.07%
December 31, 2008	32,797	$	1.80202	to	$	3.32980	106,338	4.02%	0.60% to 0.90%	3.37%	to	3.68%
December 31, 2007	32,222	$	1.74314	to	$	3.21159	100,166	4.45%	0.60% to 0.90%	4.75%	to	5.06%
December 31, 2006	33,573	$	1.66408	to	$	3.05682	99,549	4.87%	0.60% to 0.90%	2.82%	to	3.12%
December 31, 2005	35,758	$	1.61851	to	$	2.96433	102,669	4.60%	0.60% to 0.90%	1.60%	to	1.90%
	Prudential Jennison Portfolio
December 31, 2009	166,412	$	1.83360	to	$	2.64268	427,900	0.67%	0.60% to 0.90%	41.76%	to	42.18%
December 31, 2008	174,341	$	1.28966	to	$	1.85874	315,809	0.52%	0.60% to 0.90%	–37.84%	to	–37.65%
December 31, 2007	181,368	$	2.06863	to	$	2.98128	527,528	0.30%	0.60% to 0.90%	11.00%	to	11.33%
December 31, 2006	190,683	$	1.85818	to	$	2.67788	498,612	0.30%	0.60% to 0.90%	0.88%	to	1.18%
December 31, 2005	197,457	$	1.83649	to	$	2.64664	510,806	0.10%	0.60% to 0.90%	13.54%	to	13.88%
	Prudential Small Capitalization Stock Portfolio
December 31, 2009	71,062	$	2.80376	to	$	3.32627	231,938	1.84%	0.60% to 0.90%	24.07%	to	24.44%
December 31, 2008	76,027	$	2.25989	to	$	2.67299	199,585	1.15%	0.60% to 0.90%	–31.65%	to	–31.45%
December 31, 2007	80,929	$	3.30649	to	$	3.89928	310,179	0.59%	0.60% to 0.90%	–1.42%	to	–1.13%
December 31, 2006	85,348	$	3.35417	to	$	3.94365	330,940	0.59%	0.60% to 0.90%	13.65%	to	13.99%
December 31, 2005	88,351	$	2.95144	to	$	3.45969	300,796	0.61%	0.60% to 0.90%	6.31%	to	6.62%
	T. Rowe Price International Stock Portfolio
December 31, 2009	1,305	$	1.24703	to	$	1.24703	1,627	2.81%	0.60% to 0.60%	51.49%	to	51.49%
December 31, 2008	1,274	$	0.82320	to	$	0.82320	1,049	2.02%	0.60% to 0.60%	–49.01%	to	–49.01%
December 31, 2007	1,325	$	1.61437	to	$	1.61437	2,139	1.40%	0.60% to 0.60%	12.36%	to	12.36%
December 31, 2006	1,379	$	1.43677	to	$	1.43677	1,982	1.22%	0.60% to 0.60%	18.38%	to	18.38%
December 31, 2005	1,364	$	1.21372	to	$	1.21372	1,656	1.69%	0.60% to 0.60%	15.35%	to	15.35%

A31

Note 7: Financial Highlights (Continued)

	At year ended							For year ended
	Units (000s)	Unit Value Lowest – Highest					Net Assets (000s)	Investment Income Ratio*	Expense Ratio** Lowest – Highest	Total Return*** Lowest – Highest
	Janus Aspen Janus Portfolio – Institutional Shares
December 31, 2009	4,571	$	1.39888	to	$	1.39888	6,395	0.54%	0.60% to 0.60%	35.55%	to	35.55%
December 31, 2008	4,400	$	1.03200	to	$	1.03200	4,541	0.75%	0.60% to 0.60%	–40.08%	to	–40.08%
December 31, 2007	4,276	$	1.72228	to	$	1.72228	7,365	0.73%	0.60% to 0.60%	14.40%	to	14.40%
December 31, 2006	4,176	$	1.50548	to	$	1.50548	6,287	0.50%	0.60% to 0.60%	10.72%	to	10.72%
December 31, 2005	4,069	$	1.35970	to	$	1.35970	5,533	0.35%	0.60% to 0.60%	3.66%	to	3.66%
	MFS VIT Growth Series – Initial Class
December 31, 2009	1,612	$	1.55252	to	$	1.55252	2,503	0.31%	0.60% to 0.60%	36.86%	to	36.86%
December 31, 2008	1,614	$	1.13438	to	$	1.13438	1,831	0.23%	0.60% to 0.60%	–37.79%	to	–37.79%
December 31, 2007	1,666	$	1.82350	to	$	1.82350	3,038	0.00%	0.60% to 0.60%	20.45%	to	20.45%
December 31, 2006	1,716	$	1.51395	to	$	1.51395	2,598	0.00%	0.60% to 0.60%	7.25%	to	7.25%
December 31, 2005	1,692	$	1.41158	to	$	1.41158	2,389	0.00%	0.60% to 0.60%	8.54%	to	8.54%
	American Century VP Value Fund
December 31, 2009	1,193	$	1.90193	to	$	1.90193	2,270	5.65%	0.60% to 0.60%	19.15%	to	19.15%
December 31, 2008	1,219	$	1.59630	to	$	1.59630	1,946	2.45%	0.60% to 0.60%	–27.21%	to	–27.21%
December 31, 2007	1,232	$	2.19302	to	$	2.19302	2,702	1.55%	0.60% to 0.60%	–5.71%	to	–5.71%
December 31, 2006	1,209	$	2.32585	to	$	2.32585	2,811	1.35%	0.60% to 0.60%	17.95%	to	17.95%
December 31, 2005	1,220	$	1.97192	to	$	1.97192	2,405	0.86%	0.60% to 0.60%	4.41%	to	4.41%
	Prudential SP Davis Value Portfolio
December 31, 2009	1,046	$	1.22115	to	$	1.24931	1,285	1.59%	0.60% to 0.90%	30.10%	to	30.49%
December 31, 2008	1,069	$	0.93864	to	$	0.95743	1,009	1.41%	0.60% to 0.90%	–40.42%	to	–40.24%
December 31, 2007	937	$	1.57535	to	$	1.60214	1,482	0.79%	0.60% to 0.90%	3.65%	to	3.95%
December 31, 2006	932	$	1.51992	to	$	1.54125	1,420	1.87%	0.60% to 0.90%	14.00%	to	14.34%
December 31, 2005	3,907	$	1.33326	to	$	1.34795	5,211	1.01%	0.60% to 0.90%	8.54%	to	8.87%
	Prudential SP Small Cap Value Portfolio
December 31, 2009	2,188	$	1.24033	to	$	1.26947	2,718	1.49%	0.60% to 0.90%	29.63%	to	30.03%
December 31, 2008	1,927	$	0.95679	to	$	0.97631	1,847	1.10%	0.60% to 0.90%	–31.12%	to	–30.91%
December 31, 2007	1,921	$	1.38908	to	$	1.41320	2,673	0.75%	0.60% to 0.90%	–4.48%	to	–4.21%
December 31, 2006	1,921	$	1.45430	to	$	1.47528	2,799	0.56%	0.60% to 0.90%	13.58%	to	13.93%
December 31, 2005	2,150	$	1.28043	to	$	1.29493	2,755	0.47%	0.60% to 0.90%	3.68%	to	3.98%
	Prudential SP PIMCO Total Return Portfolio (expired December 4, 2009)
December 31, 2009	0	$	0.00000	to	$	0.00000	0	3.54%	0.60% to 0.90%	13.02%	to	13.33%
December 31, 2008	4,375	$	1.30027	to	$	1.32681	5,698	4.97%	0.60% to 0.90%	–1.08%	to	–0.79%
December 31, 2007	5,237	$	1.31446	to	$	1.33734	6,891	4.25%	0.60% to 0.90%	8.46%	to	8.79%
December 31, 2006	6,405	$	1.21194	to	$	1.22930	7,766	4.16%	0.60% to 0.90%	2.74%	to	3.06%
December 31, 2005	6,255	$	1.17958	to	$	1.19281	7,381	4.72%	0.60% to 0.90%	1.47%	to	1.78%
	Prudential SP PIMCO High Yield Portfolio (expired November 13, 2009)
December 31, 2009	0	$	0.00000	to	$	0.00000	0	6.78%	0.60% to 0.90%	38.35%	to	38.70%
December 31, 2008	1,003	$	1.09087	to	$	1.11265	1,095	8.27%	0.60% to 0.90%	–26.17%	to	–25.95%
December 31, 2007	1,018	$	1.47764	to	$	1.50250	1,507	5.76%	0.60% to 0.90%	2.85%	to	3.19%
December 31, 2006	2,315	$	1.43671	to	$	1.45604	3,328	7.34%	0.60% to 0.90%	8.55%	to	8.85%
December 31, 2005	2,214	$	1.32352	to	$	1.33759	2,931	6.58%	0.60% to 0.90%	3.11%	to	3.41%
	Janus Aspen Janus Portfolio – Service Shares
December 31, 2009	298	$	1.08590	to	$	1.08590	323	0.37%	0.90% to 0.90%	34.79%	to	34.79%
December 31, 2008	339	$	0.80560	to	$	0.80560	273	0.40%	0.90% to 0.90%	–40.40%	to	–40.40%
December 31, 2007	600	$	1.35169	to	$	1.35169	812	0.87%	0.90% to 0.90%	13.77%	to	13.77%
December 31, 2006	161	$	1.18814	to	$	1.18814	192	0.29%	0.90% to 0.90%	10.14%	to	10.14%
December 31, 2005	125	$	1.07877	to	$	1.07877	135	0.13%	0.90% to 0.90%	3.09%	to	3.09%

A32

Note 7: Financial Highlights (Continued)

	At year ended							For year ended
	Units (000s)	Unit Value Lowest – Highest					Net Assets (000s)	Investment Income Ratio*	Expense Ratio** Lowest – Highest	Total Return*** Lowest – Highest
	Prudential SP Strategic Partners Focused Growth Portfolio
December 31, 2009	753	$	1.24133	to	$	1.27005	936	0.00%	0.60% to 0.90%	42.86%	to	43.27%
December 31, 2008	423	$	0.86890	to	$	0.88645	369	0.00%	0.60% to 0.90%	–38.97%	to	–38.78%
December 31, 2007	391	$	1.42362	to	$	1.44798	558	0.00%	0.60% to 0.90%	14.21%	to	14.56%
December 31, 2006	371	$	1.24647	to	$	1.26395	464	0.00%	0.60% to 0.90%	–1.54%	to	–1.25%
December 31, 2005	26	$	1.26599	to	$	1.27992	33	0.00%	0.60% to 0.90%	14.11%	to	14.45%
	Prudential SP Mid Cap Growth Portfolio
December 31, 2009	394	$	0.97505	to	$	0.99770	387	0.00%	0.60% to 0.90%	30.31%	to	30.71%
December 31, 2008	399	$	0.74827	to	$	0.76327	301	0.00%	0.60% to 0.90%	–43.08%	to	–42.91%
December 31, 2007	661	$	1.31463	to	$	1.33691	872	0.18%	0.60% to 0.90%	15.17%	to	15.51%
December 31, 2006	883	$	1.14151	to	$	1.15736	1,011	0.00%	0.60% to 0.90%	–2.81%	to	–2.53%
December 31, 2005	882	$	1.17452	to	$	1.18742	1,038	0.00%	0.60% to 0.90%	4.32%	to	4.63%
	SP Prudential U.S. Emerging Growth Portfolio
December 31, 2009	624	$	1.67979	to	$	1.71837	1,051	0.43%	0.60% to 0.90%	40.62%	to	41.05%
December 31, 2008	1,827	$	1.19460	to	$	1.21827	2,184	0.30%	0.60% to 0.90%	–36.80%	to	–36.61%
December 31, 2007	2,125	$	1.89006	to	$	1.92190	4,019	0.35%	0.60% to 0.90%	15.77%	to	16.12%
December 31, 2006	2,457	$	1.63265	to	$	1.65517	4,014	0.00%	0.60% to 0.90%	8.60%	to	8.93%
December 31, 2005	2,583	$	1.50331	to	$	1.51950	3,884	0.00%	0.60% to 0.90%	16.74%	to	17.07%
	Prudential SP Conservative Asset Allocation Portfolio (expired November 20, 2009)
December 31, 2009	0	$	0.00000	to	$	0.00000	0	4.35%	0.60% to 0.90%	18.58%	to	18.88%
December 31, 2008	603	$	1.13924	to	$	1.16234	693	2.18%	0.60% to 0.90%	–20.92%	to	–20.68%
December 31, 2007	285	$	1.44054	to	$	1.46531	415	3.09%	0.60% to 0.90%	8.41%	to	8.74%
December 31, 2006	311	$	1.32877	to	$	1.34756	417	3.40%	0.60% to 0.90%	7.70%	to	8.03%
December 31, 2005	339	$	1.23376	to	$	1.24740	421	1.33%	0.60% to 0.90%	4.96%	to	5.27%
	Prudential SP Balanced Asset Allocation Portfolio (expired November 13, 2009)
December 31, 2009	0	$	0.00000	to	$	0.00000	0	3.22%	0.60% to 0.90%	20.52%	to	20.83%
December 31, 2008	532	$	1.07609	to	$	1.09781	580	2.51%	0.60% to 0.90%	–29.19%	to	–28.97%
December 31, 2007	488	$	1.51959	to	$	1.54560	748	2.09%	0.60% to 0.90%	8.37%	to	8.70%
December 31, 2006	561	$	1.40222	to	$	1.42193	791	2.23%	0.60% to 0.90%	9.71%	to	10.03%
December 31, 2005	420	$	1.27817	to	$	1.29229	540	1.02%	0.60% to 0.90%	6.65%	to	6.96%
	Prudential SP Growth Asset Allocation Portfolio
December 31, 2009	1,074	$	1.24768	to	$	1.27647	1,352	2.25%	0.60% to 0.90%	25.09%	to	25.46%
December 31, 2008	1,071	$	0.99745	to	$	1.01740	1,076	1.76%	0.60% to 0.90%	–36.92%	to	–36.74%
December 31, 2007	990	$	1.58136	to	$	1.60825	1,577	1.61%	0.60% to 0.90%	8.25%	to	8.57%
December 31, 2006	909	$	1.46083	to	$	1.48126	1,337	1.65%	0.60% to 0.90%	11.88%	to	12.22%
December 31, 2005	692	$	1.30565	to	$	1.32000	907	0.53%	0.60% to 0.90%	8.26%	to	8.59%
	Prudential SP Aggressive Growth Asset Allocation Portfolio (expired November 13, 2009)
December 31, 2009	0	$	0.00000	to	$	0.00000	0	1.43%	0.60% to 0.90%	25.73%	to	26.04%
December 31, 2008	1,077	$	0.91948	to	$	0.93817	992	1.08%	0.60% to 0.90%	–42.70%	to	–42.53%
December 31, 2007	1,079	$	1.60472	to	$	1.63236	1,734	0.95%	0.60% to 0.90%	8.22%	to	8.54%
December 31, 2006	1,100	$	1.48283	to	$	1.50389	1,633	2.11%	0.60% to 0.90%	13.26%	to	13.60%
December 31, 2005	1,349	$	1.30925	to	$	1.32384	1,767	0.17%	0.60% to 0.90%	9.50%	to	9.83%
	Prudential SP International Growth Portfolio
December 31, 2009	2,071	$	1.35485	to	$	1.38631	2,811	2.12%	0.60% to 0.90%	35.92%	to	36.33%
December 31, 2008	2,405	$	0.99677	to	$	1.01686	2,400	1.57%	0.60% to 0.90%	–50.74%	to	–50.59%
December 31, 2007	2,225	$	2.02355	to	$	2.05803	4,507	0.89%	0.60% to 0.90%	18.48%	to	18.83%
December 31, 2006	1,653	$	1.70796	to	$	1.73186	2,826	0.82%	0.60% to 0.90%	19.96%	to	20.33%
December 31, 2005	756	$	1.42375	to	$	1.43929	1,077	0.99%	0.60% to 0.90%	15.36%	to	15.70%

A33

Note 7: Financial Highlights (Continued)

	At year ended							For year ended
	Units (000s)	Unit Value Lowest – Highest					Net Assets (000s)	Investment Income Ratio*	Expense Ratio** Lowest – Highest	Total Return*** Lowest – Highest
	Prudential SP International Value Portfolio
December 31, 2009	2,645	$	1.46270	to	$	1.49623	3,875	3.20%	0.60% to 0.90%	31.18%	to	31.57%
December 31, 2008	2,419	$	1.11505	to	$	1.13724	2,701	2.98%	0.60% to 0.90%	–44.56%	to	–44.39%
December 31, 2007	2,889	$	2.01130	to	$	2.04511	5,816	1.89%	0.60% to 0.90%	17.03%	to	17.38%
December 31, 2006	3,893	$	1.71864	to	$	1.74236	6,693	1.05%	0.60% to 0.90%	27.95%	to	28.32%
December 31, 2005	2,274	$	1.34318	to	$	1.35783	3,055	0.21%	0.60% to 0.90%	12.76%	to	13.08%
	AST Marsico Capital Growth Portfolio (available May 1, 2008)
December 31, 2009	33	$	7.83294	to	$	7.87198	255	0.55%	0.60% to 0.90%	28.60%	to	28.98%
December 31, 2008	30	$	6.09083	to	$	6.10302	183	0.31%	0.60% to 0.90%	–39.73%	to	–39.61%
	AST T. Rowe Price Large-Cap Growth Portfolio (available May 1, 2008)
December 31, 2009	45	$	9.50639	to	$	9.55383	432	0.00%	0.60% to 0.90%	52.00%	to	52.46%
December 31, 2008	24	$	6.25402	to	$	6.26653	152	0.13%	0.60% to 0.90%	–38.57%	to	–38.44%
	AST Large-Cap Value Portfolio (available May 1, 2008)
December 31, 2009	66	$	7.26363	to	$	7.30001	477	2.82%	0.60% to 0.90%	18.37%	to	18.72%
December 31, 2008	71	$	6.13644	to	$	6.14877	436	1.74%	0.60% to 0.90%	–39.72%	to	–39.60%
	AST Small-Cap Growth Portfolio (available May 1, 2008)
December 31, 2009	138	$	9.00344	to	$	9.04834	1,243	0.05%	0.60% to 0.90%	32.71%	to	33.11%
December 31, 2008	128	$	6.78407	to	$	6.79773	871	0.00%	0.60% to 0.90%	–33.14%	to	–33.00%
	AST PIMCO Total Return Bond Portfolio (available December 4, 2009)
December 31, 2009	636	$	9.93371	to	$	9.93597	6,315	0.00%	0.60% to 0.90%	–0.57%	to	–0.55%
	AST Aggressive Asset Allocation Portfolio (available November 13, 2009)
December 31, 2009	114	$	10.21245	to	$	10.21653	1,164	0.00%	0.60% to 0.90%	0.01%	to	0.05%
	AST Balanced Asset Allocation Portfolio (available November 13, 2009)
December 31, 2009	83	$	10.11979	to	$	10.12386	840	0.00%	0.60% to 0.90%	–0.21%	to	–0.17%
	AST Preservation Asset Allocation Portfolio (available November 20, 2009)
December 31, 2009	50	$	10.01755	to	$	10.02101	506	0.00%	0.60% to 0.90%	–0.19%	to	–0.15%

*These amounts represent the dividends, excluding distributions of capital gains, received by the subaccount from the underlying mutual fund, net of management fees assessed by the fund manager, divided by the average net assets. This ratio is annualized and excludes those expenses, such as mortality and expense charges, that result in direct reductions in the unit values. The recognition of investment income by the subaccount is affected by the timing of the declaration of dividends by the underlying fund in which the subaccounts invest.

**These ratios represent the annualized contract expenses of the separate account, consisting primarily of mortality and expense charges, for each period indicated. The ratios include only those expenses that result in a direct reduction to unit values. Charges made directly to contract owner accounts through the redemption of units and expenses of the underlying fund are excluded.

A34

Note 7: Financial Highlights (Continued)

***These amounts represent the total return for the periods indicated, including changes in the value of the underlying fund, and reflect deductions for all items included in the expense ratio. The total return does not include any expenses assessed through the redemption of units; inclusion of these expenses in the calculation would result in a reduction in the total return presented. Product designs within a subaccount with an effective date during a period were excluded from the range of total return for that period. Contract owners may experience different total returns based on their investment options. Investment options with a date notation indicate the effective date of that investment option in the Account. Total returns for periods less than one year are not annualized. The total return is calculated for each of the five years in the period ended December 31, 2009 or from the effective date of the subaccount through the end of the reporting period.

Charges and Expenses

A. Mortality Risk and Expense Risk Charges

The mortality risk and expense risk charges, at an effective annual rate of 0.90%, is applied daily against the net assets of PVAL, SVUL and VUL contract owners held in each subaccount. Mortality risk is that contract owners may not live as long as estimated and expense risk is that the cost of issuing and administering the policies may exceed related charges by Prudential. Prudential currently intends to charge only 0.60% on PVAL contracts with face amounts of $100,000 or more and for VUL contracts but reserves the right to make the full 0.90% charge. The mortality risk and expense risk charges are assessed through reduction in unit values.

B. Partial Withdrawal Charge

A charge is imposed by Prudential on partial withdrawals of the cash surrender value. A charge equal to the lesser of $25 or 2% for SVUL and VUL and $15 or 2% for PVAL will be made in connection with each partial withdrawal of the cash surrender value of a contract. The range for withdrawal charges is 0% – 2%. A charge is assessed through the redemption of units.

C. Deferred Sales Charge

A deferred sales charge is imposed upon surrenders of certain variable life insurance contracts to compensate Prudential for sales and other marketing expenses. The amount of any sales charge will depend on the number of years that have elapsed since the contract was issued but will not exceed 50% of the first year’s primary annual premium for PVAL contracts and 26% of the lesser of (a) the target level premium for the contract and (b) the actual premiums paid for VUL contracts. No sales charge will be imposed after the tenth year of the contract. No sales charge will be imposed after the tenth year of the contract. No sales charge will be imposed on death benefits. A deferred sales charge is assessed through the redemption of units.

D. Cost of Insurance and Other Related Charges

Contract owner contributions are subject to certain deductions prior to being invested in the Account. The deductions are for (1) transaction costs which are deducted from each premium payment for PVAL and VUL, to cover premium collection and processing costs; (2) state premium taxes; and (3) sales charges which are deducted in order to compensate Prudential for the cost of selling the contract. Sales charges will not exceed 0.5% of the primary annual premium for PVAL contracts, 30% of the premiums paid in the first contract year up to the amount of the target level premium and 4% of premiums paid in excess of the target level premium for SVUL contracts and 4% of premiums paid in each contract year up to the amount of the target level premium for VUL contracts. Contracts are also subject to monthly charges for the costs of administering the contract and to compensate Prudential for the guaranteed minimum death benefit risk. These charges are assessed through the redemption of units.

A35

Note 8: Other

Contract owner net payments — represent contract owner contributions under the Variable Life Policies reduced by applicable deductions, charges, and state premium taxes.

Policy loans — represent amounts borrowed by contractholders using the policy as the security for the loan.

Policy loan repayments and interest — represent payments made by contractholders to reduce the total outstanding policy loan balance.

Surrenders, withdrawals, and death benefits — are payments to contract owners and beneficiaries made under the terms of the Variable Life Policies, and amounts that contract owners have requested to be withdrawn or paid to them.

Net transfers between other subaccounts or fixed rate options — are amounts that contract owners have directed to be moved among subaccounts, including permitted transfers to and from the Guaranteed Interest Account and Market Value Adjustment.

A36

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Contract Owners of

The Prudential Variable Appreciable Account

and the Board of Directors of

The Prudential Insurance Company of America

In our opinion, the accompanying statements of net assets and the related statements of operations and of changes in net assets present fairly, in all material respects, the financial position of each of the subaccounts listed in Note 1 of The Prudential Variable Appreciable Account at December 31, 2009, the results of each of their operations and the changes in each of their net assets for each of periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the management of The Prudential Insurance Company of America. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of fund shares owned at December 31, 2009 by correspondence with the transfer agents of the investee mutual funds, provide a reasonable basis for our opinion.

/s/ PricewaterhouseCoopers LLP

New York, New York

April 1, 2010

A37

	THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
	Consolidated Statements of Financial Position
	December 31, 2009 and 2008 (in millions, except share amounts)
			2009		2008
ASSETS
Fixed maturities, available for sale, at fair value (amortized cost: 2009-$105,356; 2008- $107,067)			$	106,208	$	97,256
Trading account assets supporting insurance liabilities, at fair value				14,639		12,717
Other trading account assets, at fair value				2,865		4,623
Equity securities, available for sale, at fair value (cost: 2009-$3,996; 2008-$4,378)				4,856		3,630
Commercial mortgage and other loans				26,289		27,717
Policy loans				7,907		7,779
Other long-term investments				3,257		3,513
Short-term investments and other				4,785		3,659
		Total investments		170,806		160,894
Cash and cash equivalents				7,139		8,123
Accrued investment income				1,586		1,620
Deferred policy acquisition costs				7,314		8,538
Deferred income taxes, net				-		1,864
Other assets				11,510		17,289
Due from parent and affiliates				5,841		5,568
Separate account assets				132,476		122,735
		Total Assets	$	336,672	$	326,631
LIABILITIES AND EQUITY
LIABILITIES
Future policy benefits			$	77,097	$	76,863
Policyholders' account balances				71,654		71,199
Policyholders' dividends				1,033		1,132
Securities sold under agreements to repurchase				5,735		7,501
Cash collateral for loaned securities				2,802		3,429
Income taxes				1,354		320
Short-term debt				2,931		5,655
Long-term debt				6,929		8,687
Other liabilities				9,680		11,744
Due to parent and affiliates				4,332		6,300
Separate account liabilities				132,476		122,735
		Total liabilities		316,023		315,565
COMMITMENTS AND CONTINGENT LIABILITIES (See Note 22)
EQUITY
Common Stock ($5.00 par value; 500,000 shares authorized; issued and outstanding
	at December 31, 2009 and 2008, respectively)			2		2
Additional paid-in capital				18,372		17,819
Accumulated other comprehensive loss				(447)		(6,590)
Retained earnings (deficit)				2,700		(186)
	Total Prudential Insurance Company of America's equity			20,627		11,045
Noncontrolling interests				22		21
	Total equity			20,649		11,066
	TOTAL LIABILITIES AND EQUITY		$	336,672	$	326,631

See Notes to Consolidated Financial Statements

B-1

	THE PRUDENTIAL INSURANCE COMPANY OF AMERICA
	Consolidated Statements of Operations
	Years Ended December 31, 2009, 2008 and 2007 (in millions)
			2009		2008		2007
REVENUES
Premiums			$	9,633	$	9,473	$	8,873
Policy charges and fee income				2,090		2,180		2,139
Net investment income				8,593		9,250		9,825
Other income				2,661		(113)		1,425
Realized investment gains (losses), net:
		Other-than-temporary impairments on fixed maturity securities		(3,337)		(2,060)		(149)
		Other-than-temporary impairments on fixed maturity securities transferred to
		Other Comprehensive Income		2,004		-		-
		Other realized investment gains (losses), net		(1,262)		580		602
		Total realized investment gains (losses), net		(2,595)		(1,480)		453
	Total revenues			20,382		19,310		22,715
BENEFITS AND EXPENSES
Policyholders' benefits				11,047		11,573		10,445
Interest credited to policyholders' account balances				3,648		2,203		3,025
Dividends to policyholders'				1,257		2,151		2,754
General and administrative expenses				3,996		4,175		4,260
	Total benefits and expenses			19,948		20,102		20,484
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
AND EQUITY IN EARNINGS OF OPERATING JOINT VENTURES				434		(792)		2,231
Income taxes:
	Current			350		(284)		436
	Deferred			(741)		(53)		142
		Total income tax expense (benefit)		(391)		(337)		578
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE EQUITY IN EARNINGS
OF OPERATING JOINT VENTURES				825		(455)		1,653
Equity in earnings of operating joint ventures, net of taxes				1,487		(218)		224
INCOME (LOSS) FROM CONTINUING OPERATIONS				2,312		(673)		1,877
Income from discontinued operations, net of taxes				-		5		64
NET INCOME (LOSS)				2,312		(668)		1,941
Less: Income attributable to noncontrolling interests				1		2		2
NET INCOME (LOSS) ATTRIBUTABLE TO PRUDENTIAL INSURANCE COMPANY OF AMERICA			$	2,311	$	(670)	$	1,939

See Notes to Consolidated Financial Statements

B-2

PRUDENTIAL INSURANCE COMPANY OF AMERICA
Consolidated Statements of Equity
Years Ended December 31, 2009, 2008 and 2007 (in millions)
											Total
									Accumulated		Prudential
					Additional		Retained		Other		Insurance Company
			Common		Paid-in		Earnings		Comprehensive		of America		Noncontrolling		Total
			Stock		Capital		(Deficit)		Income (Loss)		Equity		Interests		Equity
Balance, December 31, 2006			$	2	$	15,770	$	1,987	$	(82)	$	17,677	$	16	$	17,693
Dividends to parent				-		-		(1,887)		-		(1,887)		-		(1,887)
Capital contribution from parent				-		34		-		-		34		-		34
Distributions to noncontrolling interests				-		-		-		-		-		(2)		(2)
Consolidations/deconsolidations of
	noncontrolling interests			-		-		-		-		-		4		4
Purchase of fixed maturities from an affiliate				-		3		-		(3)		-		-		-
Recapture of affiliated reinsurance agreement				-		18		-		-		18		-		18
Long-term stock-based compensation program				-		89		-		-		89		-		89
Cumulative effect of changes in accounting
	principles, net of taxes			-		-		(59)		-		(59)		-		(59)
Comprehensive income:
	Net income			-		-		1,939		-		1,939		2		1,941
	Other comprehensive income, net of tax:
		Change in foreign currency translation
		adjustments								8		8		-		8
		Change in net unrealized investment gains (losses)								(270)		(270)		-		(270)
		Change in pension and postretirement
		unrecognized net periodic benefit cost								521		521		-		521
	Other comprehensive income											259		-		259
Total comprehensive income												2,198		2		2,200
Balance, December 31, 2007				2		15,914		1,980		174		18,070		20		18,090
Dividends to parent				-		-		(1,523)		-		(1,523)		-		(1,523)
Capital contribution from parent				-		785		-		-		785		-		785
Consolidations/deconsolidations of
	noncontrolling interests			-		-		-		-		-		(1)		(1)
Deferred tax asset contributed to parent				-		(9)		-		-		(9)		-		(9)
Assets purchased/transferred from affiliates				-		81		-		(145)		(64)		-		(64)
Long-term stock-based compensation program				-		7		-		-		7		-		7
Impact on Company's investment in Wachovia
	Securities due to addition of
	A.G. Edwards business, net of tax (1)			-		1,041		-		-		1,041		-		1,041
Cumulative effect of changes in accounting
	principles, net of taxes			-		-		27		-		27		-		27
Comprehensive loss:
	Net income (loss)			-		-		(670)		-		(670)		2		(668)
	Other comprehensive income (loss), net of tax:
		Change in foreign currency translation
		adjustments								(24)		(24)		-		(24)
		Change in net unrealized investment gains								(5,888)		(5,888)		-		(5,888)
		Change in pension and postretirement
		unrecognized net periodic benefit cost								(707)		(707)		-		(707)

See Notes to Consolidated Financial Statements

B-3

	Other comprehensive loss											(6,619)		-		(6,619)
Total comprehensive income (loss)												(7,289)		2		(7,287)
Balance, December 31, 2008				2		17,819		(186)		(6,590)		11,045		21		11,066
Capital contribution from parent				-		415		-		-		415		-		415
Assets purchased/transferred  from affiliates				-		256		-		-		256		-		256
Long-term stock-based compensation program				-		(9)		-		-		(9)		-		(9)
Impact on Company's investment in Wachovia
	Securities due to addition of
	A.G. Edwards business, net of tax (1)			-		(109)		-		-		(109)		-		(109)
Impact of adoption of guidance for
	other-than-temporary impairments of
	debt securities, net of taxes			-		-		575		(575)		-		-		-
Comprehensive income:
	Net income			-		-		2,311		-		2,311		1		2,312
	Other comprehensive income, net of tax:
		Change in foreign currency translation
		adjustments								6		6		-		6
		Change in net unrealized investment gains								7,332		7,332		-		7,332
		Change in pension and postretirement
		unrecognized net periodic benefit cost								(620)		(620)		-		(620)
	Other comprehensive income											6,718		-		6,718
Total comprehensive income												9,029		1		9,030
Balance, December 31, 2009			$	2	$	18,372	$	2,700	$	(447)	$	20,627	$	22	$	20,649

(1)   See Note 7

See Notes to Consolidated Financial Statements

B-4

	PRUDENTIAL INSURANCE COMPANY OF AMERICA
	Consolidated Statements of Cash Flows
	Years Ended December 31, 2009,  2008 and 2007 (in millions)
			2009		2008		2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)			$	2,312	$	(668)	$	1,941
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
	Realized investment (gains) losses, net			2,595		1,480		(453)
	Policy charges and fee income			(824)		(761)		(662)
	Interest credited to policyholders' account balances			3,648		2,203		3,025
	Depreciation and amortization			(53)		620		53
	(Gains) losses on trading account assets supporting insurance liabilities, net			(1,533)		1,364		-
	Gain on sale of joint venture in Wachovia Securities			(2,247)		-		-
	Change in:
		Deferred policy acquisition costs		(569)		(259)		(537)
		Future policy benefits and other insurance liabilities		(218)		2,430		1,063
		Other trading account assets		(407)		(2,837)		(653)
		Income taxes		(90)		(779)		34
		Other, net		523		3,209		(189)
		Cash flows from operating activities		3,137		6,002		3,622
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from the sale/maturity/prepayment of:
	Fixed maturities, available for sale			26,552		60,931		81,816
	Equity securities, available for sale			765		2,500		3,303
	Trading account assets supporting insurance liabilities and other trading account assets			37,183		26,391		-
	Commercial mortgage and other loans			3,321		2,594		4,371
	Policy loans			968		1,345		778
	Other long-term investments			295		1,134		582
	Short-term investments			14,604		17,949		12,970
Payments for the purchase/origination of:
	Fixed maturities, available for sale			(24,194)		(55,223)		(79,976)
	Equity securities, available for sale			(827)		(2,594)		(3,298)
	Trading account assets supporting insurance liabilities and other trading account assets			(37,522)		(27,176)		-
	Commercial mortgage and other loans			(2,336)		(4,770)		(6,848)
	Policy loans			(778)		(968)		(701)
	Other long-term investments			(399)		(904)		(1,137)
	Short-term investments			(15,449)		(17,854)		(12,179)
Proceeds from sale of joint venture in Wachovia Securities				4,500		-		-
Due to/from parent and affiliates				(982)		(344)		(610)
Other, net				(461)		(561)		(251)
		Cash flows from (used in) investing activities		5,240		2,450		(1,180)
CASH FLOWS FROM FINANCING ACTIVITIES
Policyholders' account deposits				16,297		18,943		16,204
Policyholders' account withdrawals				(18,466)		(17,712)		(16,157)
Net change in securities sold under agreements to repurchase and cash collateral for loaned securities				(2,257)		(5,944)		(1,786)
Net change in financing arrangements (maturities 90 days or less)				(3,327)		(3,410)		(745)
Proceeds from the issuance of debt (maturities longer than 90 days)				1,929		7,534		3,463
Repayments of debt (maturities longer than 90 days)				(3,259)		(3,636)		(2,429)
Excess tax benefits from share-based payment arrangements				2		9		40
Capital contribution from parent				-		594		-
Dividends to parent				-		(1,523)		(1,870)
Other, net				(289)		(54)		(18)
		Cash flows used in financing activities		(9,370)		(5,199)		(3,298)
Effect of foreign exchange rate changes on cash balances				9		-		(6)
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS				(984)		3,253		(862)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR				8,123		4,870		5,732
CASH AND CASH EQUIVALENTS, END OF YEAR			$	7,139	$	8,123	$	4,870
SUPPLEMENTAL CASH FLOW INFORMATION
Income taxes paid			$	492	$	379	$	57
Interest paid			$	388	$	631	$	974
NON-CASH TRANSACTIONS DURING THE YEAR
Impact on Company's investment in Wachovia Securities due to addition of A.G. Edwards business, net of tax			$	(109)	$	1,041	$	-

See Notes to Consolidated Financial Statements

B-5

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

1.    BUSINESS AND BASIS OF PRESENTATION

The Prudential Insurance Company of America (“Prudential Insurance”), together with its subsidiaries (collectively, the “Company”), is a wholly owned subsidiary of Prudential Holdings, LLC (“Prudential Holdings”), which is a wholly owned subsidiary of Prudential Financial, Inc. (“Prudential Financial”). The Company has organized its operations into the Closed Block Business and the Financial Services Businesses. The Closed Block Business consists principally of the Closed Block (see Note 12); assets held outside the Closed Block that Prudential Insurance needs to hold to meet capital requirements related to the Closed Block policies and invested assets held outside the Closed Block that represent the difference between the Closed Block Assets and Closed Block Liabilities and the interest maintenance reserve (collectively, “Surplus and Related Assets”); deferred policy acquisition costs related to Closed Block policies; and certain other related assets and liabilities. Its Financial Services Businesses consist primarily of non-participating individual life insurance, annuities, group insurance, retirement-related services and global commodities sales and trading. The Company also held an equity method investment in the retail securities brokerage joint venture Wachovia Securities Financial Holdings, LLC (“Wachovia Securities”), which was sold on December 31, 2009. See Note 7 for more details on this transaction.

Market Conditions

Some of the Company’s operations were materially adversely affected by the adverse conditions in the global financial markets and general economic conditions that began in the second half of 2007 and continued into the early portion of 2009.  The Company’s results of operations and financial condition may be adversely affected, possibly materially, if these conditions recur or current market or economic conditions deteriorate.  These economic conditions included, but were not limited to:

·   A period of extreme volatility and limited market liquidity,  particularly in the global fixed-income markets, which led to decreased liquidity, increased price volatility, credit downgrade events, depressed valuations and increased probability of default;

·   Markets in the United States and elsewhere experienced extreme and unprecedented volatility and disruption which adversely impacted Prudential Financial’s and the Company’s liquidity, access to capital and cost of capital;

·   Market conditions impacted the Company’s businesses and profitability and a recurrence or further deterioration of these conditions would affect the Company’s businesses and profitability.  These impacts include:

o   Profitability of many of the Company’s  insurance products are dependent in part on the value of the separate accounts supporting these products;

o   Guaranteed minimum benefits contained in many of the Company’s variable annuity products may be higher than the current account value or pricing assumptions would support requiring  material increases to reserves for such products and may cause customers to retain contracts in force in order  to benefit from the guarantees, thereby increasing the cost to the Company;

o   The Company impaired value of business acquired (“VOBA”) by $73 million and $234 million during 2009 and 2008, respectively, reflective of market conditions.  Market conditions also impacted the amortization of deferred policy acquisition costs, or DAC. A recurrence of or further market deterioration could result in additional acceleration of amortization of DAC or VOBA, as well as an impairment of goodwill.

o   Prudential Financial, Prudential Insurance and Prudential Funding, the commercial paper subsidiary of Prudential Insurance, experienced downgrades in their insurance claims-paying rating and credit ratings issued by rating agencies, including a downgrade of Prudential Insurance’s insurance claims-paying ratings to “A2” from “Aa3,” by Moody’s on March 18, 2009 and a downgrade of Prudential Funding’s short-term debt rating for commercial paper to P-2 from P-1, by Moody’s on August 20, 2009. Prudential Financial, Prudential Insurance or Prudential Funding could experience additional ratings downgrades if conditions recur or deteriorate.  Credit and claims-paying ratings are important factors in Prudential Financial’s, Prudential Insurance’s and Prudential Funding’s ability to issue debt and the cost of such financing, potential collateral posting requirements, ability to market products and may impact the level of surrender activity on products Prudential Insurance has issued.

B-6

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Demutualization and Destacking

On December 18, 2001 (the “date of demutualization”), the Company converted from a mutual life insurance company to a stock life insurance company and became a direct, wholly owned subsidiary of Prudential Holdings, which became a direct, wholly owned subsidiary of Prudential Financial.

Concurrent with the demutualization, the Company completed a corporate reorganization (the “destacking”) whereby various subsidiaries (and certain related assets and liabilities) of the Company were dividended so that they became wholly owned subsidiaries of Prudential Financial rather than of the Company.

Basis of Presentation

The Consolidated Financial Statements include the accounts of Prudential Insurance, entities over which the Company exercises control, including majority-owned subsidiaries and minority-owned entities such as limited partnerships in which the Company is the general partner, and variable interest entities in which the Company is considered the primary beneficiary. See Note 7 for more information on the Company’s consolidated variable interest entities. The Consolidated Financial Statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Intercompany balances and transactions have been eliminated. The Company has evaluated subsequent events through April 2, 2010, the date these financial statements were issued.

Use of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The most significant estimates include those used in determining deferred policy acquisition costs and related amortization; valuation of business acquired and its amortization; amortization of sales inducements; measurement of goodwill and any related impairment; valuation of investments including derivatives and the recognition of other-than-temporary impairments; future policy benefits including guarantees;  pension and other postretirement benefits; provision for income taxes and valuation of deferred tax assets; and reserves for contingent liabilities, including reserves for losses in connection with unresolved legal matters. 

Reclassifications

Certain amounts in prior years have been reclassified to conform to the current year presentation.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Investments and Investment-Related Liabilities

The Company’s principal investments are fixed maturities; trading account assets; equity securities; commercial mortgage and other loans; policy loans; other long-term investments, including joint ventures (other than operating joint ventures), limited partnerships, and real estate; and short-term investments. Investments and investment-related liabilities also include securities repurchase and resale agreements and securities lending transactions. The accounting policies related to each are as follows:

B-7

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Fixed maturities are comprised of bonds, notes and redeemable preferred stock. Fixed maturities classified as “available for sale” are carried at fair value. See Note 19 for additional information regarding the determination of fair value. The amortized cost of fixed maturities is adjusted for amortization of premiums and accretion of discounts to maturity. Interest income, as well as the related amortization of premium and accretion of discount, is included in “Net investment income” under the effective yield method. For mortgage-backed and asset-backed securities, the effective yield is based on estimated cash flows, including prepayment assumptions based on data from widely accepted third-party data sources or internal estimates. In addition to prepayment assumptions, cash flow estimates vary based on assumptions regarding the underlying collateral, including default rates and changes in value. These assumptions can significantly impact income recognition and the amount of other-than-temporary impairments recognized in earnings and other comprehensive income. For high credit quality mortgage-backed and asset-backed securities (those rated AA or above), cash flows are provided quarterly, and the amortized cost and effective yield of the security are adjusted as necessary to reflect historical prepayment experience and changes in estimated future prepayments. The adjustments to amortized cost are recorded as a charge or credit to net investment income in accordance with the retrospective method. For asset-backed and mortgage-backed securities rated below AA, the effective yield is adjusted prospectively for any changes in estimated cash flows. See the discussion below on realized investment gains and losses for a description of the accounting for impairments, as well as the impact of the Company’s adoption of new authoritative guidance for the recognition and presentation of other-than-temporary impairments for debt securities. Unrealized gains and losses on fixed maturities classified as “available for sale,” net of tax, and the effect on deferred policy acquisition costs, valuation of business acquired, deferred sales inducements, future policy benefits and policyholders’ dividends that would result from the realization of unrealized gains and losses, are included in “Accumulated other comprehensive income (loss).”

“Trading account assets supporting insurance liabilities, at fair value” includes invested assets that support certain products which are experience rated, meaning that the investment results associated with these products are expected to ultimately accrue to contractholders. Realized and unrealized gains and losses for these investments are reported in “Other income.” Interest and dividend income from these investments is reported in “Net investment income.”

“Other trading account assets, at fair value” consist primarily of investments and certain derivatives, including those used by the Company in its capacity as a broker-dealer. These instruments are carried at fair value. Realized and unrealized gains and losses on these investments and on derivatives used by the Company in its capacity as a broker-dealer are reported in “Other income.” Interest and dividend income from these investments is reported in “Net investment income.”

Equity securities available for sale are comprised of common stock, mutual fund shares, non-redeemable preferred stock, and perpetual preferred stock, and are carried at fair value. The associated unrealized gains and losses, net of tax, and the effect on deferred policy acquisition costs, valuation of business acquired, deferred sales inducements, future policy benefits and policyholders’ dividends that would result from the realization of unrealized gains and losses, are included in “Accumulated other comprehensive income (loss).” The cost of equity securities is written down to fair value when a decline in value is considered to be other-than-temporary. See the discussion below on realized investment gains and losses for a description of the accounting for impairments. Dividends from these investments are recognized in “Net investment income” when declared.

Commercial mortgage and other loans originated and held for investment are generally carried at unpaid principal balance, net of an allowance for losses. Commercial mortgage and other loans acquired, including those related to the acquisition of a business, are recorded at fair value when purchased, reflecting any premiums or discounts to unpaid principal balances. Interest income, as well as prepayment fees and the amortization of the related premiums or discounts, is included in “Net investment income.” For those loans not reported at fair value, the allowance for losses provides for the risk of credit losses inherent in the lending process and includes a loan specific reserve for each non-performing loan that has a specifically identified loss and a portfolio reserve for probable incurred but not specifically identified losses. Non-performing loans include those loans for which it is probable that amounts due according to the contractual terms of the loan agreement will not all be collected. The allowances for losses on these loans are determined based on the present value of expected future cash flows discounted at the loan’s effective interest rate, or at the fair value of the collateral if the loan is collateral dependent. Interest received on non-performing loans,

B-8

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

including loans that were previously modified in a troubled debt restructuring, is either applied against the principal or reported as net investment income, based on the Company’s assessment as to the collectability of the principal. The Company discontinues accruing interest on non-performing loans after the loans are 90 days delinquent as to principal or interest, or earlier when the Company has doubts about collectability. When a loan is deemed non-performing, any accrued but uncollectible interest is charged to interest income in the period the loan is deemed non-performing. Generally, a loan is restored to accrual status only after all delinquent interest and principal are brought current and, in the case of loans where the payment of interest has been interrupted for a substantial period, a regular payment performance has been established. The portfolio reserve for incurred but not specifically identified losses considers the current credit composition of the portfolio based on an internal quality rating, as well as property type diversification, the Company’s past loan experience and other relevant factors. Together with historical credit migration and default statistics, the internal quality ratings are used to determine a default probability by loan. Historical loss severity statistics by property type are then applied to arrive at an estimate for incurred but not specifically identified losses. Historical credit migration, default and loss severity statistics are updated each quarter based on the Company’s actual loan experience, and are considered together with other relevant qualitative factors in making the final portfolio reserve calculations. The allowance for losses on commercial mortgage and other loans can increase or decrease from period to period based on these factors. The gains and losses from the sale of loans, which are recognized when the Company relinquishes control over the loans, as well as changes in the allowance for loan losses, are reported in “Realized investment gains (losses), net.”

Policy loans are carried at unpaid principal balances. Interest income on policy loans is recognized in net investment income at the contract interest rate when earned.

Securities repurchase and resale agreements and securities loaned transactions are used to earn spread income, to borrow funds, or to facilitate trading activity. Securities repurchase and resale agreements are generally short-term in nature, and therefore, the carrying amounts of these instruments approximate fair value. As part of securities repurchase agreements or securities loaned transactions, the Company transfers either corporate debt securities, or U.S. government and government agency securities and receives cash as collateral. As part of securities resale agreements, the Company transfers cash as collateral and receives U.S. government securities. For securities repurchase agreements and securities loaned transactions used to earn spread income, the cash received is typically invested in cash equivalents, short-term investments or fixed maturities.

Securities repurchase and resale agreements that satisfy certain criteria are treated as collateralized financing arrangements. These agreements are carried at the amounts at which the securities will be subsequently resold or reacquired, as specified in the respective agreements. For securities purchased under agreements to resell, the Company’s policy is to take possession or control of the securities and to value the securities daily. Securities to be resold are the same, or substantially the same, as the securities received. For securities sold under agreements to repurchase, the market value of the securities to be repurchased is monitored, and additional collateral is obtained where appropriate, to protect against credit exposure. Securities to be repurchased are the same, or substantially the same, as those sold. Income and expenses related to these transactions executed within the insurance companies and broker-dealer subsidiaries used to earn spread income are reported as “Net investment income;” however, for transactions used to borrow funds, the associated borrowing cost is reported as interest expense (included in “General and administrative expenses”). Income and expenses related to these transactions executed within the Company’s derivative dealer operations are reported in “Other income.”

Securities loaned transactions are treated as financing arrangements and are recorded at the amount of cash received. The Company obtains collateral in an amount equal to 102% and 105% of the fair value of the domestic and foreign securities, respectively. The Company monitors the market value of the securities loaned on a daily basis with additional collateral obtained as necessary. Substantially all of the Company’s securities loaned transactions are with large brokerage firms. Income and expenses associated with securities loaned transactions used to earn spread income are reported as “Net investment income;” however, for securities loaned transactions used for funding purposes the associated rebate is reported as interest expense (included in “General and administrative expenses”).

B-9

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Other long-term investments consist of the Company’s investments in joint ventures and limited partnerships, other than operating joint ventures, as well as wholly-owned investment real estate and other investments. Joint venture and partnership interests are generally accounted for using the equity method of accounting. In certain instances in which the Company’s partnership interest is so minor (generally less than 3%) that it exercises virtually no influence over operating and financial policies, the Company applies the cost method of accounting. The Company’s income from investments in joint ventures and partnerships accounted for using the equity method or the cost method, other than the Company’s investment in operating joint ventures, is included in “Net investment income.”  The carrying value of these investments is written down, or impaired, to fair value when a decline in value is considered to be other-than-temporary. In applying the equity method or the cost method (including assessment for other-than-temporary impairment), the Company uses financial information provided by the investee, which is generally received on a one quarter lag. The Company consolidates joint ventures and limited partnerships in certain other instances where it is deemed to exercise control, or is considered the primary beneficiary of a variable interest entity. The Company’s net income from consolidated joint ventures and limited partnerships is included in the respective revenue and expense line items depending on the activity of the consolidated entity.

The Company’s wholly-owned investment real estate consists of real estate which the Company has the intent to hold for the production of income as well as real estate held for sale. Real estate which the Company has the intent to hold for the production of income is carried at depreciated cost less any writedowns to fair value for impairment losses and is reviewed for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. Real estate held for sale is carried at the lower of depreciated cost or fair value less estimated selling costs and is not further depreciated once classified as such. An impairment loss is recognized when the carrying value of the investment real estate exceeds the estimated undiscounted future cash flows (excluding interest charges) from the investment. At that time, the carrying value of the investment real estate is written down to fair value. Decreases in the carrying value of investment real estate held for the production of income due to other-than-temporary impairments are recorded in “Realized investment gains (losses), net.” Depreciation on real estate held for the production of income is computed using the straight-line method over the estimated lives of the properties, and is included in “Net investment income.” In the period a real estate investment is deemed held for sale and meets all of the discontinued operation criteria, the Company reports all related net investment income and any resulting investment gains and losses as discontinued operations for all periods presented.

Short-term investments primarily consist of highly liquid debt instruments with a maturity of greater than three months and less than twelve months when purchased, other than those debt instruments meeting this definition that are included in “Trading account assets supporting insurance liabilities, at fair value.” These investments are generally carried at fair value and include certain money market investments, short-term debt securities issued by government sponsored entities and other highly liquid debt instruments. Short-term investments held in the Company’s broker-dealer operations are marked-to-market through “Other income.”

Realized investment gains (losses) are computed using the specific identification method. Realized investment gains and losses are generated from numerous sources, including the sale of fixed maturity securities, equity securities, investments in joint ventures and limited partnerships and other types of investments, as well as adjustments to the cost basis of investments for net other-than-temporary impairments recognized in earnings. Realized investment gains and losses are also generated from prepayment premiums received on private fixed maturity securities, recoveries of principal on previously impaired securities, provisions for losses on commercial mortgage and other loans, fair value changes on embedded derivatives and free-standing derivatives that do not qualify for hedge accounting treatment, except those derivatives used in the Company’s capacity as a broker or dealer.

The Company’s available-for-sale securities with unrealized losses are reviewed quarterly to identify other-than-temporary impairments in value. In evaluating whether a decline in value is other-than-temporary, the Company considers several factors including, but not limited to the following: (1) the extent and the duration of the decline; (2) the reasons for the decline in value (credit event, currency or interest-rate related, including general credit spread widening); and (3) the financial condition of and

B-10

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

near-term prospects of the issuer. With regard to available-for-sale equity securities, the Company also considers the ability and intent to hold the investment for a period of time to allow for a recovery of value. When it is determined that a decline in value of an equity security is other-than-temporary, the carrying value of the equity security is reduced to its fair value, with a corresponding charge to earnings.

In addition, in April 2009, the Financial Accounting Standards Board (“FASB”) revised the authoritative guidance for the recognition and presentation of other-than-temporary impairments for debt securities. The Company early adopted this guidance on January 1, 2009. Prior to the adoption of this guidance the Company was required to record an other-than-temporary impairment for a debt security unless it could assert that it had both the intent and ability to hold the security for a period of time sufficient to allow for a recovery in its fair value to its amortized cost basis. The revised guidance indicates that an other-than-temporary impairment must be recognized in earnings for a debt security in an unrealized loss position when an entity either (a) has the intent to sell the debt security or (b) more likely than not will be required to sell the debt security before its anticipated recovery. For all debt securities in unrealized loss positions that do not meet either of these two criteria, the guidance requires that the Company analyze its ability to recover the amortized cost by comparing the net present value of projected future cash flows with the amortized cost of the security. The net present value is calculated by discounting the Company’s best estimate of projected future cash flows at the effective interest rate implicit in the debt security prior to impairment. The Company may use the estimated fair value of collateral as a proxy for the net present value if it believes that the security is dependent on the liquidation of collateral for recovery of its investment. If the net present value is less than the amortized cost of the investment, an other-than-temporary impairment is recognized.

Under the authoritative guidance for the recognition and presentation of other-than-temporary impairments, when an other-than-temporary impairment of a debt security has occurred, the amount of the other-than-temporary impairment recognized in earnings depends on whether the Company intends to sell the security or more likely than not will be required to sell the security before recovery of its amortized cost basis. If the debt security meets either of these two criteria, the other-than-temporary impairment recognized in earnings is equal to the entire difference between the security’s amortized cost basis and its fair value at the impairment measurement date. For other-than-temporary impairments of debt securities that do not meet these two criteria, the net amount recognized in earnings is equal to the difference between the amortized cost of the debt security and its net present value calculated as described above. Any difference between the fair value and the net present value of the debt security at the impairment measurement date is recorded in “Other comprehensive income (loss).” Unrealized gains or losses on securities for which an other-than-temporary impairment has been recognized in earnings is tracked as a separate component of “Accumulated other comprehensive income (loss).” Prior to the adoption of this guidance in 2009, an other-than-temporary impairment recognized in earnings for debt securities was equal to the total difference between amortized cost and fair value at the time of impairment.

For debt securities, the split between the amount of an other-than-temporary impairment recognized in other comprehensive income and the net amount recognized in earnings is driven principally by assumptions regarding the amount and timing of projected cash flows. For mortgage-backed and asset-backed securities, cash flow estimates consider the payment terms of the underlying assets backing a particular security, including prepayment assumptions, and are based on data from widely accepted third-party data sources or internal estimates. In addition to prepayment assumptions, cash flow estimates include assumptions regarding the underlying collateral including default rates and recoveries, which vary based on the asset type and geographic location, as well as the vintage year of the security. For structured securities, the payment priority within the tranche structure is also considered. For all other debt securities, cash flow estimates are driven by assumptions regarding probability of default and estimates regarding timing and amount of recoveries associated with a default. The Company has developed these estimates using information based on its historical experience as well as using market observable data, such as industry analyst reports and forecasts, sector credit ratings and other data relevant to the collectability of a security, such as the general payment terms of the security and the security’s position within the capital structure of the issuer.

B-11

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

The new cost basis of an impaired security is not adjusted for subsequent increases in estimated fair value. In periods subsequent to the recognition of an other-than-temporary impairment, the impaired security is accounted for as if it had been purchased on the measurement date of the impairment. For debt securities, the discount (or reduced premium) based on the new cost basis may be accreted into net investment income in future periods based on prospective changes in cash flow estimates, to reflect adjustments to the effective yield.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, amounts due from banks, certain money market investments and other debt instruments with maturities of three months or less when purchased, other than cash equivalents that are included in “Trading account assets supporting insurance liabilities, at fair value.”

Deferred Policy Acquisition Costs

Costs that vary with and that are related primarily to the production of new insurance and annuity business are deferred to the extent such costs are deemed recoverable from future profits. Such deferred policy acquisition costs (“DAC”) include commissions, costs of policy issuance and underwriting, and variable field office expenses that are incurred in producing new business. In each reporting period, capitalized DAC is amortized to “General and administrative expense,” net of the accrual of imputed interest on DAC balances. DAC is subject to recoverability testing at the end of each reporting period to ensure that the capitalized amounts do not exceed the present value of anticipated gross profits, anticipated gross margins, or premiums less benefits and maintenance expenses, as applicable. DAC, for applicable products, is adjusted for the impact of unrealized gains or losses on investments as if these gains or losses had been realized, with corresponding credits or charges included in “Accumulated other comprehensive income (loss).”

For traditional participating life insurance included in the Closed Block, DAC is amortized over the expected life of the contracts (up to 45 years) in proportion to gross margins based on historical and anticipated future experience, which is evaluated regularly. The effect of changes in estimated gross margins on unamortized deferred acquisition costs is reflected in “General and administrative expenses” in the period such estimated gross margins are revised. Policy acquisition costs related to interest-sensitive and variable life products and fixed and variable deferred annuity products are deferred and amortized over the expected life of the contracts (periods ranging from 25 to 99 years) in proportion to gross profits arising principally from investment results, mortality and expense margins, surrender charges and the performance of hedging programs for embedded derivative features, based on historical and anticipated future experience, which is updated periodically. The Company uses a reversion to the mean approach to derive the future rate of return assumptions. However, if the projected future rate of return calculated using this approach is greater than the maximum future rate of return assumption, the maximum future rate of return is utilized. The effect of changes to estimated gross profits on unamortized deferred acquisition costs is reflected in “General and administrative expenses” in the period such estimated gross profits are revised. DAC related to non-participating traditional individual life insurance is amortized in proportion to gross premiums.

For group annuity contracts, acquisition expenses are deferred and amortized over the expected life of the contracts in proportion to gross profits. For group corporate- and trust-owned life insurance contracts, acquisition costs are deferred and amortized in proportion to lives insured. For group and individual long-term care contracts, acquisition expenses are deferred and amortized in proportion to gross premiums. For single premium immediate annuities with life contingencies, and single premium group annuities and single premium structured settlements with life contingencies, all acquisition costs are charged to expense immediately because generally all premiums are received at the inception of the contract. For funding agreement notes contracts, single premium structured settlement contracts without life contingencies, and single premium immediate annuities without life contingencies, acquisition expenses are deferred and amortized over the expected life of the contracts using the interest method. For other group life and disability insurance contracts and guaranteed investment contracts, acquisition costs are expensed as incurred.

B-12

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

For some products, policyholders can elect to modify product benefits, features, rights or coverages by exchanging a contract for a new contract or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract. These transactions are known as internal replacements. If policyholders surrender traditional life insurance policies in exchange for life insurance policies that do not have fixed and guaranteed terms, the Company immediately charges to expense the remaining unamortized DAC on the surrendered policies. For other internal replacement transactions, except those that involve the addition of a nonintegrated contract feature that does not change the existing base contract, the unamortized DAC is immediately charged to expense if the terms of the new policies are not substantially similar to those of the former policies. If the new terms are substantially similar to those of the earlier policies, the DAC is retained with respect to the new policies and amortized over the expected life of the new policies.

Separate Account Assets and Liabilities

Separate account assets are reported at fair value and represent segregated funds that are invested for certain policyholders, pension funds and other customers. The assets consist primarily of equity securities, fixed maturities, real estate related investments, real estate mortgage loans, short-term investments and derivative instruments. The assets of each account are legally segregated and are generally not subject to claims that arise out of any other business of the Company. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account liabilities primarily represent the contractholder’s account balance in separate account assets and to a lesser extent borrowings of the separate account. See Note 11 for additional information regarding separate account arrangements with contractual guarantees. The investment income and realized investment gains or losses from separate account assets generally accrue to the policyholders and are not included in the Company’s results of operations. Mortality, policy administration and surrender charges assessed against the accounts are included in “Policy charges and fee income.” Asset management fees charged to the accounts are included in “Other income.” Seed money that the Company invests in separate accounts is reported in the appropriate general account asset line. Investment income and realized investment gains or losses from seed money invested in separate accounts accrues to the Company and is included in the Company’s results of operations.

Other Assets and Other Liabilities

Other assets consist primarily of prepaid benefit costs, certain restricted assets, broker-dealer related receivables, trade receivables, valuation of business acquired, goodwill, deferred sales inducements, the Company’s investments in operating joint ventures, which include the Company’s investment in Wachovia Securities, which was sold on December 31, 2009, and the Company’s indirect investment in China Pacific Insurance (Group) Co., Ltd. (“China Pacific Group”), property and equipment, and reinsurance recoverables. Other liabilities consist primarily of trade payables, broker-dealer related payables, pension and other employee benefit liabilities, derivative liabilities, and reinsurance payables.

Property and equipment are carried at cost less accumulated depreciation. Depreciation is determined using the straight-line method over the estimated useful lives of the related assets, which generally range from 3 to 40 years.

As a result of certain acquisitions and the application of purchase accounting, the Company reports a financial asset representing the valuation of business acquired (“VOBA”). VOBA is determined by estimating the net present value of future cash flows from contracts in force in the acquired business at the date of acquisition. VOBA includes an explicit adjustment to reflect the cost of capital invested in the business. VOBA balances are subject to recoverability testing, in the manner in which it was acquired, at the end of each reporting period to ensure that the capitalized amounts do not exceed the present value of anticipated gross profits. The Company has established a VOBA asset primarily for its deferred annuity, defined contribution and defined benefit businesses. For acquired annuity contracts, future positive cash flows generally include fees and other charges assessed to the contracts as long as they remain in force as well as fees collected upon surrender, if applicable, while future negative cash flows include costs to administer contracts and benefit payments. In addition, future cash flows with respect to acquired annuity

B-13

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

business include the impact of future cash flows expected from the guaranteed minimum death and living benefit provisions, including the performance of hedging programs for embedded derivatives. For acquired defined contribution and defined benefits businesses, contract balances are projected using assumptions for add-on deposits, participant withdrawals, contract surrenders, and investment returns. Gross profits are then determined based on investment spreads and the excess of fees and other charges over the costs to administer the contracts. The Company amortizes VOBA over the effective life of the acquired contracts in “General and administrative expenses.” For acquired annuity contracts, VOBA is amortized in proportion to estimated gross profits arising from the contracts and anticipated future experience, which is evaluated regularly. For acquired defined contribution and defined benefit businesses, the majority of VOBA is amortized in proportion to estimated gross profits arising principally from investment spreads and fees in excess of actual expense based upon historical and estimated future experience, which is updated periodically. The remainder of VOBA is amortized based on estimated gross revenues, fees, or the change in policyholders’ account balances, as applicable. The effect of changes in estimated gross profits on unamortized VOBA is reflected in the period such estimates of expected future profits are revised. See Note 8 for additional information regarding VOBA.

As a result of certain acquisitions, the Company recognizes an asset for goodwill representing the excess of cost over the net fair value of the assets acquired and liabilities assumed. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within the reporting unit, whether acquired or organically grown, are available to support the value of the goodwill.

The Company tests goodwill for impairment annually as of December 31. The Company’s reporting units are the Financial Services Businesses and the Closed Block Business. The goodwill impairment analysis is a two-step test that is performed at the reporting unit level. The first step, used to identify potential impairment, involves comparing each reporting unit’s fair value to its carrying value including goodwill. If the fair value of a reporting unit exceeds its carrying value, the applicable goodwill is considered not to be impaired. If the carrying value exceeds fair value, there is an indication of a potential impairment and the second step of the test is performed to measure the amount of impairment.

The second step involves calculating an implied fair value of goodwill for each reporting unit for which the first step indicated impairment. The implied fair value of goodwill is determined in the same manner as the amount of goodwill recognized in a business combination, which is the excess of the fair value of the reporting unit, as determined in the first step, over the aggregate fair values of the individual assets, liabilities and identifiable intangibles as if the reporting unit was being acquired in a business combination. If the implied fair value of goodwill in the “pro forma” business combination accounting as described above exceeds the goodwill assigned to a reporting unit, there is no impairment. If the goodwill assigned to a reporting unit exceeds the implied fair value of the goodwill, an impairment charge is recorded in “General and administrative expenses” for the excess. An impairment loss recognized cannot exceed the amount of goodwill assigned to a reporting unit, and the loss establishes a new basis in the goodwill. Subsequent reversal of goodwill impairment losses is not permitted. Management is required to make significant estimates in determining the fair value of a reporting unit including, but not limited to: projected earnings, comparative market multiples, and the risk rate at which future net cash flows are discounted.

See Note 9 for additional information regarding goodwill.

The Company offers various types of sales inducements to policyholders related to fixed and variable deferred annuity contracts. The Company defers sales inducements and amortizes them over the anticipated life of the policy using the same methodology and assumptions used to amortize deferred policy acquisition costs. Sales inducements balances are subject to recoverability testing at the end of each reporting period to ensure that the capitalized amounts do not exceed the present value of anticipated gross profits. The Company records amortization of deferred sales inducements in “Interest credited to policyholders’ account balances.” See Note 11 for additional information regarding sales inducements.

B-14

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

The majority of the Company’s reinsurance recoverables and payables are receivables and corresponding payables associated with the reinsurance arrangements used to effect the Company’s acquisition of the retirement businesses of CIGNA. The remaining amounts relate to other reinsurance arrangements entered into by the Company. For each of its reinsurance contracts, the Company determines if the contract provides indemnification against loss or liability relating to insurance risk in accordance with applicable accounting standards. The Company reviews all contractual features, particularly those that may limit the amount of insurance risk to which the reinsurer is subject or features that delay the timely reimbursement of claims. See Note 13 for additional information about the Company’s reinsurance arrangements.

Investments in operating joint ventures are generally accounted for under the equity method. The carrying value of these investments is written down, or impaired, to fair value when a decline in value is considered to be other-than-temporary. The Company held an investment in Wachovia Securities which was sold on December 31, 2009. See Note 7 for additional information on investments in operating joint ventures.

Future Policy Benefits

The Company’s liability for future policy benefits is primarily comprised of the present value of estimated future payments to or on behalf of policyholders, where the timing and amount of payment depends on policyholder mortality or morbidity, less the present value of future net premiums. For individual traditional participating life insurance products, the mortality and interest rate assumptions applied are those used to calculate the policies’ guaranteed cash surrender values. For life insurance, other than individual traditional participating life insurance, and annuity and disability products, expected mortality and morbidity is generally based on the Company’s historical experience or standard industry tables including a provision for the risk of adverse deviation. Interest rate assumptions are based on factors such as market conditions and expected investment returns. Although mortality and morbidity and interest rate assumptions are “locked-in” upon the issuance of new insurance or annuity business with fixed and guaranteed terms, significant changes in experience or assumptions may require the Company to provide for expected future losses on a product by establishing premium deficiency reserves. Premium deficiency reserves, if required, are determined based on assumptions at the time the premium deficiency reserve is established and do not include a provision for the risk of adverse deviation. See Note 10 for additional information regarding future policy benefits.

The Company’s liability for future policy benefits also includes a liability for unpaid claims and claim adjustment expenses. The Company does not establish claim liabilities until a loss has occurred. However, unpaid claims and claim adjustment expenses includes estimates of claims that the Company believes have been incurred but have not yet been reported as of the balance sheet date. The Company’s liability for future policy benefits also includes net liabilities for guarantee benefits related to certain nontraditional long-duration life and annuity contracts, which are discussed more fully in Note 11, and certain unearned revenues.

Policyholders’ Account Balances

The Company’s liability for policyholders’ account balances represents the contract value that has accrued to the benefit of the policyholder as of the balance sheet date. This liability is generally equal to the accumulated account deposits, plus interest credited, less policyholder withdrawals and other charges assessed against the account balance. These policyholders’ account balances also include provision for benefits under non-life contingent payout annuities and certain unearned revenues. See Note 10 for additional information regarding policyholders’ account balances.

Policyholders’ Dividends

The Company’s liability for policyholders’ dividends includes its dividends payable to policyholders and its policyholder dividend obligation associated with the participating policies included in the Closed Block. The dividends payable for participating policies included in the Closed Block are determined at the end of each year for the following year by the Board of Directors of Prudential Insurance based on its statutory results, capital position, ratings, and the emerging experience of the Closed Block. The

B-15

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

policyholder dividend obligation represents amounts to be paid to Closed Block policyholders as an additional policyholder dividend unless otherwise offset by future Closed Block performance that is less favorable than originally expected, the components of which are discussed more fully in Note 12.

Contingent Liabilities

Amounts related to contingent liabilities are accrued if it is probable that a liability has been incurred and an amount is reasonably estimable. Management evaluates whether there are incremental legal or other costs directly associated with the ultimate resolution of the matter that are reasonably estimable and, if so, they are included in the accrual.

Insurance Revenue and Expense Recognition

Premiums from individual life products, other than interest-sensitive life contracts, and health insurance and long-term care products are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium (i.e., the portion of the gross premium required to provide for all expected future benefits and expenses) is deferred and recognized into revenue in a constant relationship to insurance in force. Benefits are recorded as an expense when they are incurred. A liability for future policy benefits is recorded when premiums are recognized using the net level premium method.

Premiums from non-participating group annuities with life contingencies, single premium structured settlements with life contingencies and single premium immediate annuities with life contingencies are recognized when due. When premiums are due over a significantly shorter period than the period over which benefits are provided, any gross premium in excess of the net premium is deferred and recognized into revenue in a constant relationship to the amount of expected future benefit payments. Benefits are recorded as an expense when they are incurred. A liability for future policy benefits is recorded when premiums are recognized using the net premium method.

Certain individual annuity contracts provide the holder a guarantee that the benefit received upon death or annuitization will be no less than a minimum prescribed amount. These benefits are accounted for as insurance contracts and are discussed in further detail in Note 11. The Company also provides contracts with certain living benefits which are considered embedded derivatives. These contracts are discussed in further detail in Note 11.

Amounts received as payment for interest-sensitive group and individual life contracts, deferred fixed annuities, structured settlements and other contracts without life contingencies, and participating group annuities are reported as deposits to “Policyholders’ account balances.” Revenues from these contracts are reflected in “Policy charges and fee income” consisting primarily of fees assessed during the period against the policyholders’ account balances for mortality charges, policy administration charges and surrender charges. In addition to fees, the Company earns investment income from the investment of policyholders’ deposits in the Company’s general account portfolio. Fees assessed that represent compensation to the Company for services to be provided in future periods and certain other fees are deferred and amortized into revenue over the life of the related contracts in proportion to estimated gross profits. Benefits and expenses for these products include claims in excess of related account balances, expenses of contract administration, interest credited to policyholders’ account balances and amortization of DAC.

For group life, other than interest-sensitive group life contracts, and disability insurance, premiums are recognized over the period to which the premiums relate in proportion to the amount of insurance protection provided. Claim and claim adjustment expenses are recognized when incurred.

Premiums, benefits and expenses are stated net of reinsurance ceded to other companies, except for amounts associated with certain modified coinsurance contracts which are reflected in the Company’s financial statements based on the application of the

B-16

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

deposit method of accounting. Estimated reinsurance recoverables and the cost of reinsurance are recognized over the life of the reinsured policies using assumptions consistent with those used to account for the underlying policies.

 Other Income

“Other income” includes asset management fees and securities and commodities commission revenues, which are recognized in the period in which the services are performed, interest earned on affiliated notes receivable, realized and unrealized gains and losses from investments classified as “trading” such as “Trading account assets supporting insurance liabilities” and “Other trading account assets,” and short-term investments that are marked-to-market through other income.

Foreign Currency

Assets and liabilities of foreign operations and subsidiaries reported in currencies other than U.S. dollars are translated at the exchange rate in effect at the end of the period. Revenues, benefits and other expenses are translated at the average rate prevailing during the period. The effects of translating the statements of operations and financial position of non-U.S. entities with functional currencies other than the U.S. dollar are included, net of related qualifying hedge gains and losses and income taxes, in “Accumulated other comprehensive income (loss).” Gains and losses from foreign currency transactions are reported in either “Accumulated other comprehensive income (loss)” or current earnings in “Other income” depending on the nature of the related foreign currency denominated asset or liability.

Derivative Financial Instruments

Derivatives are financial instruments whose values are derived from interest rates, foreign exchange rates, financial indices or the values of securities or commodities. Derivative financial instruments generally used by the Company include swaps, futures, forwards and options and may be exchange-traded or contracted in the over-the-counter market. Derivative positions are carried at fair value, generally by obtaining quoted market prices or through the use of valuation models. Values can be affected by changes in interest rates, foreign exchange rates, financial indices, values of securities or commodities, credit spreads, market volatility, expected returns and liquidity. Values can also be affected by changes in estimates and assumptions, including those related to counterparty behavior and nonperformance risk used in valuation models.

Derivatives are used in a non-dealer or broker capacity in insurance and treasury operations to manage the characteristics of the Company’s asset/liability mix, to manage the interest rate and currency characteristics of assets or liabilities and to mitigate the risk of a diminution, upon translation to U.S. dollars, of net investments in foreign operations resulting from unfavorable changes in currency exchange rates. Additionally, derivatives may be used to seek to reduce exposure to interest rate, credit, foreign currency and equity risks associated with assets held or expected to be purchased or sold, and liabilities incurred or expected to be incurred. As discussed in detail below and in Note 21, all realized and unrealized changes in fair value of non-dealer or broker related derivatives, with the exception of the effective portion of cash flow hedges and effective hedges of net investments in foreign operations, are recorded in current earnings. Cash flows from these derivatives are reported in the operating, investing, or financing activities sections in the Consolidated Statements of Cash Flows.

Derivatives are also used in a derivative dealer or broker capacity in the Company’s securities operations to meet the needs of clients by structuring transactions that allow clients to manage their exposure to interest rates, foreign exchange rates, indices or prices of securities and commodities. Realized and unrealized changes in fair value of derivatives used in these dealer related operations are included in “Other income” in the periods in which the changes occur. Cash flows from such derivatives are reported in the operating activities section of the Consolidated Statements of Cash Flows.

Derivatives are recorded either as assets, within “Other trading account assets,” or “Other long-term investments,” or as liabilities, within “Other liabilities,” in the Consolidated Statements of Financial Position, except for embedded derivatives which

B-17

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

are recorded in the Consolidated Statements of Financial Position with the associated host contract. The Company nets the fair value of all derivative financial instruments with counterparties for which a master netting arrangement has been executed.

The Company designates derivatives as either (1) a hedge of the fair value of a recognized asset or liability or unrecognized firm commitment (“fair value” hedge); (2) a hedge of a forecasted transaction or of the variability of cash flows to be received or paid related to a recognized asset or liability (“cash flow” hedge); (3) a foreign-currency fair value or cash flow hedge (“foreign currency” hedge); (4) a hedge of a net investment in a foreign operation; or (5) a derivative that does not qualify for hedge accounting.

To qualify for hedge accounting treatment, a derivative must be highly effective in mitigating the designated risk of the hedged item. Effectiveness of the hedge is formally assessed at inception and throughout the life of the hedging relationship. Even if a derivative qualifies for hedge accounting treatment, there may be an element of ineffectiveness of the hedge. Under such circumstances, the ineffective portion is recorded in “Realized investment gains (losses), net.”

The Company formally documents at inception all relationships between hedging instruments and hedged items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes linking all derivatives designated as fair value, cash flow, or foreign currency hedges to specific assets and liabilities on the balance sheet or to specific firm commitments or forecasted transactions. Hedges of a net investment in a foreign operation are linked to the specific foreign operation.

When a derivative is designated as a fair value hedge and is determined to be highly effective, changes in its fair value, along with changes in the fair value of the hedged asset or liability (including losses or gains on firm commitments), are reported on a net basis in the income statement, generally in “Realized investment gains (losses), net.” When swaps are used in hedge accounting relationships, periodic settlements are recorded in the same income statement line as the related settlements of the hedged items.

When a derivative is designated as a cash flow hedge and is determined to be highly effective, changes in its fair value are recorded in “Accumulated other comprehensive income (loss)” until earnings are affected by the variability of cash flows being hedged (e.g., when periodic settlements on a variable-rate asset or liability are recorded in earnings). At that time, the related portion of deferred gains or losses on the derivative instrument is reclassified and reported in the income statement line item associated with the hedged item.

When a derivative is designated as a foreign currency hedge and is determined to be highly effective, changes in its fair value are recorded either in current period earnings if the hedge transaction is a fair value hedge (e.g., a hedge of a recognized foreign currency asset or liability) or in “Accumulated other comprehensive income (loss)” if the hedge transaction is a cash flow hedge (e.g., a foreign currency denominated forecasted transaction). When a derivative is used as a hedge of a net investment in a foreign operation, its change in fair value, to the extent effective as a hedge, is recorded in the cumulative translation adjustment account within “Accumulated other comprehensive income (loss).”

If it is determined that a derivative no longer qualifies as an effective fair value or cash flow hedge or management removes the hedge designation, the derivative will

B-18

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

continue to be carried on the balance sheet at its fair value, with changes in fair value recognized currently in “Realized investment gains (losses), net.” The asset or liability under a fair value hedge will no longer be adjusted for changes in fair value and the existing basis adjustment is amortized to the income statement line associated with the asset or liability. The component of “Accumulated other comprehensive income (loss)” related to discontinued cash flow hedges is amortized to the income statement line associated with the hedged cash flows consistent with the earnings impact of the original hedged cash flows.

When hedge accounting is discontinued because the hedged item no longer meets the definition of a firm commitment, or because it is probable that the forecasted transaction will not occur by the end of the specified time period, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recognized currently in “Realized investment gains (losses), net.” Any asset or liability that was recorded pursuant to recognition of the firm commitment is removed from the balance sheet and recognized currently in “Realized investment gains (losses), net.” Gains and losses that were in “Accumulated other comprehensive income (loss)” pursuant to the hedge of a forecasted transaction are recognized immediately in “Realized investment gains (losses), net.”

If a derivative does not qualify for hedge accounting, all changes in its fair value, including net receipts and payments, are included in “Realized investment gains (losses), net” without considering changes in the fair value of the economically associated assets or liabilities.

The Company is a party to financial instruments that contain derivative instruments that are “embedded” in the financial instruments, the identification of which involves judgment. At inception, the Company assesses whether the economic characteristics of the embedded derivative are clearly and closely related to the economic characteristics of the remaining component of the financial instrument (i.e., the host contract) and whether a separate instrument with the same terms as the embedded instrument would meet the definition of a derivative instrument. When it is determined that (1) the embedded derivative possesses economic characteristics that are not clearly and closely related to the economic characteristics of the host contract, and (2) a separate instrument with the same terms would qualify as a derivative instrument, the embedded derivative is separated from the host contract, carried at fair value, and changes in its fair value are included in “Realized investment gains (losses), net.” For certain financial instruments that contain an embedded derivative that otherwise would need to be bifurcated and reported at fair value, the Company may elect to classify the entire instrument as a trading account asset and report it within “Other trading account assets,” at fair value.

Short-Term and Long-Term Debt

Liabilities for short-term and long-term debt are primarily carried at an amount equal to unpaid principal balance, net of unamortized discount or premium. Original-issue discount or premium and debt-issue costs are recognized as a component of interest expense over the period the debt is expected to be outstanding, using the interest method of amortization. Long-term debt in consolidated real estate investment companies is recorded at fair value in accordance with industry standards. Short-term debt is debt coming due in the next twelve months, including that portion of debt otherwise classified as long-term. The short-term debt caption may exclude short-term items the Company intends to refinance on a long-term basis in the near term. See Note 14 for additional information regarding short-term and long-term debt.

Income Taxes

The Company and its eligible domestic subsidiaries file a consolidated federal income tax return that includes both life insurance companies and non-life insurance companies. Subsidiaries operating outside the U.S. are taxed, and income tax expense is recorded, based on applicable foreign statutes.

Deferred income taxes are recognized, based on enacted rates, when assets and liabilities have different values for financial statement and tax reporting purposes. A valuation allowance is recorded to reduce a deferred tax asset to the amount expected to be realized.

The Company’s liability for income taxes includes the liability for unrecognized tax benefits and interest and penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing jurisdictions. Audit periods remain open for review until the statute of limitations has passed. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards (“tax attributes”), the statute of limitations does not close, to the extent of these tax attributes, until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income

B-19

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

taxes. The Company classifies all interest and penalties related to tax uncertainties as income tax expense. See Note 18 for additional information regarding income taxes.

Adoption of New Accounting Pronouncements

In January 2010, the FASB issued updated guidance that clarifies existing guidance on accounting and reporting by an entity that experiences a decrease in ownership of a subsidiary that is a business. The updated guidance states that a decrease in ownership applies to a subsidiary or group of assets that is a business, but does not apply to a sale of in-substance real estate even if it involves a business, such as an ownership interest in a partnership whose only asset is operating real estate. This guidance also affects accounting and reporting by an entity that exchanges a group of assets that constitutes a business for an equity interest in another entity. The updated guidance also expands disclosures about fair value measurements relating to retained investments in a deconsolidated subsidiary or a preexisting interest held by an acquirer in a business combination. The updated guidance is effective in the first interim or annual reporting period ending on or after December 15, 2009, and is applied on a retrospective basis to the first period that the Company adopted the existing guidance, which was as of January 1, 2009. The Company’s adoption of this updated guidance effective December 31, 2009 did not have a material effect on the Company’s consolidated financial position, results of operations, or financial statement disclosures.

In September 2009, the FASB issued updated guidance for the fair value measurement of investments in certain entities that calculate net asset value per share including certain alternative investment funds. This guidance allows companies to determine the fair value of such investments using net asset value (“NAV”) if the fair value of the investment is not readily determinable and the investee entity issues financial statements in accordance with measurement principles for investment companies. Use of this practical expedient is prohibited if it is probable the investment will be sold at something other than NAV. This guidance also requires new disclosures for each major category of alternative investments. This guidance does not apply to the Company’s investments in joint ventures and limited partnerships that are generally accounted for under the equity method or cost method. It is effective for the first annual or interim reporting period ending after December 15, 2009. The Company’s adoption of this guidance effective December 31, 2009 did not have a material effect on the Company’s consolidated financial position, results of operations, or financial statement disclosures.

In August 2009, the FASB issued updated guidance for the fair value measurement of liabilities. This guidance provides clarification on how to measure fair value in circumstances in which a quoted price in an active market for the identical liability is not available. This guidance also clarifies that restrictions preventing the transfer of a liability should not be considered as a separate input or adjustment in the measurement of fair value. The Company adopted this guidance effective with the annual reporting period ended December 31, 2009, and the adoption did not have a material impact on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

In June 2009, the FASB issued authoritative guidance for the FASB’s Accounting Standards Codification TM as the source of authoritative U.S. GAAP. The Codification is not intended to change U.S. GAAP but is a new structure which organizes accounting pronouncements by accounting topic. This guidance is effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Company’s adoption of this guidance effective with the reporting period ending December 31, 2009 impacts the way the Company references U.S. GAAP standards in the financial statements.

In May 2009, the FASB issued authoritative guidance for subsequent events, which addresses the accounting for and disclosure of subsequent events not addressed in other applicable GAAP, including disclosure of the date through which subsequent events have been evaluated. This guidance is effective for interim or annual periods ending after June 15, 2009. The Company’s adoption of this guidance effective with the period ending December 31, 2009 did not have a material effect on the Company’s consolidated financial position or results of operations. The required disclosure of the date through which subsequent events have been evaluated is provided in Note 1.

B-20

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

In April 2009, the FASB revised the authoritative guidance for the recognition and presentation of other-than-temporary impairments. This new guidance amends the other-than-temporary impairment guidance for debt securities and expands the presentation and disclosure requirements of other-than-temporary impairments on debt and equity securities in the financial statements. This guidance also requires that the required annual disclosures for debt and equity securities be made for interim reporting periods. This guidance does not amend existing recognition and measurement guidance related to other-than-temporary impairments of equity securities. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, with early adoption permitted for periods ending after March 15, 2009. The Company early adopted this guidance effective January 1, 2009, which resulted in a net after-tax increase to retained earnings and decrease to accumulated other comprehensive income (loss) of $575 million. The disclosures required by this new guidance are provided in Note 4. See “Investments and Investment-Related Liabilities” above for more information.

In April 2009, the FASB revised the authoritative guidance for fair value measurements and disclosures to provide guidance on (1) estimating the fair value of an asset or liability if there was a significant decrease in the volume and level of trading activity for these assets or liabilities, and (2) identifying transactions that are not orderly. Further, this new guidance requires additional disclosures about fair value measurements in interim and annual periods. This guidance is effective for interim and annual reporting periods ending after June 15, 2009, and shall be applied prospectively. Early adoption is permitted for periods ending after March 15, 2009. The Company’s early adoption of this guidance effective January 1, 2009 did not have a material effect on the Company’s consolidated financial position or results of operations. The disclosures required by this revised guidance are provided in Note 19.

In April 2009, the FASB revised the authoritative guidance for the accounting for business combinations. This new guidance requires an asset acquired or liability assumed in a business combination that arises from a contingency to be recognized at fair value at the acquisition date, if the acquisition date fair value of that asset or liability can be determined during the measurement period. If the acquisition date fair value of an asset acquired or liability assumed in a business combination that arises from a contingency cannot be determined during the measurement period, the asset or liability shall be recognized at the acquisition date using the authoritative guidance related to accounting for contingencies. This new guidance also amends disclosure requirements. This guidance is effective for assets or liabilities arising from contingencies in business combinations for which the acquisition date is on or after January 1, 2009. The Company’s adoption of this guidance effective January 1, 2009 did not have a material effect on the Company’s consolidated financial position or results of operations.

In January 2009, the FASB issued new authoritative guidance that revised other-than-temporary-impairment guidance for beneficial interests in securitized financial assets that are within the scope of the original guidance. The new guidance is effective for interim and annual reporting periods ending after December 15, 2008. The Company’s adoption of this new guidance effective December 31, 2008, did not have a material effect on the Company’s consolidated financial position or results of operations. The required disclosures are provided in Note 4.

In December 2008, the FASB revised the authoritative guidance for employers’ disclosures about postretirement benefit plan assets. This new guidance requires additional disclosures about the components of plan assets, investment strategies for plan assets, significant concentrations of risk within plan assets, and requires disclosures regarding the fair value measurement of plan assets. This guidance is effective for fiscal years ending after December 15, 2009. The Company adopted this guidance effective December 31, 2009. The required disclosures are provided in Note 17.

In December 2008, the FASB revised the authoritative guidance for disclosures by public entities (enterprises) about transfers of financial assets and interests in variable interest entities (“VIE’s”). This new guidance requires enhanced disclosures about transfers of financial assets and interests in VIE’s. This guidance is effective for interim and annual reporting periods ending after December 15, 2008. The Company adopted this guidance effective December 31, 2008. Since this guidance requires only additional disclosures concerning transfers of financial assets and interests in VIE’s, adoption of the guidance did not affect the Company’s consolidated financial position or results of operations. The disclosures required by this guidance are provided in Note 5.

B-21

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

In October 2008, the FASB revised the authoritative guidance on determining the fair value of a financial asset when the market for that asset is not active. This guidance clarifies the application of fair value measurements in a market that is not active and applies to financial assets within the scope of accounting pronouncements that require or permit fair value measurements. The guidance was effective upon issuance, including prior periods for which financial statements had not been issued. The Company’s adoption of this guidance effective September 30, 2008 did not have a material effect on the Company’s consolidated financial position or results of operations.

In September 2008, the FASB issued revised authoritative guidance for disclosures about credit derivatives and certain guarantees that amends existing guidance on this subject. This new guidance requires sellers of credit derivatives and certain guarantees to disclose (a) the nature of the credit derivative, the reason(s) for entering into the credit derivative, approximate term, performance triggers, and the current status of the performance risk; (b) the undiscounted maximum potential amount of future payments the seller could be required to make before considering any recoveries from recourse provisions or collateral; (c) the credit derivative’s fair value; and (d) the nature of any recourse provisions and any collateral assets held to ensure performance. The new guidance also requires the above disclosures for hybrid instruments that contain embedded derivatives and requires disclosure of the current status of the guarantee’s performance risk. This new guidance is effective for interim and annual reporting periods ending after December 15, 2008. The Company’s adoption of this guidance effective December 31, 2008 did not have a material effect on the Company’s consolidated financial position or results of operations. The disclosures required by this guidance are provided in Note 21.

In September 2008, the FASB Emerging Issues Task Force (“EITF”) reached consensus on an issuer’s accounting for liabilities measured at fair value with a third-party credit enhancement. This consensus concluded that (a) the issuer of a liability (including debt) with a third-party credit enhancement that is inseparable from the liability, shall not include the effect of the credit enhancement in the fair value measurement of the liability; (b) the issuer shall disclose the existence of any third-party credit enhancement on such liabilities, and (c) in the period of adoption the issuer shall disclose the valuation techniques used to measure the fair value of such liabilities and disclose any changes from valuation techniques used in prior periods. The Company’s adoption of this guidance on a prospective basis effective January 1, 2009 did not have a material effect on the Company’s consolidated financial position or results of operations.

In April 2008, the FASB revised the authoritative guidance for the determination of the useful life of intangible assets. This new guidance amends the list of factors an entity should consider in developing renewal or extension assumptions used to determine the useful life of recognized intangible assets. This guidance is effective for fiscal years and interim periods beginning after December 15, 2008, with the guidance for determining the useful life of a recognized intangible asset being applied prospectively to intangible assets acquired after the effective date, and the disclosure requirements being applied prospectively to all intangible assets recognized as of, and after, the effective date. The Company’s adoption of this guidance effective January 1, 2009 did not have a material effect on the Company’s consolidated financial position or results of operations.

In March 2008, the FASB issued authoritative guidance for derivative instruments and hedging activities which amends and expands the disclosure requirements for derivative instruments and hedging activities by requiring companies to provide enhanced disclosures about (a) how and why an entity uses derivative instruments, (b) how derivative instruments and related hedged items are accounted for, and (c) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. The Company’s adoption of this guidance effective January 1, 2009 did not have a material effect on the Company’s consolidated financial position or results of operations. The required disclosures are provided in Note 21.

In February 2008, the FASB revised the authoritative guidance for the accounting for transfers of financial assets and repurchase financing transactions. The new guidance provides recognition and derecognition guidance for a repurchase financing

B-22

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

transaction, which is a repurchase agreement that relates to a previously transferred financial asset between the same counterparties, that is entered into contemporaneously with or in contemplation of, the initial transfer. The guidance is effective for fiscal years beginning after November 15, 2008. The Company’s adoption of this guidance on a prospective basis effective January 1, 2009 did not have a material effect on the Company’s consolidated financial position and results of operations.

In February 2008, the FASB revised the authoritative guidance which delays the effective date related to fair value measurements and disclosures for nonfinancial assets and nonfinancial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis (at least annually), to fiscal years beginning after November 15, 2008, and interim periods within those fiscal years. The Company’s adoption of this guidance effective January 1, 2009 did not have a material effect on the Company’s consolidated financial position or results of operations.

In January 2008, the FASB issued authoritative guidance for application of the shortcut method to hedge accounting with respect to the conditions that must be met to apply the shortcut method for assessing hedge effectiveness. This new guidance was effective for hedging relationships designated on or after January 1, 2008. The Company’s adoption of this guidance effective January 1, 2008 did not have a material effect on the Company’s consolidated financial position or results of operations.

In December 2007, the FASB issued authoritative guidance for business combinations which addresses the accounting for business acquisitions, is effective for fiscal years beginning on or after December 15, 2008, with early adoption prohibited, and generally applies to business acquisitions completed after December 31, 2008. Among other things, the new guidance requires that all acquisition-related costs be expensed as incurred, and that all restructuring costs related to acquired operations be expensed as incurred. This new guidance also addresses the current and subsequent accounting for assets and liabilities arising from contingencies acquired or assumed and, for acquisitions both prior and subsequent to December 31, 2008, requires the acquirer to recognize changes in the amount of its deferred tax benefits that are recognizable because of a business combination either in income from continuing operations in the period of the combination or directly in contributed capital, depending on the circumstances. The Company’s adoption of this guidance effective January 1, 2009 did not have a material effect on the Company’s consolidated financial position or results of operations, but may have an effect on the accounting for future business combinations.

In December 2007, the FASB issued authoritative guidance for noncontrolling interests in consolidated financial statements. This guidance changes the accounting for minority interests, which are recharacterized as noncontrolling interests and classified by the parent company as a component of equity. Upon adoption, this guidance requires retroactive adoption of the presentation and disclosure requirements for existing noncontrolling interests and prospective adoption for all other requirements. The Company’s adoption of this guidance effective January 1, 2009 did not have a material effect on the Company’s consolidated financial position or results of operations, but did affect financial statement presentation and disclosure.  Noncontrolling interests, previously reported as a liability, are now required to be reported as a separate component of equity on the statement of financial position. In addition, income attributable to the noncontrolling interests, which was previously reported as an expense in general and administrative expenses and reflected within income from continuing operations is now reported as a separate amount below net income.

In April 2007, the FASB revised the authoritative guidance for offsetting of amounts related to certain contracts. The new guidance permits companies to offset cash collateral receivables or payables with net derivative positions under certain circumstances. This guidance is effective for fiscal years beginning after November 15, 2007 and is required to be applied retrospectively to financial statements for all periods presented. The Company’s adoption of this guidance effective January 1, 2008 did not have a material effect on the Company’s consolidated financial position or results of operations.

In February 2007, the FASB issued authoritative guidance on the fair value option for financial assets and financial liabilities. This guidance provides companies with an option to report selected financial assets and liabilities at fair value, with the

B-23

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

associated changes in fair value reflected in the Consolidated Statements of Operations. The Company’s adoption of this guidance effective January 1, 2008 did not have a material effect on the Company’s consolidated financial position of results of operations.

In September 2006, the FASB issued authoritative guidance on fair value measurements. This guidance defines fair value, establishes a framework for measuring fair value, and expands disclosures about fair value measurements. This guidance does not change which assets and liabilities are required to be recorded at fair value, but the application of this guidance could change practices in determining fair value. The Company adopted this guidance effective January 1, 2008. See Note 19 for more information on fair value measurements guidance.

In September 2006, the FASB issued authoritative guidance for employers’ accounting for defined benefit pension and other postretirement plans, which amended previous guidance. This revised guidance requires an employer on a prospective basis to recognize the overfunded or underfunded status of its defined benefit pension and postretirement plans as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through other comprehensive income. The Company adopted this guidance, along with the required disclosures, on December 31, 2006. The revised guidance also requires an employer on a prospective basis to measure the funded status of its plans as of its fiscal year-end. This requirement is effective for fiscal years ending after December 15, 2008. The Company adopted this guidance on December 31, 2008 and the impact of changing from a September 30 measurement date to a December 31 measurement date was a net after-tax increase to retained earnings of $27 million.

In July 2006, the FASB revised the authoritative guidance for accounting for a change or projected change in the timing of cash flows relating to income taxes generated by a leveraged lease transaction. The new guidance indicates that a change or projected change in the timing of cash flows relating to income taxes generated by a leveraged lease would require a recalculation of cumulative and prospective income recognition associated with the transaction. The new guidance is effective for fiscal years beginning after December 15, 2006. The Company adopted the new guidance on January 1, 2007 and the adoption resulted in a net after-tax reduction to retained earnings of $84 million, as of January 1, 2007.

In June 2006, the FASB revised the authoritative guidance for accounting for uncertainty in income taxes. See Note 18 for details regarding the adoption of this new guidance on January 1, 2007.

In February 2006, the FASB issued authoritative guidance on accounting for certain hybrid instruments. This guidance eliminates an exception from the requirement to bifurcate an embedded derivative feature from beneficial interests in securitized financial assets. The Company has used this exception for investments the Company has made in securitized financial assets in the normal course of operations, and thus previous to the adoption of this standard has not had to consider whether such investments contain an embedded derivative. The new requirement to identify embedded derivatives in beneficial interests will be applied on a prospective basis only to beneficial interests acquired, issued, or subject to certain remeasurement conditions after the adoption of the guidance. This statement also provides an election, on an instrument by instrument basis, to measure at fair value an entire hybrid financial instrument that contains an embedded derivative requiring bifurcation, rather than measuring only the embedded derivative on a fair value basis. If the fair value election is chosen, changes in unrealized gains and losses are reflected in the Consolidated Statements of Operations. The Company’s adoption of this guidance effective January 1, 2007 did not have a material effect on the Company’s consolidated financial position or results of operations.

In September 2005, the Accounting Standards Executive Committee (“AcSEC”) of the American Institute of Certified Public Accountants issued authoritative guidance on accounting by insurance enterprises for deferred acquisition costs in connection with modifications or exchanges of insurance contracts. This guidance tells insurance enterprises how to account for deferred acquisition costs, including deferred policy acquisition costs, valuation of business acquired and deferred sales inducements, on internal replacements of certain insurance and investment contracts. The guidance defines an internal replacement as a modification in product benefits, features, rights, or coverages that occurs by the exchange of a contract for a new contract, or by amendment, endorsement, or rider to a contract, or by the election of a feature or coverage within a contract, and was effective

B-24

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

for internal replacements occurring in fiscal years beginning after December 15, 2006. The Company adopted this guidance on January 1, 2007, which resulted in a net after-tax reduction to retained earnings of $10 million.

Future Adoption of New Accounting Pronouncements

In June 2009, the FASB issued authoritative guidance which changes the analysis required to determine whether or not an entity is a variable interest entity (“VIE”). In addition, the guidance changes the determination of the primary beneficiary of a VIE from a quantitative to a qualitative model. Under the new qualitative model, the primary beneficiary must have both the ability to direct the activities of the VIE and the obligation to absorb either losses or gains that could be significant to the VIE. This guidance also changes when reassessment is needed, as well as requires enhanced disclosures, including the effects of a company’s involvement with a VIE on its financial statements. This guidance is effective for interim and annual reporting periods beginning after November 15, 2009. The Company’s adoption of this guidance effective January 1, 2010 is not expected to have a material effect on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

In June 2009, the FASB issued authoritative guidance which changes the accounting for transfers of financial assets, and is effective for transfers of financial assets occurring in interim and annual reporting periods beginning after November 15, 2009.  It removes the concept of a qualifying special-purpose entity (“QSPE”) from the guidance for transfers of financial assets and removes the exception from applying the guidance for consolidation of variable interest entities to qualifying special-purpose entities. It changes the criteria for achieving sale accounting when transferring a financial asset and changes the initial recognition of retained beneficial interests. The guidance also defines “participating interest” to establish specific conditions for reporting a transfer of a portion of a financial asset as a sale. Disclosure provisions will be applied to transfers that occurred both before and after January 1, 2010. The Company’s adoption of this guidance effective January 1, 2010 is not expected to have a material effect on the Company’s consolidated financial position, results of operations, and financial statement disclosures.

3. ACQUISITIONS AND DISPOSITIONS

Sale of investment in Wachovia Securities

On December 31, 2009 the Company completed the sale of its minority joint venture interest in Wachovia Securities. See Note 7 for more details on this transaction.

Acquisition of a portion of Union Bank of California’s Retirement Business

On December 31, 2007, the Company acquired a portion of the Union Bank of California, N.A’s retirement business for $100 million of cash consideration. In recording the transaction, the entire purchase price was allocated to other intangibles, which are reflected in “Other assets.”

Discontinued Operations
		Income (loss) from discontinued businesses, including charges upon disposition, for the years ended December 31, are as
follows:
			2009		2008		2007
			(in millions)
	Real estate investments sold or held for sale(1)		$	1	$	2	$	40
	International securities operations(2)			(1)		(1)		8

B-25

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Healthcare operations(3)				-		2		14
	Income from discontinued operations before income taxes			-		3		62
		Income tax benefit		-		(2)		(2)
	Income from discontinued operations, net of taxes		$	-	$	5	$	64

The Company’s Consolidated Statements of Financial Position include total assets and total liabilities related to discontinued businesses of $18 million and $5 million, respectively, at December 31, 2009 and $45 million and $8 million, respectively, at December 31, 2008.

(1)   Reflects the income or loss from discontinued real estate investments, primarily related to gains recognized on the sale of real estate properties.

(2)   International securities operations include the European retail transaction-oriented stockbrokerage and related activities of Prudential Securities Group, Inc. The year ended December 31, 2007 includes a $21 million tax benefit associated with the discontinued international securities operations.

(3)   The sale of the Company’s healthcare business to Aetna was completed in 1999. The loss the Company previously recorded upon the disposal of its healthcare business was reduced in each of the years ended December 31, 2008 and 2007. The reductions were primarily the result of favorable resolution of certain legal, regulatory and contractual matters.

Charges recorded in connection with the disposals of businesses include estimates that are subject to subsequent adjustment.

4. INVESTMENTS

Fixed Maturities and Equity Securities

The following tables provide information relating to fixed maturities and equity securities (excluding investments classified as trading) at December 31:

	2009
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Other-than-temporary impairments  in AOCI (3)
	(in millions)
Fixed maturities, available for sale
U.S. Treasury securities and obligations of U.S. government authorities and agencies	$	6,635	$	383	$	300		6,718	$	—
Obligations of U.S. states and their political subdivisions		1,304		22		42		1,284		—
Foreign government bonds		1,896		279		11		2,164		1
Corporate securities		65,739		3,622		1,217		68,144		(43)
Asset-backed securities (1)		11,353		117		2,327		9,143		(1,581)
Commercial mortgage-backed securities		9,926		178		151		9,953		—
Residential mortgage-backed securities (2)		8,503		358		59		8,802		(11)
Total fixed maturities, available for sale	$	105,356	$	4,959	$	4,107		106,208	$	(1,634	)
Equity securities, available for sale	$	3,996	$	940	$	80	$	4,856

B-26

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

(1)Includes credit tranched securities collateralized by sub-prime mortgages, auto loans, credit cards, education loans, and other asset types.

(2)Includes publicly traded agency pass-through securities and collateralized mortgage obligations.

(3)Represents the amount of other-than-temporary impairment losses in “Accumulated other comprehensive income (loss),” or “AOCI,” which, from January 1, 2009, were not included in earnings under new authoritative accounting guidance.  Amount excludes $482 million of net unrealized gains on impaired securities relating to changes in the value of such securities subsequent to the impairment measurement date.

B-27

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

	2008
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value
	(in millions)
Fixed maturities, available for sale
U.S. Treasury securities and obligations of U.S. government authorities       and agencies	$	5,470	$	1,329	$	2	$	6,797
Obligations of U.S. states and their political subdivisions		803		26		12		817
Foreign government bonds		1,812		351		61		2,102
Corporate securities		66,941		1,285		7,295		60,931
Asset-backed securities		14,172		99		3,885		10,386
Commercial mortgage-backed securities		10,206		4		1,835		8,375
Residential mortgage-backed securities		7,663		315		130		7,848
Total fixed maturities, available for sale	$	107,067	$	3,409	$	13,220	$	97,256
Equity securities, available for sale	$	4,378	$	239	$	987	$	3,630

The amortized cost and fair value of fixed maturities by contractual maturities at December 31, 2009, is as follows:

		Available for Sale
		Amortized Cost		Fair Value
		(in millions)
Due in one year or less	$	3,972	$	4,015
Due after one year through five years		21,323		22,162
Due after five years through ten years		22,366		23,362
Due after ten years		27,913		28,771
Asset-backed securities		11,353		9,143
Commercial mortgage-backed securities		9,926		9,953
Residential mortgage-backed securities		8,503		8,802
Total	$	105,356	$	106,208

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Asset-backed, commercial mortgage-backed, and residential mortgage-backed securities are shown separately in the table above, as they are not due at a single maturity date.

The following table depicts the sources of fixed maturity proceeds and related gross investment gains (losses), as well as losses on impairments of both fixed maturities and equity securities:

		2009		2008				2007
	(in millions)
Fixed maturities, available for sale:
Proceeds from sales	$	12,133		$	51,029		$		73,289
Proceeds from maturities/repayments		14,295			9,753				8,746
Gross investment gains from sales, prepayments and maturities		510			715				715
Gross investment losses from sales and maturities		(303	)		(524	)			(428	)
Fixed maturity and equity security impairments:
Net writedowns for other-than-temporary impairment losses on fixed maturities recognized in earnings(1)	$	(1,333	)	$	(2,060	)	$		(149	)
Writedowns for impairments of equity securities		(724	)		(717	)			(35	)

(1)   Effective with the adoption of new authoritative guidance on January 1, 2009, excludes the portion of other-than-temporary impairments recorded in “Other comprehensive income (loss),” representing any difference between the fair value of the impaired debt security and the net present value of its projected future cash flows at the time of impairment.

B-28

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

As discussed in Note 2, a portion of certain other-than-temporary impairment (“OTTI”) losses on fixed maturity securities are recognized in “Other comprehensive income (loss)” (“OCI”). The net amount recognized in earnings (“credit loss impairments”) represents the difference between the amortized cost of the security and the net present value of its projected future cash flows discounted at the effective interest rate implicit in the debt security prior to impairment. Any remaining difference between the fair value and amortized cost is recognized in OCI. The following table sets forth the amount of pre-tax credit loss impairments on fixed maturity securities held by the Company as of the dates indicated, for which a portion of the OTTI loss was recognized in OCI, and the corresponding changes in such amounts for the periods indicated.

Credit losses recognized in earnings on fixed maturity securities held by the Company for which a portion of the OTTI loss was recognized in OCI		Year Ended December 31, 2009
		(in millions)
Balance, beginning of period	$	—
Credit losses remaining in retained earnings related to adoption of new authoritative guidance on January 1, 2009		580
Credit loss impairments previously recognized on securities which matured, paid down, prepaid or were sold during the period		(240	)
Credit loss impairments previously recognized on securities impaired to fair value during the period (1)		(7	)
Credit loss impairment recognized in the current period on securities not previously impaired		570
Additional credit loss impairments recognized in the current period on securities previously impaired		623
Increases due to the passage of time on previously recorded credit losses		35
Accretion of credit loss impairments previously recognized due to an increase in cash flows expected to be collected		(41	)
Balance, December 31, 2009	$	1,520

(1)   Represents circumstances where the Company determined in the current period that it intends to sell the security or it is more likely than not that it will be required to sell the security before recovery of the security’s amortized cost.

Trading Account Assets Supporting Insurance Liabilities

The following table sets forth the composition of “Trading account assets supporting insurance liabilities” at December 31:

	2009				2008
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)				(in millions)
Short-term investments and cash equivalent	$	725	$	725	$	1,232	$	1,232
Fixed maturities:
Corporate securities		9,117		9,418		8,803		7,963
Commercial mortgage-backed securities		1,899		1,893		2,335		2,092
Residential mortgage-backed securities		1,434		1,432		708		684
Asset-backed securities		1,022		857		915		635
Foreign government bonds		104		106		8		8
U.S. government authorities and agencies and obligations of U.S. states		91		87		34		35
Total fixed maturities		13,667		13,793		12,803		11,417
Equity securities		164		121		163		68
Total trading account assets supporting insurance liabilities	$	14,556	$	14,639	$	14,198	$	12,717

The net change in unrealized gains (losses) from trading account assets supporting insurance liabilities still held at period end, recorded within “Other income” were $1,564 million, $(1,362) million and $139 million during the years ended December 31, 2009, 2008 and 2007, respectively.

B-29

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Other Trading Account Assets

The following table sets forth the composition of “Other trading account assets” at December 31:

	2009				2008
	Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(in millions)				(in millions)
Short-term investments and cash equivalents……..	$	—	$	—	$	1	$	1
Fixed maturities:
Asset-backed securities		178		183		44		29
Residential mortgage-backed securities		—		—		—		—
Corporate securities		152		169		193		167
Commercial mortgage-backed securities		50		52		50		39
U.S. government authorities and agencies and obligations of U.S. states…		67		71		42		46
Foreign government bonds		—		—		—		—
Total fixed maturities		447		475		329		281
Derivative instruments and other		2,047		2,175		4,024		4,325
Equity securities		209		215		12		16
Total other trading account assets	$	2,703	$	2,865	$	4,366	$	4,623

The net change in unrealized gains (losses) from other trading account assets still held at period end, recorded within “Other income” were $(95) million and $253 million during the years ended December 31, 2009 and 2008, respectively.

Commercial Mortgage and Other Loans

The Company’s commercial mortgage and other loans are comprised as follows at December 31:

		2009				2008
		Amount (in millions)		% of Total		Amount (in millions)			% of Total
Commercial mortgage loans by property type
Office buildings	$	5,641		21.2	%	$	5,593		20.2	%
Retail stores		5,536		20.8	%		5,102		18.5	%
Apartment complexes		4,043		15.2	%		5,065		18.3	%
Industrial buildings		5,824		21.8	%		6,255		22.6	%
Agricultural properties		1,759		6.6	%		1,967		7.1	%
Hospitality		1,567		5.9	%		1,528		5.5	%
Other		2,267		8.5	%		2,143		7.8	%
Total commercial mortgage loans		26,637		100.0	%		27,653		100.0	%
Valuation allowance		(478	)				(168	)
Total net commercial mortgage loans		26,159					27,485
Other loans
Uncollateralized loans		121					220
Collateralized by residential properties		10					12
Other collateralized loans		—					—
Total other loans		131					232
Valuation allowance		(1	)				—

B-30

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Total net other loans	130		232
Total commercial mortgage and other loans	$                        26,289	$	27,717

The commercial mortgage and other loans are geographically dispersed throughout the United States, Canada and Asia with the largest concentrations in California (25%), New York (10%) and Texas (6%) at December 31, 2009.

Activity in the allowance for losses for all commercial mortgage and other loans, for the years ended December 31, is as follows:

		2009		2008		2007
		(in millions)
Allowance for losses, beginning of year	$	168	$	84	$		97
Addition to / (release of) allowance for losses		411		84			(13)
Charge-offs, net of recoveries		(100)		—			—
Change in foreign exchange		—		—			—
Allowance for losses, end of year	$	479	$	168	$		84

Non-performing loans include those loans for which it is probable that amounts due according to the contractual terms of the loan agreement will not all be collected.  Non-performing commercial mortgage and other loans identified in management’s specific review of probable loan losses and the related allowance for losses at December 31, are as follows:

		2009		2008
		(in millions)
Non-performing commercial mortgage and other loans with allowance for losses	$	568	$	17
Non-performing commercial mortgage and other loans with no allowance for losses		—		364
Allowance for losses, end of year		(151)		(6)
Net carrying value of non-performing commercial mortgage and other loans	$	417	$	375

Non-performing commercial mortgage and other loans with no allowance for losses are loans in which the fair value of the collateral or the net present value of the loans’ expected future cash flows equals or exceeds the recorded investment. The average recorded investment in non-performing loans before allowance for losses was $460 million, $208 million and $17 million for 2009, 2008 and 2007, respectively. Net investment income recognized on these loans totaled $24 million, $23 million and $1 million for the years ended December 31, 2009, 2008 and 2007, respectively.

Other Long-term Investments

“Other long-term investments” are comprised as follows at December 31:

		2009		2008
	(in millions)
Joint ventures and limited partnerships:
Real estate related	$	562	$	664
Non real estate related		1,899		1,899
Total joint ventures and limited partnerships		2,461		2,563
Real estate held through direct ownership		—		—
Other		796		950
Total other long-term investments	$	3,257	$	3,513

B-31

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Equity Method Investments

The following tables set forth summarized combined financial information for significant joint ventures and limited partnership interests accounted for under the equity method, including the Company’s investment in operating joint ventures that are discussed in more detail in Note 7. Changes between periods in the tables below reflect changes in the activities within the joint ventures and limited partnerships, as well as changes in the Company’s level of investment in such entities.

B-32

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

				At December 31,
				2009				2008
				(in millions)
STATEMENTS OF FINANCIAL POSITION
Investments in real estate			$	3,848				$	3,083
Investments in securities				8,528					14,447
Cash and cash equivalents				446					569
Receivables				693					8,474
Property and equipment				43					136
Other assets(1)				825					2,095
Total assets			$	14,383				$	28,804
Borrowed funds-third party			$	2,940				$	2,864
Borrowed funds-Prudential				179					417
Payables				833					6,399
Other liabilities(2)				561					1,841
Total liabilities				4,513					11,521
Partners’ capital				9,870					17,283
Total liabilities and partners’ capital			$	14,383				$	28,804
Equity in partners’ capital included above (3)			$	2,219				$	3,793
Equity in limited partnership interests not included above				185					217
Carrying value			$	2,404				$	4,010
(1)  Other assets consist of goodwill, intangible assets and other miscellaneous assets.
(2)Other liabilities consist of securities repurchase agreements and other miscellaneous liabilities. (3)As of December 31, 2008 includes $1.812 billion related to the Company’s minority joint venture interest in Wachovia Securities, which was sold on December 31, 2009. See Note 7 for additional information regarding this sale.
	Years ended December 31,
	2009					2008					2007
	(in millions)
STATEMENTS OF OPERATIONS
Income from real estate investments	$	(325			)	$	54				$	75
Income from securities investments		9,529					2,980					5,430
Income from other		78					12					7
Interest expense		(460			)		(510			)		(360	)
Depreciation		(7			)		(10			)		(1	)
Management fees/salary expense		(4,409			)		(2,790			)		(2,378	)
Other expenses		(4,563			)		(1,699			)		(1,418	)
Net earnings (losses)	$	(157			)	$	(1,963			)	$	1,355
Equity in net earnings (losses) included above (1)	$	2,194				$	(398			)	$	451
Equity in net earnings (losses) of limited partnership interests not included above		(28			)		(18			)		39
Total equity in net earnings (losses)	$	2,166				$	(416			)	$	490
(1)  The year ended December 31, 2009 includes a $2.247 billion pre-tax gain related to the sale of the Company’s minority joint venture interest in Wachovia Securities, not included in the detailed financial lines above. See Note 7 for additional information regarding this sale.

B-33

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Net Investment Income

Net investment income for the years ended December 31, was from the following sources:

	2009		2008		2007
	(in millions)
Fixed maturities, available for sale	$	6,039	$	6,600	$	7,331
Equity securities, available for sale		216		227		215
Trading account assets		738		741		708
Commercial mortgage and other loans		1,653		1,670		1,504
Policy loans		479		464		455
Short-term investments and cash equivalents		76		277		464
Other long-term investments		(215)		(10)		459
Gross investment income		8,986		9,969		11,136
Less investment expenses		(393)		(719)		(1,311)
Net investment income	$	8,593	$	9,250	$	9,825

Carrying value for non-income producing assets included in fixed maturities totaled $234 million as of December 31, 2009.  Non-income producing assets represent investments that have not produced income for the twelve months preceding December 31, 2009.

Realized Investment Gains (Losses), Net

Realized investment gains (losses), net, for the years ended December 31, were from the following sources:

		2009	2008		2007
		(in millions)
Fixed maturities	$	(1,126)	$	(1,869)	$	138
Equity securities		(574)		(754)		342
Commercial mortgage and other loans		(358)		(85)		2
Investment real estate		—		—		1
Joint ventures and limited partnerships		(39)		(45)		78
Derivatives(1)		(501)		1,262		(103)
Other		3		11		(5)
Realized investment gains (losses), net	$	(2,595)	$	(1,480)	$	453

(1)   Includes the offset of hedged items in effective hedge relationships prior to maturity or termination.

Net Unrealized Investment Gains (Losses)

Net unrealized investment gains and losses on securities classified as “available for sale” and certain other long-term investments and other assets are included in the Consolidated Statements of Financial Position as a component of “Accumulated other comprehensive income (loss),” or “AOCI.” Changes in these amounts include reclassification adjustments to exclude from “Other comprehensive income (loss)” those items that are included as part of “Net income” for a period that had been part of “Other comprehensive income (loss)” in earlier periods. The amounts for the periods indicated below, split between amounts related to fixed maturity securities on which an OTTI loss has been recognized, and all other net unrealized investment gains and losses, are as follows:

B-34

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Net Unrealized Investment Gains and Losses on Fixed Maturity Securities on which an OTTI loss has been recognized

	Net Unrealized Gains (Losses) On Investments			Deferred Policy Acquisition Costs and Deferred Sales Inducements		Future Policy Benefits		Policyholders’ Dividends			Deferred Income Tax (Liability) Benefit				Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2008	$	—		$	—	$	—		$	—		$	—			$	—
Cumulative impact of the adoption of new authoritative guidance on January 1, 2009		(1,012	)		9		1			—			343				(659	)
Net investment gains (losses) on investments arising during the period		565			—		—			—			(203	)			362
Reclassification adjustment for (gains) losses included in net income		925			—		—			—			(333	)			592
Reclassification adjustment for OTTI losses excluded from net income (1)		(1,630	)		—		—			—			587				(1,043	)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and deferred sales inducements		—			156		—			—			(56	)			100
Impact of net unrealized investment (gains) losses on future policy benefits		—			—		1			—			—				1
Impact of net unrealized investment (gains) losses on policyholders’ dividends		—			—		—			—			—				—
Balance, December 31, 2009	$	(1,152	)	$	165	$	2		$	—		$	338			$	(647	)

(1)   Represents “transfers in” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

B-35

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

All Other Net Unrealized Investment Gains and Losses in AOCI

	Net Unrealized Gains (Losses) On Investments(1)			Deferred Policy Acquisition Costs and Deferred Sales Inducements			Future Policy Benefits			Policyholders’ Dividends				Deferred Income Tax (Liability) Benefit				Accumulated Other Comprehensive Income (Loss) Related To Net Unrealized Investment Gains (Losses)
	(in millions)
Balance, December 31, 2006	$	4,073		$	(131	)	$	(1,343	)		$	(1,865	)		$	(249	)		$	485
Net investment gains (losses) on investments arising during the period		(827	)		—			—				—				277				(550	)
Reclassification adjustment for (gains) losses included in net income		(494	)		—			—				—				165				(329	)
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs		—			27			—				—				(10	)			17
Impact of net unrealized investment (gains) losses on future policy benefits		—			—			93				—				(32	)			61
Impact of net unrealized investment (gains) losses on policyholders’ dividends		—			—			—				817				(286	)			531
Purchase of fixed maturities from an affiliate		(3	)		—			—				—				—				(3	)
Balance, December 31, 2007		2,749			(104	)		(1,250	)			(1,048	)			(135	)			212
Net investment gains (losses) on investments arising during the period		(15,572	)		—			—				—				5,427				(10,145	)
Reclassification adjustment for (gains) losses included in net income		2,574			—			—				—				(897	)			1,677
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs		—			1,591			—				—				(557	)			1,034
Impact of net unrealized investment (gains) losses on future policy benefits		—			—			899				—				(315	)			584
Impact of net unrealized investment (gains) losses on policyholders’ dividends		—			—			—				1,480				(518	)			962
Purchase of fixed maturities from an affiliate		(222	)		—			—				—				77				(145	)
Balance, December 31, 2008		(10,471	)		1,487			(351	)			432				3,082				(5,821	)
Cumulative impact of the adoption of new authoritative guidance on January 1, 2009		(320)			15			4				418				(33	)			84
Net investment gains (losses) on investments arising during the period		11,564			—			—				—				(3,876	)			7,688
Reclassification adjustment for (gains) losses included in net income		797			—			—				—				(279	)			518
Reclassification adjustment for OTTI losses excluded from net income (2)		1,630			—			—				—				(587	)			1,043
Impact of net unrealized investment (gains) losses on deferred policy acquisition costs and deferred sales inducements		—			(1,943	)		—				—				681				(1,262	)
Impact of net unrealized investment (gains) losses on future policy benefits		—			—			(177	)			—				62				(115	)
Impact of net unrealized investment (gains) losses on policyholders’ dividends		—			—			—				(850)				298				(552	)
Balance, December 31, 2009	$	3,200		$	(441	)	$	(524	)		$	—			$	(652	)		$	1,583

(1)   Includes cash flow hedges.

(2)   See Note 21 for information on cash flow hedges. Represents “transfers out” related to the portion of OTTI losses recognized during the period that were not recognized in earnings for securities with no prior OTTI loss.

B-36

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

The table below presents net unrealized gains (losses) on investments by asset class at December 31:

	2009			2008			2007
	(in millions)
Fixed maturity securities on which an OTTI loss has been recognized	$	(1,152	)	$	—		$	—
Fixed maturity securities, available for sale – all other		2,004			(9,811	)		1,801
Equity securities, available for sale		860			(748	)		578
Derivatives designated as cash flow hedges(1)		(242	)		(115	)		(211	)
Other investments		578			203			581
Net unrealized gains (losses) on investments	$	2,048		$	(10,471	)	$	2,749

(1)   See Note 21 for more information on cash flow hedges.

Duration of Gross Unrealized Loss Positions for Fixed Maturities

The following table shows the fair value and gross unrealized losses aggregated by investment category and length of time that individual fixed maturity securities have been in a continuous unrealized loss position, at December 31:

	2009
		Less than twelve months (1)				Twelve months or more(1)				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(in millions)
Fixed maturities
U.S. Treasury securities and obligations of U.S. government authorities and agencies		$	2,676	$	200	$	403	$	100	$	3,079		$$	$		300
Obligations of U.S. states and their political subdivisions			881		42		8		-		889			42
Foreign government bonds			254		4		42		7		296				11
Corporate securities			7,867		251		9,830		966		17,697				1,217
Commercial mortgage-backed securities			1,279		18		2,809		133		4,088				151
Asset-backed securities			1,329		553		5,621		1,774		6,950				2,327
Residential mortgage-backed securities			1,309		17		394		42		1,703				59
Total		$	15,595	$	1,085	$	19,107	$	3,022	$	34,702	$			4,107
(1)The month count for aging of unrealized losses was reset back to historical unrealized loss month counts for securities impacted by the adoption of new authoritative guidance related to other-than-temporary impairments of debt securities on January 1, 2009.

	2008
		Less than twelve months				Twelve months or more				Total
		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(in millions)
Fixed maturities
U.S. Treasury securities and obligations of U.S. government authorities and agencies		$	631	$	2	$	—	$	—	$	631	$	2
Obligations of U.S. states and their political subdivisions			296		11		7		1		303		12
Foreign government bonds			467		50		26		11		493		61
Corporate securities			30,309		3,708		12,974		3,587		43,283		7,295
Commercial mortgage-backed securities			5,305		1,056		3,001		779		8,306		1,835
Asset-backed securities			4,027		1,664		5,531		2,221		9,558		3,885
Residential mortgage-backed securities			433		93		353		37		786		130
Total		$	41,468	$	6,584	$	21,892	$	6,636	$	63,360	$	13,220

The gross unrealized losses at December 31, 2009 and 2008 are composed of $2,523 million and $9,995 million related to high or highest quality securities based on NAIC or equivalent rating and $1,584 million and $3,225 million related to other than high or highest quality securities based on NAIC or equivalent rating, respectively. At December 31, 2009, $2,386 million of the gross unrealized losses represented declines in value of greater than 20%, $202 million of which had been in that position for less

B-37

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

than six months, as compared to $8,912 million at December 31, 2008 that represented declines in value of greater than 20%, $8,129 million of which had been in that position for less than six months. At December 31, 2009, the $3,022 million of gross unrealized losses of twelve months or more were concentrated in asset backed securities, and in the manufacturing and service sectors of the Company’s corporate securities. At December 31, 2008, the $6,636 million of gross unrealized losses of twelve months or more were concentrated in asset backed securities, manufacturing sector of the Company’s corporate securities, and in the commercial mortgage-backed securities. In accordance with its policy described in Note 2, the Company concluded that an adjustment to earnings for other-than-temporary impairments for these securities was not warranted at December 31, 2009 or 2008. These conclusions are based on a detailed analysis of the underlying credit and cash flows on each security. The gross unrealized losses are primarily attributable to credit spread widening and increased liquidity discounts. At December 31, 2009, the Company does not intend to sell the securities and it is not more likely than not that the Company will be required to sell the securities before the anticipated recovery of its remaining amortized cost basis.

Duration of Gross Unrealized Loss Positions for Equity Securities

The following table shows the fair value and gross unrealized losses aggregated by length of time that individual equity securities have been in a continuous unrealized loss position, at December 31:

	2009
		Less than twelve months					Twelve months or more				Total
		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(in millions)
Equity securities, available for sale		$	535		$	60	$	144	$	20	$	679		$	80

	2008
		Less than twelve months					Twelve months or more				Total
		Fair Value		Unrealized Losses			Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
		(in millions)
Equity securities, available for sale		$	2,182		$	971	$	29	$	16	$	2,211		$	987

At December 31, 2009, $22 million of the gross unrealized losses represented declines of greater than 20%, $20 million of which had been in that position for less than six months. At December 31, 2008, $878 million of the gross unrealized losses represented declines of greater than 20%, $738 million of which had been in that position for less than six months. Perpetual preferred securities have characteristics of both debt and equity securities. Since an impairment model similar to fixed maturity equities is applied to these securities, an other-than-temporary impairment has not been recognized on certain perpetual preferred securities that have been in a continuous loss position for twelve months or more as of December 31, 2009 and 2008. In accordance with its policy described in Note 2, the Company concluded that an adjustment for other-than-temporary impairments for these securities was not warranted at December 31, 2009 or 2008.

Securities Pledged, Restricted Assets and Special Deposits

The Company pledges as collateral investment securities it owns to unaffiliated parties through certain transactions, including securities lending, securities sold under agreements to repurchase and collateralized borrowings. At December 31, the carrying value of investments pledged to third parties as reported in the Consolidated Statements of Financial Position included the following:

B-38

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

		2009		2008
		(in millions)
Fixed maturities, available for sale	$	12,228	$		14,693
Trading account assets supporting insurance liabilities		388			455
Other trading account assets		340			487
Separate account assets		3,908			4,550
Equity Securities		221			199
Total securities pledged	$	17,085	$		20,384

As of December 31, 2009, the carrying amount of the associated liabilities supported by the pledged collateral was $16,752 million. Of this amount, $5,735 million was “Securities sold under agreements to repurchase,” $4,028 million was “Separate account liabilities,” $2,802 million was “Cash collateral for loaned securities,” $2,000 million was “Long-term debt,” and $2,187 million was “Other Liabilities.”As of December 31, 2008, the carrying amount of the associated liabilities supported by the pledged collateral was $18,751 million. Of this amount, $7,501 million was “Securities sold under agreements to repurchase,” $4,641 million was “Separate account liabilities,” $3,429 million was “Cash collateral for loaned securities,” $2,000 million was “Long-term debt,” and $1,000 million was “Short-term debt.”

In the normal course of its business activities, the Company accepts collateral that can be sold or repledged. The primary sources of this collateral are securities in customer accounts and securities purchased under agreements to resell. The fair value of this collateral was approximately $196 million and $2,856 million at December 31, 2009 and 2008, respectively, all of which, for both periods, had either been sold or repledged.

Assets of $46 million and $45 million at December 31, 2009 and 2008, respectively, were on deposit with governmental authorities or trustees. Additionally, assets carried at $693 million and $696 million at December 31, 2009 and 2008, respectively, were held in voluntary trusts established primarily to fund guaranteed dividends to certain policyholders and to fund certain employee benefits. Securities restricted as to sale amounted to $231 million and $538 million at December 31, 2009 and 2008, respectively. These amounts include member and activity based stock associated with memberships in the Federal Home Loan Banks of New York and Boston.  Restricted cash and securities of $2,620 million and $4,382 million at December 31, 2009 and 2008, respectively, were included in “Other assets.” The restricted cash and securities primarily represent funds deposited by clients and funds accruing to clients as a result of trades or contracts.

5. VARIABLE INTEREST ENTITIES

In the normal course of its activities, the Company enters into relationships with various special purpose entities and other entities that are deemed to be variable interest entities (“VIEs”). A VIE is an entity that either (1) has equity investors that lack certain essential characteristics of a controlling financial interest (including the ability to control the entity, the obligation to absorb the entity’s expected losses and the right to receive the entity’s expected residual returns) or (2) lacks sufficient equity to finance its own activities without financial support provided by other entities, which in turn would be expected to absorb at least some of the expected losses of the VIE. If the Company determines that it stands to absorb a majority of the VIE’s expected losses or to receive a majority of the VIE’s expected residual returns, the Company would be deemed to be the VIE’s “primary beneficiary” and would be required to consolidate the VIE.

Consolidated Variable Interest Entities

The Company is the primary beneficiary of certain VIEs in which the Company has invested, as part of its investment activities, but over which the Company does not exercise control. The Company’s position in the capital structure and/or relative size indicates that the Company is the primary beneficiary. The Company has not provided material financial or other support that was not contractually required to these VIEs. The table below reflects the carrying amount and balance sheet caption in which the assets and liabilities of these consolidated VIEs are reported. The creditors of each consolidated VIE have recourse only to the assets of that VIE.

B-39

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

		December 31,
		2009		2008
		(in millions)
Fixed maturities, available for sale		$	41	$	-
Trading account assets supporting insurance liabilities			7		-
Other long-term investments			9		6
Cash and cash equivalents			-		4
Separate account assets			38		91
	Total assets of consolidated VIEs	$	95	$	101
Other liabilities		$	-	$	4
Separate account liabilities			38		91
	Total liabilities of consolidated VIEs	$	38	$	95

In addition, not reflected in the table above, the Company has created a trust that is a VIE, to facilitate Prudential Insurance’s Funding Agreement Notes Issuance Program (“FANIP”). The trust issues medium-term notes secured by funding agreements issued to the trust by Prudential Insurance with the proceeds of such notes. The trust is the beneficiary of an indemnity agreement with the Company that provides that the Company is responsible for costs related to the notes issued with limited exception. As a result, the Company has determined that it is the primary beneficiary of the trust, which is therefore consolidated.

The funding agreements represent an intercompany transaction that is eliminated upon consolidation. However, in recognition of the security interest in such funding agreements, the trust’s medium-term note liability of $4,927 million and $7,130 million at December 31, 2009 and 2008, respectively, is classified within “Policyholders’ account balances.” Creditors of the trust have recourse to Prudential Insurance if the trust fails to make contractual payments on the medium-term notes. The Company has not provided material financial or other support that was not contractually required to the trust.

Significant Variable Interests in Unconsolidated Variable Interest Entities

The Company may invest in debt or equity securities issued by certain asset-backed investment vehicles (commonly referred to as collateralized debt obligations, or “CDOs”) that are managed by an affiliated company. CDOs raise capital by issuing debt securities, and use the proceeds to purchase investments, typically interest-bearing financial instruments. The Company’s maximum exposure to loss resulting from its relationship with unconsolidated CDOs managed by affiliates is limited to its investment in the CDOs, which was $380 million and $384 million at December 31, 2009 and 2008, respectively. These investments are reflected in “Fixed maturities, available for sale.” The fair value of assets held within these unconsolidated VIEs was $3,421 million as of December 31, 2009. There are no liabilities associated with these unconsolidated VIEs on the Company’s balance sheet.

The Company has an investment in a note receivable issued by an affiliated VIE. This VIE issued notes to the Company in consideration for certain fixed maturity assets sold by the Company in December 2009.  The total assets of this VIE at December 31, 2009 were approximately $1.9 billion and consisted of fixed maturity securities. The market value and book value of the notes issued by the VIE and held by the Company at December 31, 2009 was $1.4 billion. The Company’s maximum exposure to loss is $1.4 billion as of December 31, 2009.

In addition, in the normal course of its activities, the Company will invest in structured investments including VIEs. These structured investments typically invest in fixed income investments and are managed by third parties and include asset-backed securities, commercial mortgage-backed securities and residential mortgage-backed securities. The Company’s maximum

B-40

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

exposure to loss on these structured investments, both VIEs and non-VIEs, is limited to the amount of its investment. The Company has not provided material financial or other support that was not contractually required to these structures. The Company has determined that it is not the primary beneficiary of these structures due to its relative size and position in the capital structure of these entities.

Included among these structured investments are asset-backed securities issued by VIEs that manage investments in the European market. In addition to a stated coupon, each investment provides a return based on the VIE’s portfolio of assets and related investment activity. The market value of these VIEs was approximately $6 billion as of December 31, 2009 and these VIEs were financed primarily through the issuance of notes similar to those purchased by the Company. The Company generally accounts for these investments as available for sale fixed maturities containing embedded derivatives that are bifurcated and marked-to-market through “Realized investment gains (losses), net,” based upon the change in value of the underlying portfolio. The Company’s variable interest in each of these VIEs represents less than 50% of the only class of variable interests issued by the VIE. The Company’s maximum exposure to loss from these interests was $703 million and $528 million at December 31, 2009 and 2008, respectively, which includes the fair value of the embedded derivatives.

6. DEFERRED POLICY ACQUISITION COSTS
	The balances of and changes in deferred policy acquisition costs as of and for the years ended December 31, are as follows:
			2009		2008		2007
				(in millions)
	Balance, beginning of year		$	8,538	$	6,687	$	6,129
	Capitalization of commissions, sales and issue expenses			1,053		914		954
	Amortization			(483)		(654)		(417)
	Change in unrealized investment gains and losses			(1,760)		1,591		27
	Impact of adoption of guidance on accounting for deferred acquisition costs in
		connection with modifications or exchanges of insurance contracts		-		-		(6)
	Other (1)			(34)		-		-
	Balance, end of year		$	7,314	$	8,538	$	6,687

(1)   Other represents DAC written off against additional paid in capital under Funding Agreement termination. See Note 20 for additional discussion.

7.    INVESTMENTS IN OPERATING JOINT VENTURES

The Company has made investments in certain joint ventures that are strategic in nature and made other than for the sole purpose of generating investment income. These investments are accounted for under the equity method of accounting and are included in “Other assets” in the Company’s Consolidated Statements of Financial Position. The earnings from these investments are included on an after-tax basis in “Equity in earnings of operating joint ventures, net of taxes” in the Company’s Consolidated Statements of Operations. Investments in operating joint ventures include the Company’s former investment in Wachovia Securities, which was sold on December 31, 2009, as well as an indirect investment in China Pacific Group. The summarized financial information for the Company’s operating joint ventures has been included in the summarized combined financial information for all significant equity method investments shown in Note 4.

Investment in Wachovia Securities

B-41

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

On July 1, 2003, the Company combined its retail securities brokerage and clearing operations with those of Wachovia Corporation (“Wachovia”) and formed Wachovia Securities Financial Holdings, LLC (“Wachovia Securities”), a joint venture headquartered in St. Louis, Missouri.  The transaction included the contribution of certain assets and liabilities of the Company’s securities brokerage operations; however, the Company retained certain assets and liabilities related to the contributed operations, including liabilities for certain litigation and regulatory matters. The Company and Wachovia each agreed to indemnify the other for certain losses, including losses resulting from litigation and regulatory matters relating to certain events arising from the operations of their respective contributed businesses prior to March 31, 2004. On December 31, 2008, Wachovia merged with and into Wells Fargo & Company (“Wells Fargo”), which succeeded to Wachovia’s rights and obligations under the joint venture arrangements.

On December 31, 2009, the Company completed the sale of its minority joint venture interest in Wachovia Securities, which includes Wells Fargo Advisors, to Wells Fargo. At the closing, the Company received $4.5 billion in cash as the purchase price of its joint venture interest and de-recognized the carrying value of its investment in the joint venture and the carrying value of the “lookback” option described below. For the year ended December 31, 2009, “Equity in earnings of operating joint ventures, net of taxes” includes the associated pre-tax gain on the sale of $2.247 billion. In addition, “General and administrative expenses” includes certain one-time costs related to the sale of the joint venture interest of $89 million, for pre-tax compensation costs and costs related to increased contributions to the Company’s charitable foundation.

In addition, following the closing, the Company received $418 million in payment of the principal of and accrued interest on the subordinated promissory note in the principal amount of $417 million that had been issued by Wachovia Securities in connection with the establishment of the joint venture.

On October 1, 2007, Wachovia completed the acquisition of A.G. Edwards, Inc. (“A.G. Edwards”) and on January 1, 2008 contributed the retail securities brokerage business of A.G. Edwards to the joint venture. Wachovia’s contribution of this business entitled the Company to elect a “lookback” option (which the Company exercised) permitting the Company to delay for a period of two years ending on January 1, 2010, the decision on whether or not to make payments to avoid or limit dilution of its 38% ownership interest in the joint venture or, alternatively, to “put” its joint venture interests to Wachovia based on the appraised value of the joint venture, excluding the A.G. Edwards business, as of January 1, 2008, the date of the combination of the A.G. Edwards business with Wachovia Securities. During this “lookback” period, the Company’s share in the earnings of the joint venture and one-time costs associated with the combination of the A.G. Edwards business with Wachovia Securities was based on the Company’s diluted ownership level.  Based upon the existing agreements and the Company’s estimates of the values of the A.G. Edwards business and the joint venture excluding the A.G. Edwards business, the Company adjusted the carrying value of its ownership interest in the joint venture effective as of January 1, 2008 to reflect the addition of the A.G. Edwards business and the dilution of the Company’s 38% ownership interest and to record the value of the above described rights under the “lookback” option. The Company accordingly recognized a corresponding increase to “Additional paid-in capital” of $1.041 billion, net of tax, which represented the excess of the estimated value of the Company’s share of the A.G. Edwards business received (of approximately $1.444 billion) and the estimated value of the “lookback” option acquired (of approximately $580 million) over the carrying value of the portion of the Company’s ownership interest in Wachovia Securities that was diluted (of approximately $422 million), net of taxes (of approximately $561 million).  In connection with the sale of the Company’s interest in the joint venture to Wells Fargo on December 31, 2009, the Company’s final diluted ownership percentage in the joint venture for 2008 and 2009 was established as 23%. On December 31, 2009, the Company recognized a decrease to “Additional paid-in capital” of $109 million, net of tax, and a true-up to the Company’s 2008 and 2009 earnings from the joint venture of $15 million, net of tax based on the difference between the diluted ownership percentage previously used to record earnings and the final diluted ownership percentage.

On August 15, 2008, Wachovia announced that it had reached an agreement in principle for a global settlement of investigations concerning the underwriting, sale and subsequent auction of certain auction rate securities by subsidiaries of

B-42

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Wachovia Securities and had recorded an increase to legal reserves. The Company’s recorded share of pre-tax losses from the joint venture for the year ended December 31, 2008 included $355 million related to the impact of this item on our share of the equity earnings of the joint venture.

The Company’s investment in Wachovia Securities, excluding the value of the “lookback” option, was $1.812 billion as of December 31, 2008. The Company recognized pre-tax equity earnings (losses) from Wachovia Securities of $2.288 billion for the year ended December 31, 2009, including the gain on the sale of $2.247 billion. The Company’s recognized pre-tax equity earnings (losses) from Wachovia Securities of $(331) million and $370 million for the years ended December 31, 2008 and 2007, respectively. The income tax expense associated with these equity earnings was $805 million for the year ended December 31, 2009, including $790 million associated with the gain on the sale. The income tax expense (benefit) associated with these equity earnings (losses) was $(110) million and $146 million for the years ended December 31, 2008 and 2007, respectively. Dividends received from the investment in Wachovia Securities were $23 million, $104 million and $366 million for the years ended December 31, 2009, 2008 and 2007, respectively.

Investment in China Pacific Group

The Company has made an indirect investment in China Pacific Group, a Chinese insurance operation. The carrying value of this operating joint venture was $528 million and $217 million, as of December 31, 2009 and December 31, 2008, respectively. The indirect investment in China Pacific Group includes unrealized changes in market value, which are included in accumulated other comprehensive income and relate to the market price of China Pacific Group’s publicly traded shares, which began trading on the Shanghai Exchange in 2007 and as of fourth quarter of 2009 are currently trading on the Hong Kong exchange. The Company recognized combined after-tax equity earnings from this operating joint venture of $3 million and $3 million for the years ended December 31, 2009 and 2008, respectively. There were no earnings recognized by the Company for this joint venture for the year ended December 31, 2007. Dividends received from this investment were $5 million and $4 million for the years ended December 31, 2009 and 2008, respectively.  No dividends were received from this investment for the year ended December 31, 2007.

8. VALUATION OF BUSINESS ACQUIRED
	The balances of and changes in VOBA as of and for the years ended December 31, are as follows:
			2009		2008		2007
				(in millions)
	Balance, beginning of year		$	437	$	765	$	898
	Amortization(1)			(171)		(369)		(173)
	Interest(2)			19		41		49
	Impact of adoption of guidance on accounting for deferred acquisition costs in
		connection with modifications or exchanges of insurance contracts		-		-		(9)
	Balance, end of year		$	285	$	437	$	765

(1)   The VOBA balances at December 31, 2009 were $0 million and $285 million related to the insurance transactions associated with the Allstate Corporation (“Allstate”) and CIGNA, respectively. The weighted average remaining expected life was approximately 17 years for the VOBA related to CIGNA.

(2)   The interest accrual rates vary by product. The interest rates for 2009 were 5.42% and 6.90% for the VOBA related to Allstate and CIGNA, respectively. The interest rates for 2008 were 5.42% and 7.30% for the VOBA related to Allstate and CIGNA, respectively. The interest rates for 2007 were 5.48% and 8.00% for the VOBA related to Allstate and CIGNA, respectively.

B-43

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

During the first quarter of 2009 and the fourth quarter of 2008, the Company recognized impairments of $73 million and $234 million, respectively, related to the VOBA associated with the Allstate acquisition. These impairments are included on the Amortization line in the table above. The impairment recorded in 2009 represented the remaining VOBA balance associated with the Allstate acquisition. These impairments are reflective of the deterioration in the financial markets, which resulted in additional market depreciation within the separate account assets and corresponding decreases in fee income and overall expected future earnings for this business. These impairments were determined using discounted present value of future estimated gross profits. Since the VOBA balance was completely impaired for these contracts, it cannot be reestablished for market value appreciation in subsequent periods.

B-44

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

The following table provides estimated future amortization, net of interest, for the periods indicated.

	VOBA Amortization
	(in millions)
2010	$	4
2011		2
2012		1
2013		1
2014		1
2015 and thereafter		276
Total	$	285

9.  GOODWILL AND OTHER INTANGIBLES
Goodwill
	The changes in the book value of goodwill are as follows:
			Goodwill
		(in millions)
Balance at January 1, 2007:
	Goodwill		$	619
	Accumulated Impairment Losses			-
Net Balance at January 1, 2007				619
2007 Activity:
	Other(1)			1
Balance at December 31, 2007:
	Goodwill			620
	Accumulated Impairment Losses			-
Net Balance at December 31, 2007				620
2008 Activity:
	Acquisitions			106
	Other(1)			(1)
Balance at December 31, 2008:
	Goodwill			725
	Accumulated Impairment Losses			-
Net Balance at December 31, 2008				725

B-45

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

2009 Activity:
	Other(1)		2
Balance at December 31, 2009:
	Goodwill		727
	Accumulated Impairment Losses		-
Net Balance at December 31, 2009		$	727

(1)   Other represents foreign currency translation.

The Company tests goodwill for impairment annually as of December 31 as discussed in further detail in Note 2. The Company performed goodwill impairment testing for the entire goodwill balance at December 31, 2009, all of which is in the Financial Services Business reporting unit. There were no goodwill impairment charges during 2009, 2008 or 2007.

Other Intangibles
		Other intangible balances at December 31, are as follows:
			2009						2008
			Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
				(in millions)
Subject to amortization:
	Customer relationships		$	174	$	(18)	$	156	$	175	$	(10)	$	165
	Other			23		(20)		3		22		(16)		6
	Total		$	197	$	(38)	$	159	$	197	$	(26)	$	171

Amortization expense for other intangibles was $12 million, $7 million and $6 million for the years ending December 31, 2009, 2008 and 2007, respectively. Amortization expense for other intangibles is expected to be approximately $13 million in 2010, $11 million in 2011, $12 million in 2012 and 2013 and $11 million in 2014.

B-46

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

10. POLICYHOLDERS' LIABILITIES
Future Policy Benefits
		Future policy benefits at December 31, are as follows:
			2009		2008
				(in millions)
Life Insurance			$	56,617	$	56,060
Individual and group annuities and supplementary contracts				14,727		14,174
Other contract liabilities				3,546		4,556
	Subtotal future policy benefits excluding unpaid claims and claim adjustment expenses			74,890		74,790
Unpaid claims and claim adjustment expenses				2,207		2,073
	Total future policy benefits		$	77,097	$	76,863

Life insurance liabilities include reserves for death and endowment policy benefits, terminal dividends and certain health benefits. Individual and group annuities and supplementary contracts liabilities include reserves for life contingent immediate annuities and life contingent group annuities. Other contract liabilities include unearned revenue and certain other reserves for group, annuities and individual life and health products.

Future policy benefits for individual participating traditional life insurance are based on the net level premium method, calculated using the guaranteed mortality and nonforfeiture interest rates which range from 2.5% to 7.5%. Participating insurance represented 13% and 15% of domestic individual life insurance in force at December 31, 2009 and 2008, respectively, and 83%, 85% and 87% of domestic individual life insurance premiums for 2009, 2008 and 2007, respectively.

Future policy benefits for individual non-participating traditional life insurance policies, group and individual long-term care policies and individual health insurance policies are generally equal to the aggregate of (1) the present value of future benefit payments and related expenses, less the present value of future net premiums, and (2) any premium deficiency reserves. Assumptions as to mortality, morbidity and persistency are based on the Company’s experience, and in certain instances, industry experience, when the basis of the reserve is established. Interest rates used in the determination of the present values range from 1.7% to 8.3%; less than 1% of the reserves are based on an interest rate in excess of 8%.

Future policy benefits for individual and group annuities and supplementary contracts are generally equal to the aggregate of (1) the present value of expected future payments, and (2) any premium deficiency reserves. Assumptions as to mortality are based on the Company’s experience, and in certain instances, industry experience, when the basis of the reserve is established. The interest rates used in the determination of the present values range from 1.0% to 14.8%; less than 1% of the reserves are based on an interest rate in excess of 8%.

Future policy benefits for other contract liabilities are generally equal to the present value of expected future payments based on the Company’s experience, except for example, certain group insurance coverages for which future policy benefits are equal to gross unearned premium reserves. The interest rates used in the determination of the present values range from 1.1% to 6.5%.

Premium deficiency reserves are established, if necessary, when the liability for future policy benefits plus the present value of expected future gross premiums are determined to be insufficient to provide for expected future policy benefits and expenses and to recover any unamortized policy acquisition costs. Premium deficiency reserves have been recorded for the group single premium annuity business, which consists of limited-payment, long-duration traditional and non-participating annuities; structured

B-47

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

settlements and single premium immediate annuities with life contingencies; and for certain individual health policies. Liabilities of $1,649 million and $1,451 million as of December 31, 2009 and 2008, respectively, are included in “Future policy benefits” with respect to these deficiencies, of which $490 million and $200 million as of December 31, 2009 and 2008, respectively, relate to net unrealized gains on securities classified as available for sale.

The Company’s liability for future policy benefits is also inclusive of liabilities for guarantee benefits related to certain nontraditional long-duration life and annuity contracts, which are discussed more fully in Note 11 and are primarily reflected in Other contract liabilities in the table above.

Unpaid claims and claim adjustment expenses primarily reflect the Company’s estimate of future disability claim payments and expenses as well as estimates of claims incurred but not yet reported as of the balance sheet dates related to group disability products. Unpaid claim liabilities are discounted using interest rates ranging from 0% to 6.35%.

Policyholders' Account Balances
		Policyholders' account balances at December 31, are as follows:
			2009		2008
			(in millions)
Individual annuities			$	9,148	$	8,735
Group annuities				20,258		18,942
Guaranteed investment contracts and guaranteed interest accounts				13,049		13,152
Funding agreements				8,395		10,787
Interest-sensitive life contracts				7,069		6,674
Dividend accumulation and other				13,735		12,909
	Total policyholders' account balances		$	71,654	$	71,199

Policyholders’ account balances represent an accumulation of account deposits plus credited interest less withdrawals, expenses and mortality charges, if applicable. These policyholders’ account balances also include provisions for benefits under non-life contingent payout annuities. Included in “Funding agreements” at December 31, 2009 and 2008, are $4,996 million and $7,234 million, respectively, related to the Company’s FANIP product which is carried at amortized cost, adjusted for the effective portion of changes in fair value of qualifying derivative financial instruments. For additional details on the FANIP product see Note 5. The interest rates associated with such notes range from 0.4% to 5.6%. Also included in funding agreements at December 31, 2009 and 2008 are $1,814 and $3,496 million, respectively, of affiliated funding agreements with Prudential Financial in support of a retail note issuance program to financial wholesalers.  Interest crediting rates range from 0% to 7.9% for interest-sensitive life contracts and from 0% to 13.4% for contracts other than interest-sensitive life. Less than 1% of policyholders’ account balances have interest crediting rates in excess of 8%.

11.    CERTAIN NONTRADITIONAL LONG-DURATION CONTRACTS

The Company issues traditional variable annuity contracts through its separate accounts for which investment income and investment gains and losses accrue directly to, and investment risk is borne by, the contractholder. The Company also issues variable annuity contracts with general and separate account options where the Company contractually guarantees to the contractholder a return of no less than (1) total deposits made to the contract less any partial withdrawals (“return of net deposits”), (2) total deposits made to the contract less any partial withdrawals plus a minimum return (“minimum return”), or (3) the highest contract value on a specified date minus any withdrawals (“contract value”). These guarantees include benefits that are payable in

B-48

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

the event of death, annuitization or at specified dates during the accumulation period and withdrawal and income benefits payable during specified periods.

The Company also issues annuity contracts with market value adjusted investment options (“MVAs”), which provide for a return of principal plus a fixed rate of return if held to maturity, or, alternatively, a “market adjusted value” if surrendered prior to maturity or if funds are reallocated to other investment options. The market value adjustment may result in a gain or loss to the Company, depending on crediting rates or an indexed rate at surrender, as applicable.

In addition, the Company issues variable life, variable universal life and universal life contracts where the Company contractually guarantees to the contractholder a death benefit even when there is insufficient value to cover monthly mortality and expense charges, whereas otherwise the contract would typically lapse (“no lapse guarantee”). Variable life and variable universal life contracts are offered with general and separate account options.

The assets supporting the variable portion of both traditional variable annuities and certain variable contracts with guarantees are carried at fair value and reported as “Separate account assets” with an equivalent amount reported as “Separate account liabilities.” Amounts assessed against the contractholders for mortality, administration, and other services are included within revenue in “Policy charges and fee income” and changes in liabilities for minimum guarantees are generally included in “Policyholders’ benefits.” In 2009, 2008 and 2007, there were no gains or losses on transfers of assets from the general account to a separate account.

For those guarantees of benefits that are payable in the event of death, the net amount at risk is generally defined as the current guaranteed minimum death benefit in excess of the current account balance at the balance sheet date. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at annuitization, the net amount at risk is generally defined as the present value of the minimum guaranteed annuity payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, timing of annuitization, contract lapses and contractholder mortality.

For guarantees of benefits that are payable at withdrawal, the net amount at risk is generally defined as the present value of the minimum guaranteed withdrawal payments available to the contractholder determined in accordance with the terms of the contract in excess of the current account balance. For guarantees of accumulation balances, the net amount at risk is generally defined as the guaranteed minimum accumulation balance minus the current account balance.   The Company’s primary risk exposures for these contracts relates to actual deviations from, or changes to, the assumptions used in the original pricing of these products, including equity market returns, interest rates, market volatility or contractholder behavior used in the original pricing of these products.

The Company’s contracts with guarantees may offer more than one type of guarantee in each contract; therefore, the amounts listed may not be mutually exclusive. The liabilities related to the net amount at risk are reflected within “Future policy benefits”. As of December 31, 2009 and 2008, the Company had the following guarantees associated with these contracts, by product and guarantee type:

B-49

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

		December 31, 2009				December 31, 2008
		In the Event of Death		At Annuitization /    Accumulation (1)		In the Event of Death		At Annuitization /    Accumulation (1)
Variable Annuity Contracts		(dollars in millions)
Return of net deposits
Account value		$	11,706	$	26	$	7,064	$	23
Net amount at risk		$	401	$	2	$	1,314	$	6
Average attained age of contractholders			61 years		66 years		62 years		65 years
Minimum return or contract value
Account value		$	17,588	$	16,370	$	15,369	$	10,281
Net amount at risk		$	4,302	$	1,835	$	7,174	$	3,157
Average attained age of contractholders			66 years		62 years		65 years		62 years
Average period remaining until earliest
	expected annuitization		N/A		2 years		N/A		3 years
________
	(1) Includes income and withdrawal benefits as described herein.
		December 31, 2009				December 31, 2008
		Unadjusted Value		Adjusted Value		Unadjusted Value		Adjusted Value
Variable Annuity Contracts		(in millions)
Market value adjusted annuities
Account value		$	370	$	378	$	408	$	409
						December 31,
						2009		2008
						In the Event of Death
						(dollars in millions)
Variable Life, Variable Universal Life and Universal Life Contracts
No lapse guarantees
Separate account value						$	2,158	$	1,603
General account value						$	1,518	$	1,216
Net amount at risk						$	49,988	$	45,408
Average attained age of contractholders							50 years		50 years

B-50

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

	Account balances of variable annuity contracts with guarantees were invested in separate account investment options as follows:
		December 31,
		2009		2008
		(in millions)
Equity funds		$	10,727	$	10,180
Bond funds			3,208		2,715
Balanced funds			10,507		4,491
Money market funds			911		1,232
Other			516		394
	Total	$	25,869	$	19,012

In addition to the amounts invested in separate account investment options above, $3,425 million at December 31, 2009 and $3,421 million at December 31, 2008 of account balances of variable annuity contracts with guarantees, inclusive of contracts with MVA features, were invested in general account investment options.

Liabilities For Guarantee Benefits

The table below summarizes the changes in general account liabilities, either written directly by the Company or assumed by the Company via reinsurance for guarantees on variable contracts. The liabilities for guaranteed minimum death benefits (“GMDB”) and guaranteed minimum income benefits (“GMIB”) are included in “Future policy benefits” and the related changes in the liabilities are included in “Policyholders’ benefits.” Guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”), and guaranteed minimum income and withdrawal benefits (“GMIWB”) features are considered to be bifurcated embedded derivatives and are recorded at fair value. Changes in the fair value of these derivatives, including changes in the Company’s own risk of non-performance, along with any fees attributed or payments made relating to the derivative, are recorded in “Realized investment gains (losses), net.” See Note 19 for additional information regarding the methodology used in determining the fair value of these embedded derivatives. The liabilities for GMAB, GMWB and GMIWB are included in “Future policy benefits.” As discussed below, the Company maintains a portfolio of derivative investments that serve as a partial economic hedge of the risks associated with these products, for which the changes in fair value are also recorded in “Realized investment gains (losses), net.” This portfolio of derivatives investments does not qualify for hedge accounting treatment under U.S. GAAP.

B-51

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

		GMDB				GMIB		GMAB/GMWB/ GMIWB
		Variable Life,       Variable         Universal Life and Universal Life		Variable Annuity		Variable Annuity		Variable Annuity
		(in millions)
Balance at January 1, 2007		$	26	$	46	$	24	$	(9)
	Incurred guarantee benefits(1)		29		31		26		78
	Paid guarantee benefits and other		-		(35)		-		-
	Impact of adoption of guidance on
	accounting for deferred acquisition
	costs in connection with modifications or
	exchanges of insurance contracts		-		-		-		2
Balance at December 31, 2007			55		42		50		71
	Incurred guarantee benefits(1)		32		329		197		1,101
	Paid guarantee benefits and other		(1)		(87)		-		-
Balance at December 31, 2008			86		284		247		1,172
	Incurred guarantee benefits(1)		64		(11)		(21)		(1,114)
	Paid guarantee benefits and other		(7)		(158)		(32)		-
Balance at December 31, 2009		$	143	$	115	$	194	$	58

(1)   Incurred guarantee benefits include the portion of assessments established as additions to reserves as well as changes in estimates affecting the reserves. Also includes changes in the fair value of features considered to be derivatives.

The GMDB liability is determined each period end by estimating the accumulated value of a portion of the total assessments to date less the accumulated value of the death benefits in excess of the account balance. The GMIB liability is determined each period by estimating the accumulated value of a portion of the total assessments to date less the accumulated value of the projected income benefits in excess of the account balance. The portion of assessments used is chosen such that, at issue (or, in the case of acquired contracts at the acquisition date), the present value of expected death benefits or expected income benefits in excess of the projected account balance and the portion of the present value of total expected assessments over the lifetime of the contracts are equal. The Company regularly evaluates the estimates used and adjusts the GMDB and GMIB liability balances, with an associated charge or credit to earnings, if actual experience or other evidence suggests that earlier assumptions should be revised.

The GMAB features provide the contractholder with a guaranteed return of initial account value or an enhanced value if applicable. The GMAB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature.

The GMWB features provide the contractholder with a guaranteed remaining balance if the account value is reduced to zero through a combination of market declines and withdrawals. The guaranteed remaining balance is generally equal to the protected value under the contract, which is initially established as the greater of the account value or cumulative deposits when withdrawals commence, less cumulative withdrawals. The contractholder also has the option, after a specified time period, to reset the guaranteed remaining balance to the then-current account value, if greater. The GMWB liability is calculated as the present value

B-52

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature.

The GMIWB features predominantly present a benefit that provides a contractholder two optional methods to receive guaranteed minimum payments over time, a “withdrawal” option or an “income” option. The withdrawal option guarantees that, upon the election of such benefit, a contract holder can withdraw an amount each year until the cumulative withdrawals reach a total guaranteed balance. The guaranteed remaining balance is generally equal to the protected value under the contract, which is initially established as the greater of: (1) the account value on the date of first withdrawal; (2) cumulative deposits when withdrawals commence, less cumulative withdrawals plus a minimum return; or (3) the highest contract value on a specified date minus any withdrawals. The income option guarantees that a contract holder can, upon the election of this benefit, withdraw a lesser amount each year for the annuitant’s life based on the total guaranteed balance. The withdrawal or income benefit can be elected by the contract holder upon issuance of an appropriate deferred variable annuity contract or at any time following contract issue prior to annuitization. Certain GMIWB features include an automatic rebalancing element that reduces the Company’s exposure to these guarantees. The GMIWB liability is calculated as the present value of future expected payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature.

Liabilities for guaranteed benefits include amounts assumed from affiliates of $14 million and $58 million as of December 31, 2009 and December 31, 2008, respectively. See Note 13 for amounts recoverable from reinsurers relating to the ceding of certain embedded derivative liabilities associated with these guaranteed benefits, which are not reflected in the tables above.

As part of its risk management strategy, the Company hedges or limits its exposure to these risks, excluding those risks that have been deemed suitable to retain, through a combination of product design elements, such as an automatic rebalancing element, and externally purchased hedging instruments, such as equity options and interest rate derivatives. The automatic rebalancing element included in the design of certain optional living benefits transfers assets between the variable investments selected by the annuity contractholder and, depending on the benefit feature, fixed income investments backed by the Company’s general account or a separate account bond portfolio. The transfers are based on a static mathematical formula which considers a number of factors, including the performance of the contractholder-selected investments. In general, negative investment performance results in transfers to fixed income investments backed by the Company’s general account or a separate account bond portfolio, and positive investment performance results in transfers back to contractholder-selected investments. Other product design elements utilized for certain products to manage these risks include asset allocation and minimum purchase age requirements.  For risk management purposes the Company segregates the variable annuity living benefit features into those that include the automatic rebalancing element, including certain GMIWB riders and certain GMAB riders; and those that do not include the automatic rebalancing element, including certain legacy GMIWB, GMWB, GMAB and GMIB riders. Living benefit riders that include the automatic rebalancing element also include GMDB riders, and as such the GMDB risk in these riders also benefits from the automatic rebalancing element.

Sales Inducements

The Company defers sales inducements and amortizes them over the anticipated life of the policy using the same methodology and assumptions used to amortize deferred policy acquisition costs. These deferred sales inducements are included in “Other assets.” The Company offers various types of sales inducements. These inducements include: (1) a bonus whereby the policyholder’s initial account balance is increased by an amount equal to a specified percentage of the customer’s initial deposit, (2) additional credits after a certain number of years a contract is held and (3) enhanced interest crediting rates that are higher than the normal general account interest rate credited in certain product lines. Changes in deferred sales inducements, reported as “Interest credited to policyholders’ account balances,” are as follows:

B-53

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

		Sales  Inducements
		(in millions)
Balance at January 1, 2007		$	203
	Capitalization		62
	Amortization		(25)
	Change in unrealized gain/(loss) on investments		-
	Impact of adoption of guidance on accounting for deferred acquisition costs in connection with
	modifications or exchanges of insurance contracts		(1)
Balance at December 31, 2007			239
	Capitalization		74
	Amortization		(16)
	Change in unrealized gain/(loss) on investments		-
Balance at December 31, 2008			297
	Capitalization		97
	Amortization		(51)
	Change in unrealized gain/(loss) on investments		(28)
Balance at December 31, 2009		$	315

12.    CLOSED BLOCK

On the date of demutualization, Prudential Insurance established a Closed Block for certain individual life insurance policies and annuities issued by Prudential Insurance in the U.S. The recorded assets and liabilities were allocated to the Closed Block at their historical carrying amounts. The Closed Block forms the principal component of the Closed Block Business.

The policies included in the Closed Block are specified individual life insurance policies and individual annuity contracts that were in force on the effective date of the Plan of Reorganization and for which Prudential Insurance is currently paying or expects to pay experience-based policy dividends. Assets have been allocated to the Closed Block in an amount that has been determined to produce cash flows which, together with revenues from policies included in the Closed Block, are expected to be sufficient to support obligations and liabilities relating to these policies, including provision for payment of benefits, certain expenses, and taxes and to provide for continuation of the policyholder dividend scales in effect in 2000, assuming experience underlying such scales continues. To the extent that, over time, cash flows from the assets allocated to the Closed Block and claims and other experience related to the Closed Block are, in the aggregate, more or less favorable than what was assumed when the Closed Block was established, total dividends paid to Closed Block policyholders may be greater than or less than the total dividends that would have been paid to these policyholders if the policyholder dividend scales in effect in 2000 had been continued. Any cash flows in excess of amounts assumed will be available for distribution over time to Closed Block policyholders and will not be available to stockholders. If the Closed Block has insufficient funds to make guaranteed policy benefit payments, such payments will be made from assets outside of the Closed Block. The Closed Block will continue in effect as long as any policy in the Closed Block remains in force unless, with the consent of the New Jersey insurance regulator, it is terminated earlier.

The excess of Closed Block Liabilities over Closed Block Assets at the date of the demutualization (adjusted to eliminate the impact of related amounts in “Accumulated other comprehensive income (loss)”) represented the estimated maximum future earnings at that date from the Closed Block expected to result from operations attributed to the Closed Block after income taxes. In establishing the Closed Block, the Company developed an actuarial calculation of the timing of such maximum future earnings. If actual cumulative earnings of the Closed Block from inception through the end of any given period are greater than the expected

B-54

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

cumulative earnings, only the expected earnings will be recognized in income. Any excess of actual cumulative earnings over expected cumulative earnings will represent undistributed accumulated earnings attributable to policyholders, which are recorded as a policyholder dividend obligation. The policyholder dividend obligation represents amounts to be paid to Closed Block policyholders as an additional policyholder dividend unless otherwise offset by future Closed Block performance that is less favorable than originally expected. If the actual cumulative earnings of the Closed Block from its inception through the end of any given period are less than the expected cumulative earnings of the Closed Block, the Company will recognize only the actual earnings in income. However, the Company may reduce policyholder dividend scales, which would be intended to increase future actual earnings until the actual cumulative earnings equaled the expected cumulative earnings.

As of January 1, 2009, the Company recognized an adjusted cumulative earnings policyholder dividend obligation of $851 million to Closed Block policyholders for the excess of actual cumulative earnings over the expected cumulative earnings, which reflects a cumulative adjustment of $418 million related to the Company’s adoption of the revised authoritative guidance for the recognition and presentation of other-than-temporary impairments, effective January 1, 2009. See Note 2 for more information on the adoption of the new authoritative guidance for the recognition and presentation of other-than-temporary impairments. However, due to the accumulation of net unrealized investment losses that had arisen subsequent to the establishment of the Closed Block, the total policyholder dividend obligation balance was reduced to zero through “Accumulated other comprehensive income (loss),” as of December 31, 2008 and at January 1, 2009. Actual cumulative earnings are below the expected cumulative earnings by $601 million, as of December 31, 2009, thereby eliminating the cumulative earnings policyholder dividend obligation until this amount is recovered. Furthermore, the accumulation of net unrealized investment gains as of December 31, 2009 that have arisen subsequent to the establishment of the Closed Block, are not sufficient to overcome the cumulative earnings shortfall, and therefore, the total policyholder dividend obligation balance remains at zero. See the table below for changes in the components of the policyholder dividend obligation for the years ended December 31, 2009 and 2008.

On December 8, 2009, Prudential Insurance’s Board of Directors acted to reduce the dividends payable in 2010 on Closed Block policies. This decrease reflects the deterioration in investment results and resulted in a $98 million reduction of the liability for policyholder dividends recognized in the year ended December 31, 2009. On December 19, 2008, Prudential Insurance’s Board of Directors acted to reduce the dividends payable in 2009 on Closed Block policies. This decrease also reflected the deterioration in investment results and resulted in a $187 million reduction of the liability for policyholder dividends recognized in the year ended December 31, 2008. On December 11, 2007, Prudential Insurance’s Board of Directors acted to increase the dividends payable in 2008 on Closed Block policies. This increase reflected improved mortality, as well as investment gains. These actions resulted in an $89 million increase in the liability for policyholder dividends recognized in the year ended December 31, 2007.

B-55

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Closed Block Liabilities and Assets designated to the Closed Block at December 31, as well as maximum future earnings to be recognized from Closed Block Liabilities and Closed Block Assets, are as follows:

			2009		2008
			(in millions)
Closed Block Liabilities
	Future policy benefits		$	51,774	$	51,763
	Policyholders' dividends payable			926		1,036
	Policyholders' dividend obligation			-		-
	Policyholders' account balances			5,588		5,622
	Other Closed Block liabilities			4,300		5,724
		Total Closed Block Liabilities		62,588		64,145
Closed Block Assets
	Fixed maturities, available for sale, at fair value			38,448		35,345
	Other trading account assets, at fair value			166		120
	Equity securities, available for sale, at fair value			3,037		2,354
	Commercial mortgage and other loans			7,751		8,129
	Policy loans			5,418		5,423
	Other long-term investments			1,597		1,676
	Short-term investments			1,218		1,340
		Total investments		57,635		54,387
	Cash and cash equivalents			662		1,779
	Accrued investment income			608		615
	Other Closed Block assets			307		409
		Total Closed Block Assets		59,212		57,190
Excess of reported Closed Block Liabilities over Closed Block Assets				3,376		6,955
Portion of above representing accumulated other comprehensive income:
		Net unrealized investment gains (losses)		231		(4,371)
		Allocated to policyholder dividend obligation		-		433
Future earnings to be recognized from Closed Block Assets and Closed Block Liabilities			$	3,607	$	3,017
		Information regarding the policyholder dividend obligation is as follows:
			2009		2008
			(in millions)
Balance, January 1			$	-	$	1,779
	Impact from earnings allocable to policyholder dividend obligation			(851)		(299)
	Change in net unrealized investment gains (losses) allocated to policyholder dividend
		obligation(1)		851		(1,480)
Balance, December 31			$	-	$	-

B-56

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

		___________
		(1) For 2009, this amount was capped to the extent of earnings allocable to policyholder dividend obligation.
		Closed Block revenues and benefits and expenses for the years ended December 31, 2009, 2008 and 2007 were as follows:
			2009		2008		2007
			(in millions)
Revenues
	Premiums		$	3,250	$	3,608	$	3,552
	Net investment income			2,907		3,154		3,499
	Realized investment gains (losses), net			(1,219)		(8)		584
	Other income			102		15		51
		Total Closed Block revenues		5,040		6,769		7,686
Benefits and Expenses
	Policyholders' benefits			3,762		4,087		4,021
	Interest credited to policyholders' account balances			141		141		139
	Dividends to policyholders'			1,222		2,122		2,731
	General and administrative expenses			568		632		729
		Total Closed Block benefits and expenses		5,693		6,982		7,620
Closed Block revenues, net of Closed Block benefits and expenses, before
	income taxes and discontinued operations			(653)		(213)		66
Income tax expense (benefit)				(63)		(193)		64
Closed Block revenues, net of Closed Block benefits and expenses and income
	taxes, before discontinued operations			(590)		(20)		2
Income from discontinued operations, net of taxes				-		-		2
Closed Block revenues, net of Closed Block benefits and expenses, income taxes
	and discontinued operations		$	(590)	$	(20)	$	4

13.    REINSURANCE

The Company participates in reinsurance in order to provide additional capacity for future growth, to limit the maximum net loss potential arising from large risks and in acquiring or disposing of businesses.

In 2006, the Company acquired the variable annuity business of The Allstate Corporation (“Allstate”) through a reinsurance transaction. The reinsurance arrangements with Allstate include a coinsurance arrangement associated with the general account liabilities assumed and a modified coinsurance arrangement associated with the separate account liabilities assumed. The reinsurance payable, which represents the Company’s obligation under the modified coinsurance arrangement, is netted with the reinsurance receivable in the Company’s Consolidated Statement of Financial Position.

B-57

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

In 2004, the Company acquired the retirement business of CIGNA and as a result, entered into various reinsurance arrangements. The Company still has indemnity coinsurance and modified coinsurance without assumption arrangements in effect related to this acquisition.

Life and disability reinsurance is accomplished through various plans of reinsurance, primarily yearly renewable term, per person excess and coinsurance. In addition, the Company entered into reinsurance agreements covering 90% of the Closed Block policies, including 17% with an affiliate through various modified coinsurance arrangements. The Company accounts for these modified coinsurance arrangements under the deposit method of accounting. Reinsurance ceded arrangements do not discharge the Company as the primary insurer. Ceded balances would represent a liability of the Company in the event the reinsurers were unable to meet their obligations to the Company under the terms of the reinsurance agreements. Reinsurance premiums, commissions, expense reimbursements, benefits and reserves related to reinsured long-duration contracts are accounted for over the life of the underlying reinsured contracts using assumptions consistent with those used to account for the underlying contracts. The cost of reinsurance related to short-duration contracts is accounted for over the reinsurance contract period. Amounts recoverable from reinsurers, for both short-and long-duration reinsurance arrangements, are estimated in a manner consistent with the claim liabilities and policy benefits associated with the reinsured policies. The Company also participates in reinsurance of Liabilities for Guaranteed Benefits, which are more fully described in Note 11.

The Company participates in reinsurance transactions with the following subsidiaries of Prudential Financial: Prudential Life Insurance Company of Taiwan Inc., The Prudential Life Insurance Company of Korea, Ltd., The Prudential Life Insurance Company, Ltd., Pramerica Life S.p.A., Pramerica Zycie Towarzystwo Ubezpieczen i Reasekuracji S.A., Prudential Holdings of Japan, Inc., Pruco Reinsurance Ltd., Prudential Annuities Life Assurance Corporation, Prudential Seguros Mexico, S.A., Prudential Seguros, S.A., Pramerica of Bermuda Life Assurance Company, Ltd., and Prudential Arizona Reinsurance III Company.

The tables presented below exclude amounts pertaining to the Company’s discontinued operations.

Reinsurance amounts included in the Consolidated Statements of Operations for premiums, policy charges and fees and policyholders’ benefits for the years ended December 31, were as follows:

		2009		2008		2007
		(in millions)
Direct premiums		$	9,866	$	9,787	$	9,447
Reinsurance assumed			1,164		987		862
Reinsurance ceded			(1,397)		(1,301)		(1,436)
	Premiums	$	9,633	$	9,473	$	8,873
Direct policy charges and fees		$	2,020	$	2,059	$	1,956
Reinsurance assumed			140		181		236
Reinsurance ceded			(70)		(60)		(53)
	Policy charges and fees	$	2,090	$	2,180	$	2,139
Direct policyholder benefits		$	11,485	$	11,695	$	11,057
Reinsurance assumed			959		1,169		785
Reinsurance ceded			(1,397)		(1,291)		(1,397)

B-58

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

	Policyholders' benefits	$	11,047	$	11,573	$	10,445
Reinsurance recoverables at December 31, are as follows:
				2009		2008
				(in millions)
Individual and group annuities (1)				$	1,039	$	856
Life Insurance					1,482		1,367
Other reinsurance					119		113
	Total reinsurance recoverable			$	2,640	$	2,336

_________

(1)   Primarily represents reinsurance recoverables established under the reinsurance arrangements associated with the acquisition of the retirement business of CIGNA. The Company has recorded related reinsurance payables of $1,038 million and $856 million at December 31, 2009 and 2008, respectively.

 “Premiums” includes affiliated reinsurance assumed of $1,092 million, $974 million and $847 million and affiliated reinsurance ceded of $(111) million, $(114) million and $(102) million for the years ended December 31, 2009, 2008, and 2007, respectively.

“Policyholders’ benefits” includes affiliated reinsurance assumed of $823 million, $748 million and $645 million and affiliated reinsurance ceded of $(61) million, $(66) million and $(54) million for the years ended December 31, 2009, 2008, and 2007, respectively.

“General and administrative expenses” include affiliated assumed expenses of $128 million, $91 million and $82 million for the years ended December 31, 2009, 2008, and 2007, respectively.

Amounts “Due from parent and affiliates” includes affiliated reinsurance recoverables of $940 million and $853 million at December 31, 2009 and 2008, respectively. Excluding both the reinsurance recoverable associated with the acquisition of the retirement business of CIGNA and affiliated reinsurance recoverables, four major reinsurance companies account for approximately 61% of the reinsurance recoverable at December 31, 2009. The Company periodically reviews the financial condition of its reinsurers and amounts recoverable therefrom in order to minimize its exposure to loss from reinsurer insolvencies, recording an allowance when necessary for uncollectible reinsurance.

Amounts “Due from parent and affiliates” include affiliated reinsurance recoverable referenced above as well as $(4) million and $833 million at December 31, 2009 and 2008, respectively, related to the ceding of certain embedded derivative liabilities associated with the Company’s guaranteed benefits. “Realized investment gains (losses), net” includes a loss of $878 million, a gain of $768 million and a gain of $22 million for the years ended December 31, 2009, 2008, and 2007, respectively, related to the change in fair values of these ceded embedded derivative liabilities.

“Deferred policy acquisition costs” includes affiliated amounts related to reinsurance of $754 million and $652 million at December 31, 2009 and 2008, respectively.

Amounts “Due to parent and affiliates” includes reinsurance payables of $2,880 million and $2,237 million at December 31, 2009 and 2008, respectively.

During 2007, an affiliated reinsurance agreement with Prudential Holdings of Japan, Inc., accounted for under the deposit method of accounting was recaptured resulting in an increase in paid in capital of $18 million to the Company. “Other income”

B-59

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

includes losses of $48 million for the year ended December 31, 2007, related to this agreement. There was no income related to this agreement in 2008 and 2009.

B-60

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

14.    SHORT-TERM AND LONG-TERM DEBT
Short-term Debt
	Short-term debt at December 31, is as follows:
		2009		2008
		(in millions)
Commercial paper		$	730	$	4,343
Other notes payable(1)(2)			159		1,248
Current portion of long-term debt(3)			2,042		64
	Total short-term debt	$	2,931	$	5,655

(1) Includes collateralized borrowings from the Federal Home Loan Bank of New York of $1,000 million at December 31, 2008, which are discussed in more detail below.

(2) Includes notes due to related parties of $157 million and $70 million at December 31, 2009 and 2008, respectively.  At December 31, 2008, $12 million, of the related party notes payable were variable rate notes where the payments on these loans were based on the performance of certain separate accounts held by a subsidiary of the Company, resulting in effective interest rates on these loans ranging from - -74.9% to -30.0% in 2009 and -74.9% to 12.4% in 2008. The remaining related party notes payable have variable interest rates ranging from 0.4% to 1.8% in 2009 and 1.8% to 3.5% in 2008.

(3)   Includes collateralized borrowings from the Federal Home Loan Bank of New York of $2,000 million at December 31, 2009, which are discussed in more detail below.

The weighted average interest rate on outstanding short-term debt, excluding the current portion of long-term debt and convertible debt, was 0.6% and 1.5% at December 31, 2009 and 2008, respectively. At December 31, 2009 and 2008, the Company was in compliance with all covenants related to the above debt.

At December 31, 2009, the Company had $4,340 million in committed lines of credit from numerous financial institutions, all of which were unused. These lines of credit have terms ranging from two to three years. The Company also has access to uncommitted lines of credit from financial institutions. In addition, the Company, as part of its real estate separate account activities, had outstanding lines of credit of $1,004 million at December 31, 2009, of which $204 million was used.

Commercial Paper

 The Company issues commercial paper primarily to manage operating cash flows and existing commitments, to meet working capital needs and to take advantage of current investment opportunities. Prudential Funding, LLC, (“Prudential Funding”) a wholly-owned subsidiary of Prudential Insurance, has a commercial paper program, rated A-1+ by Standard & Poor’s Rating Services (“S&P”), P-2 by Moody’s Investor Service, Inc. (“Moody’s”) and F1 by Fitch Ratings Ltd. (“Fitch”) at December 31, 2009. Prudential Funding’s outstanding commercial paper borrowings were $730 million and $4,343 million at December 31, 2009 and December 31, 2008, respectively. At December 31, 2009 and 2008, the weighted average maturity of total commercial paper outstanding was 23 and 27 days, respectively. Prudential Funding’s outstanding master note borrowings, included in other notes payable in the table above were $0 million and $11 million at December 31, 2009 and 2008, respectively.

Prudential Funding’s commercial paper programs were granted approval during the fourth quarter of 2008 to participate in the Commercial Paper Funding Facility (“CPFF”) sponsored by the Federal Reserve Bank of New York.  Commercial paper programs were required to maintain ratings of at least A-1/P-1/F1 by at least two rating agencies in order to be eligible for the CPFF.  Access to the CPFF for all issuers was terminated, by the Federal Reserve, on February 1, 2010.  As of December 31, 2009

B-61

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Prudential Funding did not have any commercial paper outstanding under the CPFF.  The outstanding commercial paper at December 31, 2008 includes $450 million under the CPFF.

At December 31, 2009 and 2008, a portion of commercial paper borrowings were supported by $4,340 million and $4,500 million of the Company’s existing lines of credit, respectively. The Company’s ability to borrow under these line of credit facilities is conditioned on the continued satisfaction of customary conditions, including the absence of defaults (as defined in these facility agreements) and the maintenance at all times by Prudential Insurance of total adjusted capital of at least $5,500 million based on statutory accounting principles prescribed under New Jersey law and Prudential Financial’s maintenance of consolidated net worth of at least $12,500 million, which for this purpose is based on U.S. GAAP equity, excluding net unrealized gains and losses on investments. The Company’s ability to borrow under these facilities is not contingent on its credit ratings or subject to material adverse change clauses. As of December 31, 2009 and 2008, Prudential Insurance’s total adjusted capital and Prudential Financial’s consolidated U.S. GAAP equity, excluding net unrealized gains and losses on investments, exceeded the minimum amounts required to borrow under these facilities.

Federal Home Loan Bank of New York

Prudential Insurance has been a member of the Federal Home Loan Bank of New York (“FHLBNY”) since June 2008. Membership allows Prudential Insurance access to collateralized advances, collateralized funding agreements, and other FHLBNY products. Collateralized advances from the FHLBNY are classified in “Short-term debt” or “Long-term debt,” depending on the maturity date of the obligation. Collateralized funding agreements issued to the FHLBNY are classified in “Policyholders’ account balances.” These funding agreements have priority claim status above debt holders of Prudential Insurance.

Prudential Insurance’s membership in FHLBNY requires the ownership of member stock, and borrowings from FHLBNY require the purchase of FHLBNY activity based stock in an amount equal to 4.5% of the outstanding borrowings. All FHLBNY stock purchased by Prudential Insurance is classified as restricted general account investments within “Other long-term investments,” and the carrying value of these investments was $221 and $199 million as of December 31, 2009 and 2008, respectively.

The FHLBNY requires Prudential Insurance to pledge qualifying mortgage-related assets or U.S. Treasury securities as collateral for all borrowings. In May 2009, the New Jersey Department of Banking and Insurance (“NJDOBI”) revised its prior guidance to increase the maximum amount of qualifying assets that Prudential Insurance may pledge as collateral to the FHLBNY from 5% to 7% of its prior year-end statutory net admitted assets exclusive of separate account assets; however, this limitation resets to 5% on December 31, 2010 unless extended by NJDOBI. Based on its statutory net admitted assets as of December 31, 2008, the 7% limitation equates to a maximum amount of pledged assets of $10,474 million and an estimated maximum borrowing capacity, after taking into account applicable required collateralization levels and required purchases of activity based FHLBNY stock, of approximately $8,702 million. However, the ability to borrow from the FHLBNY is subject to the availability and maintenance of qualifying assets at Prudential Insurance, and there is no assurance that Prudential Insurance will have sufficient qualifying assets available to it in order to access the increased capacity in full at any particular time. Also, the revised guidance from NJDOBI limits the aggregate amount of assets Prudential Insurance may pledge for all loans, including borrowings from the FHLBNY, to 10% of its prior year-end statutory net admitted assets exclusive of separate account assets; however, this limitation excludes certain activities, such as asset-based financing transactions.

The fair value of the qualifying assets pledged as collateral by Prudential Insurance must be maintained at certain specified levels of the borrowed amount, which can vary, depending on the nature of the assets pledged. As of December 31, 2009 and 2008, respectively, Prudential Insurance had pledged qualifying assets with a fair value of $3,947 million and $4,075 million, which is above the minimum level required by the FHLBNY, and had total outstanding borrowings of $3,500 million and $3,000 million, respectively. The total borrowings from the FHLBNY at December 31, 2009 are comprised of $2,000 million of collateralized advances reflected in “Short-term debt” and $1,500 million of collateralized funding agreements reflected in “Policyholders’

B-62

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

 account balances.”  The total borrowings from the FHLBNY at December 31, 2008 are comprised of $1,000 million and $2,000 million of collateralized advances reflected in “Short-term debt” and “Long-term debt”, respectively.

B-63

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Federal Home Loan Bank of Boston

Prudential Retirement Insurance and Annuity Company (“PRIAC”), a wholly owned subsidiary of the Company, became a member of the Federal Home Loan Bank of Boston (“FHLBB”) in December 2009. Membership allows PRIAC access to collateralized advances which will be classified in “Short-term debt” or “Long-term debt”, depending on the maturity date of the obligation. PRIAC’s membership in FHLBB requires the ownership of member stock, and borrowings from FHLBB require the purchase of FHLBB activity based stock in an amount between 3.0% and 4.5% of outstanding borrowings, depending on the maturity of the obligation. As of December 31, 2009, PRIAC had no advances outstanding under the FHLBB facility.

The Connecticut Department of Insurance (“CTDOI”) granted PRIAC consent to pledge up to $2,600 million in qualifying assets to secure borrowing through December 31, 2009 and recently granted an extension through December 31, 2011. PRIAC must seek re-approval from CTDOI prior to borrowing additional funds, after December 31, 2011. Based on eligible assets as of December 31, 2009, PRIAC had an estimated maximum borrowing capacity, after taking into account applicable required collateralization levels and required purchases of activity based FHLBB stock, of approximately $1,000 million.

Long-term Debt

Long-term debt at December 31, is as follows:

			Maturity
			Dates		Rate		2009		2008
							(in millions)
Fixed rate notes:
	Surplus notes(1)			2014-2036		4.75%-8.30%	$	2,686	$	2,687
	Other fixed rate notes(2)(3)			2010-2027		1.00%-14.85%		780		1,281
Floating rate notes:
	Surplus notes(4)			2016-2052		(5)		3,250		3,200
	Other floating rate notes(2)(6)			2010-2013		(7)		213		1,519
		Total long-term debt					$	6,929	$	8,687

[Missing Graphic Reference]

(1)   Fixed rate surplus notes at December 31, 2009 and 2008 includes $1,745 million and $2,243 million, respectively, due to a related party. Maturities of these notes range from 2014 through 2036. The interest rates ranged from 5.1% to 6.1% in 2009 and 4.75% to 6.1% in 2008.

(2)   Includes collateralized borrowings from the Federal Home Loan Bank of New York of $2,000 million at December 31, 2008, of which $500 million is fixed-rate and $1,500 million is floating rate.  These borrowings are discussed in more detail above.

(3)   Other fixed rate notes at December 31, 2009 and 2008 includes $578 million and $540 million, respectively, due to related parties.  Maturities of these notes range from 2015 through 2027 and interest rates ranged from 4.88% to 14.85% in 2009 and 4.88% to 5.29% in 2008.

(4)   Floating rate surplus notes at December 31, 2009 includes $50 million due to a related party.  Maturity of these notes is 2039. The interest rate was 2.61% in 2009.

(5)   The interest rate on the floating rate Surplus notes ranged from 0.55% to 4.84% in 2009 and 1.51% to 5.93% in 2008.

(6)   Other floating rate notes at December 31, 2009 and 2008 includes $213 million and $19 million, respectively, due to related parties.  Maturities on these notes range from 2011 through 2013 and interest rates on these notes ranged from 1.52% to 15.48% in 2009 and 8.89% to 15.48% in 2008.  At December 31, 2008, the related party notes were Mexican peso denominated loans.

(7)   The interest rates on the other floating rate notes are based on LIBOR.  Interest rates ranged from 1.52% to 15.48% in 2009 and 3.33% to 15.48% in 2008.

B-64

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

At December 31, 2009 and 2008, the Company was in compliance with all debt covenants related to the borrowings in the above table.

Surplus Notes

The fixed rate surplus notes issued by Prudential Insurance to non-affiliates are subordinated to other Prudential Insurance borrowings and policyholder obligations, and the payment of interest and principal may only be made with the prior approval of the Commissioner of Banking and Insurance of the State of New Jersey (the “Commissioner”). The Commissioner could prohibit the payment of the interest and principal on the surplus notes if certain statutory capital requirements are not met. At December 31, 2009 and 2008, the Company met these statutory capital requirements. At December 31, 2009 and 2008, $941 million and $444 million, respectively, of fixed rate surplus notes were outstanding to non-affiliates.

In September 2009, Prudential Insurance issued in a private placement $500 million of surplus notes due September 2019 with an interest rate of 5.36% per annum. The surplus notes are exchangeable at the option of the holder, in whole but not in part, for shares of Prudential Financial Common Stock beginning in September 2014, or earlier upon a fundamental business combination involving Prudential Financial or a continuing payment default. The initial exchange rate for the surplus notes is 10.1235 shares of Common Stock per each $1,000 principal amount of surplus notes, which represents an initial exchange price per share of Common Stock of $98.78; however, the exchange rate is subject to customary anti-dilution adjustments. The exchange rate is also subject to a make-whole decrease in the event of an exchange prior to maturity (except upon a fundamental business combination or a continuing payment default), that will result in a reduction in the number of shares  issued upon exchange (per $1,000 principal amount of surplus notes) determined by dividing a prescribed cash reduction value (which will decline over the life of the surplus notes, from $102.62 for an exercise on September 18, 2014 to zero for an exercise at maturity) by the price of the Common Stock at the time of exchange.  In addition, the exchange rate is subject to a customary make-whole increase in connection with an exchange of the surplus notes upon a fundamental business combination where 10% or more of the consideration in that business combination consists of cash, other property or securities that are not listed on a U.S. national securities exchange.

These exchangeable surplus notes are not redeemable by Prudential Insurance prior to maturity, except in connection with a fundamental business combination involving Prudential Financial, in which case the surplus notes will be redeemable by Prudential Insurance, subject to the noteholders’ right to exchange the surplus notes instead, at par or, if greater, a  make-whole redemption price.  The surplus notes are subordinated to all other Prudential Insurance borrowings and policyholder obligations, except for other surplus notes of Prudential Insurance (including those currently outstanding), with which the surplus notes rank pari passu. Payments of interest and principal on the surplus notes may only be made with the prior approval of the Commissioner.

During 2007, a subsidiary of Prudential Insurance issued $500 million of 45-year floating rate surplus notes to an unaffiliated financial institution. Surplus notes issued under this facility are subordinated to policyholder obligations, and the payment of interest and principal on them may only be made by the issuer with the prior approval of the Arizona Department of Insurance. Concurrent with the issuance of these surplus notes, Prudential Financial entered into a credit derivative that will require Prudential Financial to make certain payments in the event of deterioration in the value of the surplus notes. As of December 31, 2009 and 2008, the credit derivative was a liability of $22 million and $16 million, respectively, net of $0 million and $125 million in collateral pledged by Prudential Financial, respectively.

During 2006, a subsidiary of Prudential Insurance entered into a surplus note purchase agreement with an unaffiliated financial institution that provides for the issuance of up to $3,000 million of ten-year floating rate surplus notes. At December 31, 2009 and 2008, $2,700 million were outstanding under this agreement. Concurrent with the issuance of each surplus note, Prudential Financial enters into arrangements with the buyer, which are accounted for as derivative instruments that may result in payments by, or to, Prudential Financial over the term of the surplus notes, to the extent there are significant changes in the value of the surplus notes. Surplus notes issued under this facility are subordinated to policyholder obligations, and the payment of

B-65

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

interest and principal on them may only be made by the issuer with the prior approval of the Arizona Department of Insurance. As of December 31, 2009 and 2008, these derivative instruments had no material value.

Other

In order to modify exposure to interest rate and currency exchange rate movements, the Company utilizes derivative instruments, primarily interest rate swaps, in conjunction with some of its debt issues. The impact of these derivative instruments are not reflected in the rates presented in the tables above. For those derivative instruments that qualify for hedge accounting treatment, there was no material effect on interest expense for the year ended December 31, 2009 and interest expense was decreased by $10 million for the year ended December 31, 2008. See Note 21 for additional information on the Company’s use of derivative instruments.

 Interest expense for short-term and long-term debt, including interest on affiliated debt, was $352 million, $539 million and $798 million, for the years ended December 31, 2009, 2008 and 2007, respectively. Interest expense related to affiliated debt was $154 million, $177 million and $191 million for the years ended December 31, 2009, 2008 and 2007, respectively.  “Due to parents and affiliates” included $24 and $23 million associated with the affiliated long-term interest payable at December 31, 2009 and 2008, respectively.

Included in “Policyholders’ account balances” are additional debt obligations of the Company. See Notes 10 and 5 for further discussion.

15.    EQUITY
Comprehensive Income
The components of comprehensive income (loss) for the years ended December 31, are as follows:
		2009		2008		2007
		(in millions)
Net income (loss)		$	2,312	$	(668)	$	1,941
Other comprehensive income (loss), net of taxes
	Change in foreign currency translation adjustments		6		(24)		8
	Change in net unrealized investments gains (losses)(1)		7,332		(5,888)		(270)
	Change in pension and postretirement unrecognized net periodic benefit (cost)		(620)		(707)		521
Other comprehensive income (loss), net of tax expense (benefit) of $3,364,
	($3,517), $195		6,718		(6,619)		259
Comprehensive income (loss)			9,030		(7,287)		2,200
	Comprehensive income attributable to noncontrolling interests		(1)		(2)		(2)
Comprehensive income (loss) attributable to Prudential Insurance Company of America.		$	9,029	$	(7,289)	$	2,198

(1)   Includes cash flow hedges. See Note 21  for information on cash flow hedges.

B-66

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

The balance of and changes in each component of “Accumulated other comprehensive income (loss) attributable to Prudential Insurance Company of America” for the years ended December 31, are as follows (net of taxes):

	Accumulated Other Comprehensive Income (Loss) Attributable to Prudential Insurance Company of America
	Foreign Currency Translation Adjustments		Net Unrealized Investment Gains (Losses) (1)		Pension Postretirement Unrecognized Net Periodic Benefit (Cost)		Total Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance, December 31, 2006	$	115	$	485	$	(682)	$	(82)
Change in component during year(2)		8		(273)		521		256
Balance, December 31, 2007		123		212		(161)		174
Change in component during year(2)		(24)		(6,033)		(707)		(6,764)
Balance, December 31, 2008		99		(5,821)		(868)		(6,590)
Change in component during year		6		7,332		(620)		6,718
Impact of adoption of guidance for other-than-
temporary impairments of debt securities(3)		-		(575)		-		(575)
Balance, December 31, 2009	$	105	$	936	$	(1,488)	$	(447)

(1)   Includes cash flow hedges. See Note 21 for information on cash flow hedges.

(2)   Net unrealized investment gains (losses) for 2008 and 2007 includes the purchase of fixed maturities from an affiliate of $(145) million and $(3) million respectively.

(3)   See Note 2 for additional information on the adoption of guidance for other-than-temporary impairments of debt securities.

Dividend Restrictions

New Jersey insurance law provides that dividends or distributions may be declared or paid by Prudential Insurance without prior regulatory approval only from unassigned surplus, as determined pursuant to statutory accounting principles, less unrealized investment gains and losses and revaluation of assets. Unassigned surplus of Prudential Insurance was $5,295 million at December 31, 2009. There were applicable adjustments for cumulative unrealized investment gains of $925 million at December 31, 2009. In addition, Prudential Insurance must obtain non-disapproval from the New Jersey insurance regulator before paying a dividend or distribution if the dividend or distribution, together with other dividends or distributions made within the preceding twelve months, would exceed the greater of 10% of Prudential Insurance’s surplus as of the preceding December 31 ($10,042 million as of December 31, 2009) or its statutory net gain from operations for the twelve month period ending on the preceding December 31, excluding realized investment gains and losses ($2,424 million for the year ended December 31, 2009). The laws regulating dividends of Prudential Insurance’s other insurance subsidiaries domiciled in other states are similar, but not identical, to New Jersey’s.

Statutory Net Income and Surplus

Prudential Insurance and its U.S. insurance subsidiaries are required to prepare statutory financial statements in accordance with statutory accounting practices prescribed or permitted by the insurance department of the state of domicile. Statutory accounting practices primarily differ from U.S. GAAP by charging policy acquisition costs to expense as incurred, establishing future policy benefit liabilities using different actuarial assumptions as well as valuing investments and certain assets and

B-67

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

accounting for deferred taxes on a different basis. Statutory net income of Prudential Insurance amounted to $1,101 million, $(808) million and $1,274 million for the years ended December 31, 2009, 2008 and 2007, respectively. Statutory capital and surplus of Prudential Insurance amounted to $10,042 million and $6,432 million at December 31, 2009 and 2008, respectively.

The New York State Insurance Department recognizes only statutory accounting practices for determining and reporting the financial condition and results of operations of an insurance company for determining its solvency under the New York Insurance Law and for determining whether its financial condition warrants the payment of a dividend to its policyholders. No consideration is given by the New York State Insurance Department to financial statements prepared in accordance with GAAP in making such determinations.

16.    STOCK-BASED COMPENSATION

In 2009 and prior, Prudential Financial issued stock-based compensation awards to employees of the Company, including stock options, restricted stock units, restricted stock awards, and performance shares, under a plan authorized by Prudential Financial’s Board of Directors.

Prudential Financial recognizes the cost resulting from all share-based payments in the financial statements in accordance with the authoritative guidance on accounting for stock based compensation and applies the fair value based measurement method in accounting for share-based payment transactions with employees except for equity instruments held by employee share ownership plans.

Upon the adoption of the revised authoritative guidance on accounting for stock based compensation on January 1, 2006, Prudential Financial revised its approach to the recognition of compensation costs for awards granted to retirement-eligible employees and awards that vest when an employee becomes retirement-eligible to apply the non-substantive vesting period approach to all new share-based compensation awards granted after January 1, 2006. Under this approach, all compensation cost is recognized on the date of grant for awards issued to retirement-eligible employees, or over the period from the grant date to the date retirement eligibility is achieved (as defined by the plan), if that is expected to occur during the nominal vesting period (generally three years). The Company accounts for those awards granted between (a) the adoption on January 1, 2003 of the fair value recognition provisions of authoritative guidance on accounting for stock based compensation, and (b) the adoption on January 1, 2006 of revised authoritative guidance on accounting for stock based compensation, which specify that an employee vests in the award upon retirement using the nominal vesting period approach. Under this approach, the Company records compensation expense over the nominal vesting period.  If the employee retires before the end of the nominal vesting period, any remaining unrecognized compensation expense is recorded at the date of retirement.

The results of operations of the Company for the years ended December 31, 2009, 2008 and 2007, include allocated costs of $14 million, $20 million and $24 million, respectively, associated with employee stock options and $37 million, $27 million, and $46 million, respectively, associated with employee restricted stock shares, restricted stock units, and performance shares issued by Prudential Financial to certain employees of the Company.

17.    EMPLOYEE BENEFIT PLANS

Pension and Other Postretirement Plans

The Company has funded and non-funded contributory and non-contributory defined benefit pension plans, which cover substantially all of its employees as well as employees of certain destacked subsidiaries. For some employees, benefits are based on final average earnings and length of service, while benefits for other employees are based on an account balance that takes into consideration age, service and earnings during their career.

B-68

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

The Company provides certain health care and life insurance benefits for its retired employees (including those of certain destacked subsidiaries), their beneficiaries and covered dependents (“other postretirement benefits”). The health care plan is contributory; the life insurance plan is non-contributory. Substantially all of the Company’s U.S. employees may become eligible to receive other postretirement benefits if they retire after age 55 with at least 10 years of service or under certain circumstances after age 50 with at least 20 years of continuous service. The Company has elected to amortize its transition obligation for other postretirement benefits over 20 years.

As discussed in Note 2, the revised authoritative guidance eliminated the provisions that allowed plan assets and obligations to be measured as of a date not more than three months prior to the reporting entity’s balance sheet date.  The revised authoritative guidance requires an employer on a prospective basis to measure the funded status of its plans as of its fiscal year-end.  The Company adopted this guidance on December 31, 2008 and the impact of changing from a September 30 measurement date to a December 31 measurement date was a net after-tax increase to “Retained earnings” of $27 million.

Prepaid benefits costs and accrued benefit liabilities are included in “Other assets” and “Other liabilities,” respectively, in the Company’s Consolidated Statements of Financial Position. The status of these plans as of December 31, 2009 and 2008, is summarized below:

	Pension Benefits				Other Postretirement Benefits
	2009		2008		2009		2008
		(in millions)
Change in benefit obligation
Benefit obligation at end of prior year period	$	(7,481)	$	(7,248)	$	(1,994)	$	(2,164)
Effect of measurement date change		-		(22)		-		13
Benefit obligation at the beginning of period		(7,481)		(7,270)		(1,994)		(2,151)
Service cost		(120)		(116)		(10)		(10)
Interest cost		(441)		(445)		(115)		(124)
Plan participants’ contributions		-		-		(21)		(18)
Medicare Part D subsidy receipts		-		-		(14)		(11)
Amendments		-		-		-		3
Actuarial gains/(losses), net		(392)		(223)		(172)		93
Settlements		-		-		-		-
Special termination benefits		(1)		(2)		-		-
Benefits paid		494		519		209		218
Foreign currency changes and other		(16)		56		(5)		6
Benefit obligation at end of period	$	(7,957)	$	(7,481)	$	(2,122)	$	(1,994)
Change in plan assets
Fair value of plan assets at end of prior year period	$	9,900	$	9,992	$	1,417	$	2,104
Effect of measurement date change		-		72		-		(4)
Fair value of plan assets at beginning of period		9,900		10,064		1,417		2,100
Actual return on plan assets		90		334		278		(463)
Employer contributions		60		78		16		18
Plan participants’ contributions		-		-		21		18
Disbursement for settlements		-		-		-		-

B-69

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Benefits paid		(494)		(519)		(209)		(218)
Foreign currency changes and other		16		(57)		(4)		(38)
Fair value of plan assets at end of period	$	9,572	$	9,900	$	1,519	$	1,417
Funded status at end of period	$	1,615	$	2,419	$	(603)	$	(577)
Amounts recognized in the Statements of Financial Position
Prepaid benefit cost	$	2,523	$	3,230	$	-	$	-
Accrued benefit liability		(908)		(811)		(603)		(577)
Net amount recognized	$	1,615	$	2,419	$	(603)	$	(577)
Items recorded in “Accumulated other comprehensive income”
not yet recognized as a component of net periodic (benefit) cost:
Transition obligation	$	-	$	-	$	1	$	2
Prior service cost		105		131		(65)		(76)
Net actuarial loss		1,674		661		660		700
Net amount not recognized	$	1,779	$	792	$	596	$	626
Accumulated benefit obligation	$	(7,584)	$	(7,260)	$	(2,122)	$	(1,994)

In addition to the plan assets above, the Company in 2007 established an irrevocable trust, commonly referred to as a “rabbi trust,” for the purpose of holding assets of the Company to be used to satisfy its obligations with respect to certain non-qualified retirement plans ($779 million and $711 million benefit obligation at December 31, 2009 and 2008, respectively). Assets held in the rabbi trust are available to the general creditors of the Company in the event of insolvency or bankruptcy. The Company may from time to time in its discretion make contributions to the trust to fund accrued benefits payable to participants in one or more of the plans, and, in the case of a change in control of the Company, as defined in the trust agreement, the Company will be required to make contributions to the plans to fund the accrued benefits, vested and unvested, payable on a pretax basis to participants in the plans. The Company made a discretionary payment of $95 million to the trust during both 2009 and 2008. As of December 31, 2009 and 2008, the assets in these trusts had a carrying value of $281 million and $169 million, respectively.

The Company also maintains a separate rabbi trust established at the time of the combination of its retail securities brokerage and clearing operations with those of Wachovia for the purpose of holding assets of the Company to be used to satisfy its obligations with respect to certain non-qualified retirement plans ($75 million and $75 million benefit obligation at December 31, 2009 and 2008, respectively), as well as certain cash-based deferred compensation arrangements. As of December 31, 2009 and 2008, the assets in the trust had a carrying value of $124 million and $157 million, respectively.

Pension benefits for foreign plans comprised 3% and 2% of the ending benefit obligation for 2009 and 2008. Foreign pension plans comprised 2% of the ending fair value of plan assets for 2009 and 2008. There are no material foreign postretirement plans.

Information for pension plans with a projected benefit obligation in excess of plan assets
	2009		2008
		(in millions)

B-70

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Projected benefit obligation	$	1,065	$	811
Fair value of plan assets		157		-

B-71

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

	Information for pension plans with an accumulated benefit obligation in excess of plan assets
		2009		2008
			(in millions)
Accumulated benefit obligation		$	969	$	740
Fair value of plan assets			157		-

In 2008 the pension plan purchased annuity contracts from Prudential Insurance for $2 million. There were no purchases of annuity contracts in 2009 from Prudential Insurance. The approximate future annual benefit payment payable by Prudential Insurance for all annuity contracts was $20 million and $16 million as of December 31, 2009 and 2008, respectively.

There were no pension plan amendments in 2009 or 2008.  There were no postretirement plan amendments in 2009. The benefit obligation for other postretirement benefits decreased by $3 million in 2008 related to plan amendments, primarily due to cost sharing changes.

Components of Net Periodic Benefit Cost

Net periodic (benefit) cost included in “General and administrative expenses” in the Company’s Consolidated Statements of Operations for the years ended December 31, includes the following components:

	Pension Benefits						Other Postretirement Benefits
	2009		2008		2007		2009		2008		2007
		(in millions)
Service cost	$	120	$	116	$	130	$	10	$	10	$	12
Interest cost		441		445		417		115		124		136
Expected return on plan assets		(729)		(717)		(769)		(107)		(161)		(93)
Amortization of transition obligation		-		-		-		1		1		1
Amortization of prior service cost		26		28		29		(11)		(11)		(6)
Amortization of actuarial (gain) loss, net		20		17		20		42		1		15
Settlements		-		-		-		-		-		-
Special termination benefits		1		2		4		-		-		-
Net periodic (benefit) cost	$	(121)	$	(109)	$	(169)	$	50	$	(36)	$	65

Certain employees were provided special termination benefits under non-qualified plans in the form of unreduced early retirement benefits as a result of their involuntary termination.

B-72

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Changes in Accumulated Other Comprehensive Income

The amounts recorded in “Accumulated other comprehensive income” as of the end of the period, which have not yet been recognized as a component of net periodic (benefit) cost, and the related changes in these items during the period that are recognized in “Other Comprehensive Income” are as follows:

		Pension Benefits						Other Postretirement Benefits
		Transition Obligation		Prior Service Cost		Net Actuarial (Gain) Loss		Transition Obligation		Prior Service Cost		Net Actuarial (Gain) Loss
			(in millions)
Balance,  December 31, 2007		$	-	$	166	$	85	$	2	$	(88)	$	172
	Effect of measurement date change		-		(7)		(4)		1		3		-
	Amortization for the period		-		(28)		(17)		(1)		11		(1)
	Deferrals for the period		-		-		606		-		(3)		531
	Impact of foreign currency changes and other		-		-		(9)		-		1		(2)
Balance,  December 31, 2008			-		131		661		2		(76)		700
	Amortization for the period		-		(26)		(20)		(1)		11		(42)
	Deferrals for the period		-		-		1,031		-		-		1
	Impact of foreign currency changes and other		-		-		2		-		-		1
Balance,  December 31, 2009		$	-	$	105	$	1,674	$	1	$	(65)	$	660

The amounts included in “Accumulated other comprehensive income” expected to be recognized as components of net periodic (benefit) cost in 2010 are as follows:
	Pension Benefits		Other Postretirement Benefits
	(in millions)
Amortization of transition obligation	$	-	$	1
Amortization of prior service cost		23		(12)
Amortization of actuarial (gain) loss, net		26		39
Total	$	49	$	28

B-73

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

The Company’s assumptions related to the calculation of the domestic benefit obligation (end of period) and the determination of net periodic (benefit) cost (beginning of period) are presented in the table below. The assumptions for 2007 are as of September 30. The assumptions for 2008 use September 30, 2007 for beginning of period and December 31, 2008 for end of period.  The assumptions for 2009 use December 31, 2008 as the beginning of period and December 31, 2009 for end of period:

		Pension Benefits				Other Postretirement Benefits
		2009		2008	2007	2009	2008	2007
Weighted-average assumptions
Discount rate (beginning of period)			6.00%	6.25%	5.75%	6.00%	6.00%	5.75%
Discount rate (end of period)			5.75%	6.00%	6.25%	5.50%	6.00%	6.00%
Rate of increase in compensation levels (beginning of period)			4.50%	4.50%	4.50%	4.50%	4.50%	4.50%
Rate of increase in compensation levels (end of period)			4.50%	4.50%	4.50%	4.50%	4.50%	4.50%
Expected return on plan assets (beginning of period)			7.50%	7.75%	8.00%	8.00%	8.00%	9.25%
Health care cost trend rates (beginning of period)						5.00-8.00%	5.00-8.75%	5.09-9.06%
Health care cost trend rates (end of period)						5.00-7.50%	5.00-8.00%	5.00-8.00%
For 2009, 2008 and 2007, the ultimate health care cost trend rate after
	gradual decrease until: 2014, 2012, 2009 (beginning of period)					5.00%	5.00%	5.00%
For 2009, 2008 and 2007, the ultimate health care cost trend rate
	after gradual decrease until: 2015, 2014, 2012 (end of period)					5.00%	5.00%	5.00%

The domestic discount rate used to value the pension and postretirement benefit obligations is based upon rates commensurate with current yields on high quality corporate bonds. The first step in determining the discount rate is the compilation of approximately 500 Aa-rated bonds across the full range of maturities. Since yields can vary widely at each maturity point, the Company generally avoids using the highest and lowest yielding bonds at the maturity points, so as to avoid relying on bonds that might be mispriced or misrated. This refinement process generally results in having a distribution from the 10th to 90th percentile. A spot yield curve is developed from this data that is then used to determine the present value of the expected disbursements associated with the pension and postretirement obligations, respectively. This results in the present value for each respective benefit obligation. A single discount rate is calculated that results in the same present value. The rate is then rounded to the nearest 25 basis points.

The pension and postretirement expected long-term rates of return on plan assets for 2009 were determined based upon an approach that considered an expectation of the allocation of plan assets during the measurement period of 2009. Expected returns are estimated by asset class as noted in the discussion of investment policies and strategies below. Expected returns on asset classes are developed using a building-block approach that is forward looking and are not strictly based upon historical returns. The building blocks for equity returns include inflation, real return, a term premium, an equity risk premium, capital appreciation and the effect of active management, expenses and the effect of rebalancing.  The building blocks for fixed maturity returns include inflation, real return, a term premium, credit spread, capital appreciation and the effect of active management, expenses and the effect of rebalancing.

The Company applied the same approach to the determination of the expected long-term rate of return on plan assets in 2010.  The expected long-term rate of return for 2010 is 7.50% and 7.50% for the pension and postretirement plans, respectively.

The Company, with respect to pension benefits, uses market related value to determine the components of net periodic (benefit) cost. Market related value is a measure of asset value that reflects the difference between actual and expected return on assets over a five-year period.

The assumptions for foreign pension plans are based on local markets. There are no material foreign postretirement plans.

B-74

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one-percentage point increase and decrease in assumed health care cost trend rates would have the following effects:

	Other Postretirement Benefits
	(in millions)
One percentage point increase
Increase in total service and interest costs	$	6
Increase in postretirement benefit obligation		116
One percentage point decrease
Decrease in total service and interest costs	$	6
Decrease in postretirement benefit obligation		103

Plan Assets

The investment goal of the domestic pension plan assets is to generate an above benchmark return on a diversified portfolio of stocks, bonds and other investments, while meeting the cash requirements for a pension obligation that includes a traditional formula principally representing payments to annuitants and a cash balance formula that allows lump sum payments and annuity payments. The pension plan risk management practices include guidelines for asset concentration, credit rating and liquidity. The pension plan does not invest in leveraged derivatives. Derivatives such as futures contracts are used to reduce transaction costs and change asset concentration, while interest rate swaps are used to adjust duration.

The investment goal of the domestic postretirement plan assets is to generate an above benchmark return on a diversified portfolio of stocks, bonds, and other investments, while meeting the cash requirements for the postretirement obligation that includes a medical benefit including prescription drugs, a dental benefit, and a life benefit. The postretirement plans risk management practices include guidelines for asset concentration, credit rating, liquidity, and tax efficiency. The postretirement plan does not invest in leveraged derivatives. Derivatives such as futures contracts are used to reduce transaction costs and change asset concentration, while interest rate swaps are used to adjust duration.

The plan fiduciaries for the Company’s pension and postretirement plans have developed guidelines for asset allocations reflecting a percentage of total assets by asset class, which are reviewed on an annual basis. Asset allocation targets as of the December 31, 2009 are as follows:

	Pension		Postretirement
	Minimum	Maximum	Minimum	Maximum
Asset Category
U.S. Equities	2%	10%	33%	44%
International Equities	2%	10%	1%	7%
Fixed Maturities	53%	74%	0%	59%
Short-term Investments	0%	12%	0%	63%
Real Estate	1%	13%	0%	0%
Other	3%	21%	0%	0%

B-75

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

To implement the investment strategy, plan assets are invested in funds that primarily invest in securities that correspond to one of the asset categories under the investment guidelines. However, at any point in time, some of the assets in a fund may be of a different nature than the specified asset category.

  Assets held with Prudential Insurance are in either pooled separate accounts or single client separate accounts.  Pooled separate accounts hold assets for multiple investors.  Each investor owns a “unit of account.”  Single client separate accounts hold assets for only one investor, the domestic qualified pension plan and each security in the fund is treated as individually owned.  Assets held with a bank are either in common/collective trusts or single client trusts. Common or collective trusts hold assets for more than one investor.  Each investor owns a “unit of account.”  Single client trusts hold assets for only one investor, the domestic qualified pension plan and each security in the fund is treated as individually owned.

There were no investments in Prudential Financial Common Stock as of December 31, 2009 and December 31, 2008 for either the pension or postretirement plans. Pension plan assets of $6,393 million and $6,299 million are included in the Company’s separate account assets and liabilities as of December 31, 2009 and December 31, 2008, respectively.

The authoritative guidance around fair value established a framework for measuring fair value.  Fair value is disclosed using a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value, as described in Note 19.

The following describes the valuation methodologies used for pension and postretirement plans assets measured at fair value.

Insurance Company Pooled Separate Accounts, Common or Collective Trusts, and United Kingdom Insurance Pooled Funds – Insurance company pooled separate accounts are invested via group annuity contracts issued by Prudential Insurance. Assets are represented by a “unit of account.”  The redemption value of those units is based on a per unit value whose value is the result of the accumulated values of underlying investments. The underlying investments are valued in accordance with the corresponding valuation method for the investments held.

Equities – See Note 19 for a discussion of the valuation methodologies for equity securities.

U.S. Government Securities (both Federal and State & Other), Non–U.S. Government Securities, and Corporate Debt - See Note 19 for a discussion of the valuation methodologies for fixed maturity securities.

Interest Rate Swaps –See Note 19 for a discussion of the valuation methodologies for derivative instruments.

Guaranteed Investment Contract - The value is based on contract cash flows and available market rates for similar investments.

Registered Investment Companies (Mutual Funds) - Securities are priced at the net asset value (“NAV”) of shares.

Unrealized Gain (Loss) on Investment of Securities Lending Collateral - This value is the contractual position relative to the investment of securities lending collateral.

Real Estate - The values are determined through an independent appraisal process. The estimate of fair value is based on three approaches; (1) current cost of reproducing the property less deterioration and functional/economic obsolescence; (2) discounting a series of income streams and reversion at a specific yield or by directly capitalizing a single year income estimate by an appropriate factor; and (3) value indicated by recent sales of comparable properties in the market. Each approach requires the exercise of subjective judgment.

Short-term Investments - Securities are valued initially at cost and thereafter adjusted for amortization of any discount or premium (i.e., amortized cost). Amortized Cost approximates fair value.

B-76

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Partnerships - The value of interests owned in partnerships is based on valuations of the underlying investments that include private placements, structured debt, real estate, equities, fixed maturities, commodities and other investments.

 Real Estate Investment Trusts - The value of interests in Real Estate Investment Trusts (“REIT”) is based on the appraised value of the properties held by the REIT as determined by independent qualified appraisers.

Structured Debt (Gateway Recovery Trust) - The value is based primarily on unobservable inputs including probability weighted cash flows and reinvestment yield assumptions.

Hedge Fund - The value of interests in the hedge fund is based on the underlying investments that include equities, debt and other investments.

 Variable Life Insurance Policies – These assets are held in group and individual variable life insurance policies issued by Prudential Insurance.  Group policies are invested in Insurance Company Pooled Separate Accounts.  Individual policies are invested in Registered Investment Companies (Mutual Funds).

Pension plan asset allocations in accordance with the investment guidelines as of December 31, 2009, are as follows:

				As of December 31, 2009
				Level 1		Level 2		Level 3		Total
				(in millions)
U.S. Equities:
	Pooled separate accounts (1)			$	-	$	782	$	-	$	782
	Common/collective trusts (1)				-		128		-		128
	Other (2)				33		5		-		38
			Sub-total								948
International Equities:
	Pooled separate accounts (3)				-		23		-		23
	Common/collective trusts (4)				-		156		-		156
	Equities				61		-		-		61
			Sub-total								240
Fixed Maturities:
	Pooled separate accounts (5)				-		867		-		867
	Common/collective trusts (6)				-		345		-		345
	U.S. government securities (federal):
		Mortgage backed			-		70		-		70
		Other U.S. government securities			-		2,085		-		2,085
	U.S. government securities (state & other)				-		385		-		385
	Non-U.S. government securities				-		13		-		13
	United Kingdom insurance pooled funds (7)				-		90		-		90
	Corporate Debt:
		Corporate bonds (8)			-		2,008		1		2,009
		Asset backed			-		102		-		102
		Collateralized Mortgage Obligations (CMO) (9)			-		881		2		883

B-77

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

	Interest rate swaps (Notional amount: $5,686)					-		215		-		215
	Guaranteed investment contract					-		1		-		1
	Other (2)					61		(1)		120		180
	Unrealized gain (loss) on investment of securities lending
		collateral (10)				-		(182)		-		(182)
			Sub-total									7,063
Short-term Investments:
	Pooled separate accounts					-		10		-		10
	United Kingdom insurance pooled funds					-		6		-		6
			Sub-total									16
Real Estate:
	Pooled separate accounts (11)					-		-		187		187
	Partnerships					-		-		48		48
	Other					-		-		-		-
			Sub-total									235
Other:
	Structured debt (Gateway Recovery Trust)					-		-		572		572
	Partnerships					-		-		280		280
	Hedge fund					-		-		218		218
			Sub-total									1,070
				Total	$	155	$	7,989	$	1,428	$	9,572

(1)   These categories invest in U.S. equity funds whose objective is to track or outperform various indexes.

(2)   Primarily cash and cash equivalents, short term investments, payables and receivables and open future contract positions (including fixed income collateral).

(3)   This category invests in large cap international equity funds whose objective is to track an index.

(4)   This category invests in international equity funds, primarily large cap, whose objective is to outperform various indexes.

(5)   This category invests in bond funds, primarily highly rated private placement securities.

(6)   This category invests in bond funds, primarily highly rated public securities whose objective is to outperform an index.

(7)   This category invests in bond funds, primarily highly rated corporate securities.

(8)   This category invests in highly rated corporate securities.

(9)   This category invests in highly rated Collateralized Mortgage Obligations.

(10)   The contractual net value of the investment of securities lending collateral invested in primarily short-term bond funds is $1,231 million and the liability for securities lending collateral is $1,413 million.

(11)   This category invests in commercial real estate and real estate securities funds, whose objective is to outperform an index

Changes in Fair Value of Level 3 Pension Assets

	Year Ended December 31, 2009
	Fixed Maturities - Corporate Debt - Corporate Bonds		Fixed Maturities - Corporate Debt - CMO		Fixed Maturities - Other		Real Estate - Pooled Separate Accounts
	(in millions)
Fair Value, beginning of period	$	13	$	2	$	161	$	323

B-78

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

	Actual Return on Assets:
		Relating to assets still held at the reporting date		-		-		-		(125)
		Relating to assets sold during the period		-		-		-		(1)
	Purchases, sales and settlements			(3)		-		(41)		(10)
	Transfers in and /or out of Level 3			(9)		-		-		-
Fair Value, end of period			$	1	$	2	$	120	$	187

B-79

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

			Year Ended December 31, 2009
			Real Estate - Partnerships		Other -  Structured Debt		Other - Partnerships		Other - Hedge Fund
			(in millions)
Fair Value, beginning of period			$	64	$	477	$	197	$	176
	Actual Return on Assets:
		Relating to assets still held at the reporting date		(15)		95		17		42
		Relating to assets sold during the period		-		-		-		-
	Purchases, sales and settlements			(1)		-		66		-
	Transfers in and /or out of Level 3			-		-		-		-
Fair Value, end of period			$	48	$	572	$	280	$	218

	Postretirement plan asset allocations in accordance with the investment guidelines as of December 31, 2009  are as follows:
				As of December 31, 2009
				Level 1		Level 2		Level 3		Total
				(in millions)
U.S. Equities:
	Variable Life Insurance Policies:
		Pooled separate accounts (1)		$	-	$	155	$	-	$	155
		Registered investment companies			253		-		-		253
	Common trusts (2)				-		95		-		95
	Equities				97		-		-		97
			Sub-total								600
International Equities:
	Variable Life Insurance Policies
		Pooled separate accounts (3)			-		39		-		39
	Common trusts (4)				-		19		-		19
			Sub-total								58
Fixed Maturities:
	Common trusts (5)				-		29		-		29
	U.S. government securities (federal):
			Mortgage Backed		-		33		-		33
			Other U.S. government securities		-		84		-		84
	U.S. government securities (state & other)				-		1		-		1
	Non-U.S. government securities				-		3		-		3
	Corporate Debt:
		Corporate bonds (6)			-		259		1		260
		Asset Backed			-		98		-		98
		Collateralized Mortgage Obligations (CMO) (7)			-		215		2		217
	Interest rate swaps (Notional amount: $322)				-		4		-		4

B-80

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

	Other (8)					110		-		12		122
			Sub-total									851
Short-term Investments:
	Variable Life Insurance Policies
		Pooled separate accounts				-		1		-		1
	Registered investment companies					9		-		-		9
			Sub-total									10
				Total	$	469	$	1,035	$	15	$	1,519

(1)   This category invests in U.S. equity funds, primarily large cap equities whose objective is to track an index.

(2)   This category invests in U.S. equity funds, primarily large cap equities.

(3)   This category invests in international equity funds, primarily large cap international equities whose objective is to track an index.

(4)   This category fund invests in large cap international equity fund whose objective is to outperform an index.

(5)   This category invests in U.S. bonds funds.

(6)   This category invests in highly rated corporate bonds.

(7)   This category invests in highly rated Collateralized Mortgage Obligations.

(8)   Cash and cash equivalents, short term investments, payables and receivables and open future contract positions (including fixed income collateral).

Changes in Fair Value of Level 3 Postretirement Assets

			Year Ended December 31, 2009
			Fixed Maturities - Corporate Debt - Corporate Bonds		Fixed Maturities - Corporate Debt - CMO		Fixed Maturities - Other
			(in millions)
Fair Value, beginning of period			$	3	$	2	$	11
	Actual Return on Assets:
		Relating to assets still held at the reporting date		-		-		-
		Relating to assets sold during the period		-		-		-
	Purchases, sales and settlements			(2)		-		1
	Transfers in and /or out of Level 3			-		-		-
Fair Value, end of period			$	1	$	2	$	12

A summary of pension and postretirement plan asset allocation as of the year ended December 31, are as follows:
	Pension Percentage of Plan Assets				Postretirement Percentage of Plan Assets
	2009		2008		2009		2008
Asset Category
U.S. Equities	10	%	8	%	40	%	37	%
International Equities	3		2		4		4
Fixed Maturities	74		77		55		58

B-81

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Short-term Investments	-		1		1		1
Real Estate	2		4		-		-
Other	11		8		-		-
Total	100	%	100	%	100	%	100	%

The expected benefit payments for the Company's pension and postretirement plans, as well as the expected Medicare Part D subsidy receipts related to the Company's postretirement plan, for the years indicated are as follows:
	Pension Benefits		Other Postretirement Benefits		Other Postretirement Benefits - Medicare Part D Subsidy Receipts
	(in millions)
2010	$	522	$	195	$	18
2011		515		196		18
2012		523		195		20
2013		529		195		21
2014		540		193		21
2015-2019		2,879		921		110
Total	$	5,508	$	1,895	$	208

The Company anticipates that it will make cash contributions in 2010 of approximately $55 million to the pension plans and approximately $13 million to the postretirement plans.

Postemployment Benefits

 The Company accrues postemployment benefits for income continuance and health and life benefits provided to former or inactive employees who are not retirees. The net accumulated liability for these benefits at December 31, 2009 and 2008 was $38 million and $39 million, respectively, and is included in “Other liabilities.”

Other Employee Benefits

 The Company sponsors voluntary savings plans for employees (401(k) plans). The plans provide for salary reduction contributions by employees and matching contributions by the Company of up to 4% of annual salary. The matching contributions by the Company included in “General and administrative expenses” were $53 million, $51 million and $51 million for the years ended December 31, 2009, 2008 and 2007, respectively.

B-82

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

18.    INCOME TAXES

 The components of income tax expense (benefit) for the years ended December 31, were as follows:

	2009			2008			2007
	(in millions)
Current tax expense (benefit)
U.S.	$	343		$	(309	)	$	387
State and local		(2	)		5			(10	)
Foreign		9			20			59
Total		350			(284	)		436
Deferred tax expense (benefit)
U.S.		(747	)		(61	)		148
State and local		9			3			(3	)
Foreign		(3	)		5			(3	)
Total		(741	)		(53	)		142
Total income tax expense (benefit) on continuing operations before equity in earnings of operating joint ventures	$	(391	)	$	(337	)	$	578
Income tax expense (benefit) on equity in earnings of operating joint ventures		807			(109	)		145
Income tax expense (benefit) on discontinued operations		—			(2	)		(2)
Income tax expense (benefit) reported in  equity related to:
Other comprehensive income (loss)		3,054			(3,594	)		195
Impact on Company’s investment in Wachovia Securities due to addition of A.G. Edwards business		(59	)		561			—
Stock-based compensation programs		10			(8	)		(59	)
Cumulative effect of changes in accounting principles		310			10			(87	)
Other		—			—			18
Total income taxes	$	3,731		$	(3,479	)	$	788

The Company’s actual income tax expense on continuing operations before equity in earnings of operating joint ventures for the years ended December 31, differs from the expected amount computed by applying the statutory federal income tax rate of 35% to income from continuing operations before income taxes and equity in earnings of operating joint ventures for the following reasons:

	2009				2008			2007
	(in millions)
Expected federal income tax expense (benefit)	$	152		$	(277	)	$	781
Non-taxable investment income		(120	)		(22	)		(178	)
Low income housing and other tax credits		(68	)		(79	)		(67	)
Expiration of statute of limitations and related interest		(272	)		—			—
Other		(83	)		41			42
Total income tax expense (benefit) on continuing operations before equity in earnings of operating joint ventures	$	(391	)	$	(337	)	$	578

B-83

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Deferred tax assets and liabilities at December 31, resulted from the items listed in the following table:

	2009			2008
	(in millions)
Deferred tax assets
Policyholders’ dividends	$	150		$	402
Insurance reserves		344			—
Net operating and capital loss carryforward		39			46
Net unrealized investment losses		—			3,591
Employee benefits		244			—
Investments		532			630
Other		92			53
Deferred tax assets before valuation allowance		1,401			4,722
Valuation allowance		(8	)		(18	)
Deferred tax assets after valuation allowance		1,393			4,704
Deferred tax liabilities
Insurance reserves		—			686
Net unrealized investment gains		678			—
Deferred policy acquisition costs		1,593			2,059
Employee benefits		—			95
Deferred tax liabilities		2,271			2,840
Net deferred tax asset (liability)	$	(878	)	$	1,864

The application of U.S. GAAP requires the Company to evaluate the recoverability of deferred tax assets and establish a valuation allowance if necessary to reduce the deferred tax asset to an amount that is more likely than not to be realized. Considerable judgment is required in determining whether a valuation allowance is necessary, and if so, the amount of such valuation allowance. In evaluating the need for a valuation allowance the Company considers many factors, including: (1) the nature of the deferred tax assets and liabilities; (2) whether they are ordinary or capital; (3) in which tax jurisdictions they were generated and the timing of their reversal; (4) taxable income in prior carryback years as well as projected taxable earnings exclusive of reversing temporary differences and carryforwards; (5) the length of time that carryovers can be utilized in the various taxing jurisdictions; (6) any unique tax rules that would impact the utilization of the deferred tax assets; and (7) any tax planning strategies that the Company would employ to avoid a tax benefit from expiring unused. Although realization is not assured, management believes it is more likely than not that the deferred tax assets, net of valuation allowances, will be realized.

A valuation allowance has been recorded primarily related to tax benefits associated with federal net operating losses and state and local deferred tax assets. The valuation allowance as of December 31, 2009 and 2008, respectively, includes $0 million and $1 million recorded in connection with state deferred tax assets and $8 million and $17 million recorded in connection with foreign deferred tax assets. Adjustments to the valuation allowance will be made if there is a change in management’s assessment of the amount of the deferred tax asset that is realizable.

At December 31, 2009 and 2008, respectively, the Company had federal net operating and capital loss carryforwards of $108 million and $130 million, which expire between 2014 and 2029. At December 31, 2009 and 2008, respectively, the Company had state net operating and capital loss carryforwards for tax purposes approximating $5 million and $5 million, which expire between 2010 and 2030

B-84

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

The Company does not provide U.S. income taxes on unremitted foreign earnings of its non-U.S. operations, other than its Taiwan investment management subsidiary.  During 2009, 2008 and 2007, the Company made no changes with respect to its repatriation assumptions. The Company had undistributed earnings of foreign subsidiaries, where it assumes permanent reinvestment, of $187 million at December 2009, $166 million at December 2008, and $130 million at December 2007, for which U.S. deferred taxes have not been provided. Determining the tax liability that would arise if these earnings were remitted is not practicable.

On January 1, 2007, the Company adopted the revised authoritative guidance for accounting for uncertainty in income taxes which prescribes a comprehensive model for how a company should recognize, measure, present, and disclose in its financial statements uncertain tax positions that a company has taken or expects to take on a tax return.  Adoption of this new guidance resulted in a decrease to the Company’s income tax liability and an increase to retained earnings of $35 million as of January 1, 2007.

The Company’s unrecognized tax benefits as of January 1, 2007 and as of December 31, 2007, 2008 and 2009 are as follows:

		Unrecognized tax benefits prior to 2002			Unrecognized tax benefits 2002 and forward			Total unrecognized tax benefits all years
	(in millions)
Amounts as of January 1, 2007	$	389		$	124		$	513
Increases in unrecognized tax benefits taken in prior period		—			17			17
(Decreases) in unrecognized tax benefits taken in prior period		(3	)		(6	)		(9	)
Amounts as of December 31, 2007	$	386		$	135		$	521
Increases in unrecognized tax benefits taken in prior period		—			98			98
(Decreases) in unrecognized tax benefits taken in prior period		—			(27	)		(27	)
Amounts as of December 31, 2008	$	386		$	206		$	592
Increases in unrecognized tax benefits taken in prior period		—			43			43
(Decreases) in unrecognized tax benefits taken in prior period		(22	)		(21	)		(43	)
Settlements with Parent		(150	)		(95	)		(245	)
(Decrease) in unrecognized tax benefits as a result of lapse of the applicable statute of limitations		(214	)		—			(214	)
Amounts as of December 31, 2009	$	—		$	133		$	133
Unrecognized tax benefits that, if recognized, would favorably impact the effective rate as of December 31, 2007	$	386		$	82		$	468
Unrecognized tax benefits that, if recognized, would favorably impact the effective rate as of December 31, 2008	$	386		$	88		$	474
Unrecognized tax benefits that, if recognized, would favorably impact the effective rate as of December 31, 2009	$	—		$	13		$	13

The Company classifies all interest and penalties related to tax uncertainties as income tax expense (benefit).  In 2009, 2008 and 2007, the Company recognized $(138) million, $52 million and $59 million in the consolidated statement of operations and recognized $(18) million, $190 million and $138 million in liabilities in the consolidated statement of financial position for tax-related interest and penalties.

The Company's liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by the Internal Revenue Service (“IRS”) or other taxing authorities. Audit periods remain open for review until the statute of limitations has passed. Generally, for tax years which produce net operating losses, capital losses or tax credit carryforwards (“tax attributes”), the statute of limitations does not close, to the extent of these tax attributes, until the expiration of the statute of limitations for the tax year in which they are fully utilized. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. The statute of limitations for the 2002 tax year expired on April 30, 2009. The statute of limitations for the 2003 tax year expired on

B-85

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

July 31, 2009. The statute of limitations for the 2004 and 2005 tax years is set to expire in June 2010, unless extended. Tax years 2006 through 2008 are still open for IRS examination. The Company does not anticipate any significant changes within the next 12 months to its total unrecognized tax benefits related to tax years for which the statute of limitations has not expired. See Note 20 for a discussion of the settlement of the Company’s contingent tax liability with Prudential Financial.

As discussed above, the completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the liability for income taxes. As such, 2009 benefited from a reduction to the liability for unrecognized tax benefits and related interest of $272 million, primarily related to tax years prior to 2002 as a result of the expiration of the statute of limitations for the 2002 and 2003 tax years.

The dividends received deduction (“DRD”) reduces the amount of dividend income subject to U.S. tax and is the primary component of the non-taxable investment income shown in the table above, and, as such, is a significant component of the difference between the Company’s effective tax rate and the federal statutory tax rate of 35%. The DRD for the current period was estimated using information from 2008, current year results, and was adjusted to take into account the current year’s equity market performance. The actual current year DRD can vary from the estimate based on factors such as, but not limited to, changes in the amount of dividends received that are eligible for the DRD, changes in the amount of distributions received from mutual fund investments, changes in the account balances of variable life and annuity contracts, and the Company’s taxable income before the DRD.

In August 2007, the IRS released Revenue Ruling 2007-54, which included, among other items, guidance on the methodology to be followed in calculating the DRD related to variable life insurance and annuity contracts. In September 2007, the IRS released Revenue Ruling 2007-61. Revenue Ruling 2007-61 suspended Revenue Ruling 2007-54 and informed taxpayers that the U.S. Treasury Department and the IRS intend to address through new regulations the issues considered in Revenue Ruling 2007-54, including the methodology to be followed in determining the DRD related to variable life insurance and annuity contracts. On February 1, 2010, the Obama Administration released the “General Explanations of the Administration’s Revenue Proposals.” Although the Administration has not released proposed statutory language, one proposal would change the method used to determine the amount of the DRD. A change in the DRD, including the possible retroactive or prospective elimination of this deduction through regulation or legislation, could increase actual tax expense and reduce the Company’s consolidated net income. These activities had no impact on the Company’s 2007, 2008 or 2009 results.

In December 2006, the IRS completed all fieldwork with respect to its examination of the consolidated federal income tax returns for tax years 2002 and 2003. The final report was initially submitted to the Joint Committee on Taxation for their review in April 2007. The final report was resubmitted in March 2008 and again in April 2008. The Joint Committee returned the report to the IRS for additional review of an industry issue regarding the methodology for calculating the DRD related to variable life insurance and annuity contracts. The IRS completed its review of the issue and proposed an adjustment with respect to the calculation of the DRD. In order to expedite receipt of an income tax refund related to the 2002 and 2003 tax years, the Company has agreed to such adjustment. The report, with the adjustment to the DRD, was submitted to the Joint Committee on Taxation in October 2008. The Company was advised on January 2, 2009 that the Joint Committee completed its consideration of the report and has taken no exception to the conclusions reached by the IRS. Accordingly, the final report was processed and a $157 million refund was received in February 2009. The Company believes that its return position with respect to the calculation of the DRD is technically correct. Therefore, the Company filed protective refund claims on October 1, 2009 to recover the taxes associated with the agreed upon adjustment and to pursue such other actions as appropriate. These activities had no impact on the Company’s 2007, 2008 or 2009 results.

In January 2007, the IRS began an examination of tax years 2004 through 2006. For tax years 2007, 2008 and 2009, the Company participated in the IRS’s Compliance Assurance Program (“CAP”). Under CAP, the IRS assigns an examination team to review completed transactions contemporaneously during these tax years in order to reach agreement with the Company on how they should be reported in the tax returns. If disagreements arise, accelerated resolutions programs are available to resolve the

B-86

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

disagreements in a timely manner before the tax returns are filed. It is management’s expectation this program will shorten the time period between the filing of the Company’s federal income tax returns and the IRS’s completion of its examination of the returns.

On March 23, 2010, President Obama signed into law the Patient Protection and Affordable Care Act, which was modified by the Health Care and Education Reconciliation Act of 2010 signed into law on March 30, 2010,  (together, the “Healthcare Act”). The federal government provides a subsidy to companies, including Prudential Financial and its subsidiaries that provide certain retiree prescription drug benefits (the “Medicare Part D subsidy”). The Medicare Part D subsidy was previously provided tax-free. However, as currently adopted, the Healthcare Act includes a provision that would reduce the tax deductibility of retiree health care costs to the extent of any Medicare Part D subsidy received. In effect, this provision of the Healthcare Act makes the Medicare Part D subsidy taxable beginning in 2013. Therefore, the Company has incurred a charge for the reduction of deferred tax assets of approximately $100 million for the quarter ending March 31, 2010, which reduces net income and is reflected in “Income tax expense.”

19.    FAIR VALUE OF ASSETS AND LIABILITIES

Transition Impact – As discussed in Note 2, the Company adopted the authoritative guidance related to fair value measurements and disclosures and the fair value option for financial assets and financial liabilities effective January 1, 2008. The adoption of these standards did not affect the Company’s consolidated financial position or results of operations.

In addition, the guidance related to the fair value option, requires entities to classify cash receipts and cash payments related to items measured at fair value according to their nature and purpose on the Statement of Cash Flows. As a result, cash flows related to trading account assets supporting insurance liabilities and certain other assets are classified as investing rather than operating as of the adoption date of this guidance.

Fair Value Measurement – Fair Value Measurement – Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The authoritative guidance around fair value established a framework for measuring fair value that includes a hierarchy used to classify the inputs used in measuring fair value. The hierarchy prioritizes the inputs to valuation techniques used to measure fair value into three levels. The level in the fair value hierarchy within which the fair value measurement falls is determined based on the lowest level input that is significant to the fair value measurement. The levels of the fair value hierarchy are as follows:

Level 1 - Fair value is based on unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities. These generally provide the most reliable evidence and are used to measure fair value whenever available. Active markets are defined as having the following characteristics for the measured asset/liability:  (i) many transactions, (ii) current prices, (iii) price quotes not varying substantially among market makers, (iv) narrow bid/ask spreads and (v) most information publicly available. The Company’s Level 1 assets and liabilities primarily include certain cash equivalents and short term investments, equity securities and derivative contracts that are traded in an active exchange market. Prices are obtained from readily available sources for market transactions involving identical assets or liabilities.

Level 2 - Fair value is based on significant inputs, other than Level 1 inputs, that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability through corroboration with observable market data. Level 2 inputs include quoted market prices in active markets for similar assets and liabilities, quoted market prices in markets that are not active for identical or similar assets or liabilities and other market observable inputs. The Company’s Level 2 assets and liabilities include:  fixed maturities (corporate public and private bonds, most government securities, certain asset-backed and mortgage-backed securities, etc.), certain equity securities, short-term investments and certain cash equivalents (primarily commercial paper), and certain over-the-counter derivatives. Valuations are generally obtained from third party pricing services for identical or comparable assets or liabilities or through the use of valuation methodologies using observable market

B-87

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

inputs. Prices from services are validated through comparison to trade data and internal estimates of current fair value, generally developed using market observable inputs and economic indicators.

Level 3 - Fair value is based on at least one or more significant unobservable inputs for the asset or liability. These inputs reflect the Company’s assumptions about the assumptions market participants would use in pricing the asset or liability. The Company’s Level 3 assets and liabilities primarily include:  asset-backed securities collateralized by sub-prime mortgages as discussed below, certain private fixed maturities and equity securities, certain manually priced public equity securities and fixed maturities, certain highly structured over-the-counter derivative contracts, and embedded derivatives resulting from certain products with guaranteed benefits.  Prices are determined using valuation methodologies such as option pricing models, discounted cash flow models and other similar techniques. Non-binding broker quotes, which are utilized when pricing service information is not available, are reviewed for reasonableness based on the Company’s understanding of the market, and are generally considered Level 3. Under certain conditions, based on its observations of transactions in active markets, the Company may conclude the prices received from independent third party pricing services or brokers are not reasonable or reflective of market activity. In those instances, the Company may choose to over-ride the third-party pricing information or quotes received and apply internally developed values to the related assets or liabilities. To the extent the internally developed valuations use significant unobservable inputs, they are classified as Level 3. As of December 31, 2009 and 2008 these over-rides on a net basis were not material.

Inactive Markets - During 2009, the Company observed that the volume and level of activity in the market for asset-backed securities collateralized by sub-prime mortgages remained at historically low levels. This stood in particular contrast to the markets for other structured products with similar cash flow and credit profiles, which experienced an increase in the level of activity beginning in the second quarter of 2009. The Company also observed significant implied relative liquidity risk premiums, yields, and weighting of “worst case” cash flows for asset-backed securities collateralized by sub-prime mortgages in comparison with our own estimates for such securities.  In contrast, the liquidity of other spread-based asset classes, such as corporate bonds, high yield and consumer asset-backed securities, such as those collateralized by credit cards or autos, which were previously more correlated with sub-prime securities, improved beginning in the second quarter of 2009. Based on this information, the Company concluded as of June 30, 2009, and continuing through December 31, 2009, that the market for asset-backed securities collateralized by sub-prime mortgages was inactive and also determined the pricing quotes it received were based on limited market transactions, calling into question their representation of observable fair value.

Based on this conclusion, in determining the fair value of certain asset-backed securities collateralized by sub-prime mortgages, the Company considered both third-party pricing information, and an internally developed price, based on a discounted cash flow model. The discount rate used in the model was based on observed spreads for other similarly structured credit markets which were active and dominated by observable orderly transactions. The Company also applied additional risk premiums to the discount rate to reflect the relative illiquidity and asset specific cash flow uncertainty associated with asset-backed securities collateralized by sub-prime mortgages. This combined security specific additional spread reflects the Company’s judgment of what an investor would demand for taking on such risks in an orderly transaction under current market conditions, and is significantly higher than would be indicative of historical spread differences between structured credit asset classes when all asset classes had active markets dominated with orderly transactions. The Company believes these estimated spreads are reflective of current market conditions in the sub-prime mortgage market and these spread estimates are further supported by their relationship to recent observations of limited transactions in sub-prime securities. Using this discount rate, valuations were developed based on the expected future cash flows of the assets. In determining how much weight to place on the third-party pricing information versus our discounted cash flow valuation, the Company considered the level of inactivity and the amount of observable information. The Company weighted third-party pricing information as little as 30% where it had little observable market information, and as much as 100% where more observable information was available. As a result, as of December 31, 2009, the Company reported fair values for these sub-prime securities which were net $591 million higher than the estimated fair values received from independent third party pricing services or brokers. The adjusted fair value of these securities was $5,545 million, which was reflected within Level 3 in the fair value hierarchy as of December 31, 2009, based on the unobservable inputs used in the discounted cash flow model and the limited observable market activity.

B-88

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Assets and Liabilities by Hierarchy Level - The tables below present the balances of assets and liabilities measured at fair value on a recurring basis, as of the dates indicated.

		As of December 31, 2009
		Level 1		Level 2		Level 3 (1)		Netting (2)		Total
		(in millions)
Fixed maturities, available for sale:
U.S. Treasury securities and obligations of U.S. government
	authorities and agencies	$	-	$	6,718	$	-	$	-	$	6,718
Obligations of U.S. states and their political subdivisions			-		1,284		-		-		1,284
Foreign government bonds			-		2,122		42		-		2,164
Corporate securities			5		67,387		752		-		68,144
Asset-backed securities			-		3,058		6,085		-		9,143
Commercial mortgage-backed securities			-		9,953		-		-		9,953
Residential mortgage-backed securities			-		8,719		83		-		8,802
	Sub-total		5		99,241		6,962		-		106,208
Trading account assets supporting insurance liabilities:
U.S. Treasury securities and obligations of U.S. government
	authorities and agencies		-		56		-		-		56
Obligations of U.S. states and their political subdivisions			-		31		-		-		31
Foreign government bonds			-		106		-		-		106
Corporate securities			-		9,335		83		-		9,418
Asset-backed securities			-		576		281		-		857
Commercial mortgage-backed securities			-		1,888		5		-		1,893
Residential mortgage-backed securities			-		1,412		20		-		1,432
Equity securities			-		118		3		-		121
All other activity			337		388		-		-		725
	Sub-total		337		13,910		392		-		14,639
Other trading account assets:
U.S. Treasury securities and obligations of U.S. government
	authorities and agencies		-		71		-		-		71
Obligations of U.S. states and their political subdivisions			-		-		-		-		-
Foreign government bonds			-		-		-		-		-
Corporate securities			-		169		-		-		169
Asset-backed securities			-		141		42		-		183
Commercial mortgage-backed securities			-		52		-		-		52
Equity Securities			213		-		2		-		215
All other activity			13		6,114		290		(4,242)		2,175
	Sub-total		226		6,547		334		(4,242)		2,865
Equity securities, available for sale			3,118		1,614		124		-		4,856
Commercial mortgage and other loans			-		-		(10)		-		(10)

B-89

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Other long-term investments			1		21		-		-		22
Short-term investments			2,877		1,768		-		-		4,645
Cash and cash equivalents			4,364		2,013		-		-		6,377
Other assets			2,387		175		-		-		2,562
Due from parent and affiliates			-		450		3,372		-		3,822
	Sub-total excluding separate account assets		13,315		125,739		11,174		(4,242)		145,986
Separate account assets (3)			59,694		59,892		12,890		-		132,476
	Total assets	$	73,009	$	185,631	$	24,064	$	(4,242)	$	278,462
Future policy benefits			-		-		58		-		58
Long-term debt			-		-		-		-		-
Other liabilities			-		4,683		10		(3,841)		852
Due to parent and affiliates			-		1,122		288		-		1,410
	Total liabilities	$	-	$	5,805	$	356	$	(3,841)	$	2,320

			As of December 31, 2008
			Level 1		Level 2		Level 3		Netting (2)		Total
			(in millions)
Fixed maturities, available for sale			$	-	$	95,333	$	1,923	$	-	$	97,256
Trading account assets supporting insurance liabilities				196		12,376		145		-		12,717
Other trading account assets				20		10,337		1,351		(7,085)		4,623
Equity securities, available for sale				2,404		1,153		73		-		3,630
Other long-term investments				15		199		-		-		214
Short-term investments				1,913		1,177		-		-		3,090
Cash and cash equivalents				2,099		5,344		-		-		7,443
Other assets				1,247		2,500		-		-		3,747
Due from parent and affiliates				-		1,752		833		-		2,585
	Sub-total excluding separate account assets			7,894		130,171		4,325		(7,085)		135,305
Separate account assets (1)				42,391		60,564		19,780		-		122,735
	Total assets		$	50,285	$	190,735	$	24,105	$	(7,085)	$	258,040
Future policy benefits				-		-		1,172		-		1,172
Other liabilities				1		6,509		139		(5,948)		701
Due to parent and affiliates				-		2,696		1,260		-		3,956
		Total liabilities	$	1	$	9,205	$	2,571	$	(5,948)	$	5,829

(1)   Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts. Separate account assets classified as Level 3 consist primarily of real estate and real estate investment funds. Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statement of Financial Position.

(2)   “Netting” amounts represent cash collateral and the impact of offsetting asset and liability positions held with the same counterparty.

The methods and assumptions the Company uses to estimate fair value of assets and liabilities measured at fair value on a recurring basis are summarized as follows:

B-90

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Fixed Maturity Securities - The fair values of the Company’s public fixed maturity securities are generally based on prices obtained from independent pricing services. Prices from pricing services are sourced from multiple vendors, and a vendor hierarchy is maintained by asset type based on historical pricing experience and vendor expertise. The Company generally receives prices from multiple pricing services for each security, but ultimately uses the price from the pricing service highest in the vendor hierarchy based on the respective asset type. In order to validate reasonability, prices are reviewed by internal asset managers through comparison with directly observed recent market trades and internal estimates of current fair value, developed using market observable inputs and economic indicators. Consistent with the fair value hierarchy described above, securities with validated quotes from pricing services are generally reflected within Level 2. If the pricing information received from third party pricing services is not reflective of market activity or other inputs observable in the market, the Company may challenge the price through a formal process with the pricing service.  If the pricing service updates the price to be more consistent in comparison to the presented market observations, the security remains within Level 2.

If the Company ultimately concludes that pricing information received from the independent pricing service is not reflective of market activity, non-binding broker quotes are used, if available. If the Company concludes the values from both pricing services and brokers are not reflective of market activity, it may over-ride the information from the pricing service or broker with an internally developed valuation. As of December 31, 2009 and 2008 over-rides on a net basis were not material. Internally developed valuations or non-binding broker quotes are also used to determine fair value in circumstances where vendor pricing is not available. These estimates may use significant unobservable inputs, which reflect our own assumptions about the inputs market participants would use in pricing the asset. Circumstances where observable market data are not available may include events such as market illiquidity and credit events related to the security. Pricing service over-rides, internally developed valuations and non-binding broker quotes are generally included in Level 3 in our fair value hierarchy.

The fair value of private fixed maturities, which are primarily comprised of investments in private placement securities, originated by internal private asset managers, are primarily determined using a discounted cash flow model. In certain cases these models primarily use observable inputs with a discount rate based upon the average of spread surveys collected from private market intermediaries who are active in both primary and secondary transactions, taking into account, among other factors, the credit quality and industry sector of the issuer and the reduced liquidity associated with private placements. Generally, these securities have been reflected within Level 2. For certain private fixed maturities, the discounted cash flow model may also incorporate significant unobservable inputs, which reflect the Company’s own assumptions about the inputs market participants would use in pricing the asset. Accordingly, these securities have been reflected within Level 3. Significant unobservable inputs used include: issue specific credit adjustments, material non-public financial information, management judgment, estimation of future earnings and cash flows, default rate assumptions, and liquidity assumptions. These inputs are usually considered unobservable, as not all market participants will have access to this data.

Private fixed maturities also include debt investments in funds that, in addition to a stated coupon, pay a return based upon the results of the underlying portfolios. The fair values of these securities are determined by reference to the funds’ net asset value (NAV). Any restrictions on the ability to redeem interests in these funds at NAV are considered to have a de minimis effect on the fair value. Since the NAV at which the funds trade can be observed by redemption and subscription transactions between third parties, the fair values of these investments have been reflected within Level 2 in the fair value hierarchy.

Trading Account Assets -(Including trading account assets supporting insurance liabilities) consist primarily of public corporate bonds, treasuries, equity securities and derivatives whose fair values are determined consistent with similar instruments described above under “Fixed Maturity Securities” and below under “Equity Securities” and “Derivative Instruments.”

Equity Securities - Consist principally of investments in common and preferred stock of publicly traded companies, privately traded securities, as well as common stock mutual fund shares. The fair values of most publicly traded equity securities are based on quoted market prices in active markets for identical assets and are classified within Level 1 in the fair value hierarchy. Estimated fair values for most privately traded equity securities are determined using valuation and discounted cash flow models

B-91

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

that require a substantial level of judgment. In determining the fair value of certain privately traded equity securities the discounted cash flow model may also use unobservable inputs, which reflect the Company’s assumptions about the inputs market participants would use in pricing the asset. Most privately traded equity securities are classified within Level 3. The fair values of common stock mutual fund shares that transact regularly (but do not trade in active markets because they are not publicly available) are based on transaction prices of identical fund shares and are classified within Level 2 in the fair value hierarchy. The fair values of preferred equity securities are based on prices obtained from independent pricing services and, in order to validate reasonability, are compared with directly observed recent market trades. Accordingly, these securities are generally classified within Level 2 in the fair value hierarchy.

Derivative Instruments - Derivatives are recorded at fair value either as assets, within “Other trading account assets,” or “Other long-term investments,” or as liabilities, within “Other liabilities,” except for embedded derivatives which are recorded with the associated host contract. The fair values of derivative contracts are determined based on quoted prices in active exchanges or through the use of valuation models.The fair values of derivative contracts can be affected by changes in interest rates, foreign exchange rates, commodity prices, credit spreads, market volatility, expected returns, non-performance risk and liquidity as well as other factors. Liquidity valuation adjustments are made to reflect the cost of exiting significant risk positions, and consider the bid-ask spread, maturity, complexity, and other specific attributes of the underlying derivative position.  Fair values can also be affected by changes in estimates and assumptions including those related to counterparty behavior used in valuation models.

The Company’s exchange-traded futures and options include treasury futures, eurodollar futures, commodity futures, eurodollar options and commodity options. Exchange-traded futures and options are valued using quoted prices in active markets and are classified within Level 1 in our fair value hierarchy.

The majority of the Company’s derivative positions are traded in the over-the-counter (OTC) derivative market and are classified within Level 2 in the fair value hierarchy. OTC derivatives classified within Level 2 are valued using models generally accepted in the financial services industry that use actively quoted or observable market input values from external market data providers, non-binding broker-dealer quotations, third-party pricing vendors and/or recent trading activity. The fair values of most OTC derivatives, including interest rate and cross currency swaps, currency forward contracts, commodity swaps, commodity forward contracts, single name credit default swaps, loan commitments held for sale and to-be-announced (or TBA) forward contracts on highly rated mortgage-backed securities issued by U.S. government sponsored entities are determined using discounted cash flow models. The fair values of European style option contracts are determined using Black-Scholes option pricing models. These models’ key assumptions include the contractual terms of the respective contract, along with significant observable inputs, including interest rates, currency rates, credit spreads, equity prices, index dividend yields, non-performance risk and volatility.

OTC derivative contracts are executed under master netting agreements with counterparties with a Credit Support Annex, or CSA, which is a bilateral ratings-sensitive agreement that requires collateral postings at established credit threshold levels. These agreements protect the interests of the Company and its counterparties, should either party suffer a credit rating deterioration. The vast majority of the Company’s derivative agreements are with highly rated major international financial institutions. To reflect the market’s perception of its non-performance risk, the Company incorporates an additional spread over London Interbank Offered Rate (“LIBOR”) into the discount rate used in determining the fair value of OTC derivative assets and liabilities, after consideration of the impacts of two-way collateral posting. Most OTC derivative contracts have bid and ask prices that are actively quoted or can be readily obtained from external market data providers. The Company’s policy is to use mid-market pricing in determining its best estimate of fair value.

Level 3 includes OTC derivatives where the bid-ask spreads are generally wider than derivatives classified within Level 2 thus requiring more judgment in estimating the mid-market price of such derivatives. Derivatives classified as Level 3 include first-to-default credit basket swaps, look-back equity options and other structured products. These derivatives are valued based upon models with some significant unobservable market inputs or inputs from less actively traded markets. The fair values of first-

B-92

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

to-default credit basket swaps are derived from relevant observable inputs such as: individual credit default spreads, interest rates, recovery rates and unobservable model-specific input values such as correlation between different credits within the same basket. Look-back equity options and other structured options and derivatives are valued using simulation models such as the Monte Carlo technique. The input values for look-back equity options are derived from observable market indices such as interest rates, dividend yields, equity indices as well as unobservable model-specific input values such as certain volatility parameters. Level 3 methodologies are validated through periodic comparison of the Company’s fair values to broker-dealer values.

Cash Equivalents and Short-Term Investments -Include money market instruments, commercial paper and other highly liquid debt instruments. Money market instruments are generally valued using unadjusted quoted prices in active markets that are accessible for identical assets and are primarily classified as Level 1. The remaining instruments in the Cash Equivalents and Short-term Investments category are typically not traded in active markets; however, their fair values are based on market observable inputs and, accordingly, these investments have been classified within Level 2 in the fair value hierarchy.

Other Assets and Other Liabilities – Other assets carried at fair value include U.S. Treasury bills held within our global commodities group whose fair values are determined consistent with similar securities described above under “Fixed Maturity Securities.” Included in other liabilities are various derivatives contracts executed within our global commodities group, including exchange-traded futures, foreign currency and commodity contracts. The fair values of these derivative instruments are determined consistent with similar derivative instruments described above under “Derivative Instruments.”

Due to\from parent and affiliates - Due to\from parent and affiliates consist primarily of notes receivable, derivative activity and receivables associated with the reinsurance of guarantees on variable annuity contracts whose fair values are determined consistent with similar instruments described above under “Fixed Maturity Securities” and “Derivative Instruments” and “Future Policy Benefits” below.

Future Policy Benefits - The liability for future policy benefits includes general account liabilities for guarantees on variable annuity contracts, including guaranteed minimum accumulation benefits (“GMAB”), guaranteed minimum withdrawal benefits (“GMWB”) and guaranteed minimum income and withdrawal benefits (“GMIWB”), accounted for as embedded derivatives.The fair values of the GMAB, GMWB and GMIWB liabilities are calculated as the present value of future expected benefit payments to customers less the present value of assessed rider fees attributable to the embedded derivative feature.  Since there is no observable active market for the transfer of these obligations, the valuations are calculated using internally developed models with option pricing techniques. The models are based on a risk neutral valuation framework and incorporate premiums for risks inherent in valuation techniques, inputs, and the general uncertainty around the timing and amount of future cash flows. The determination of these risk premiums requires the use of management judgment.

The Company is also required to incorporate its own risk of non-performance in the valuation of the embedded derivatives associated with its optional living benefit features.  Since insurance liabilities are senior to debt, the Company believes that reflecting the claims-paying ratings of the Company’s insurance subsidiaries in the valuation of the liability appropriately takes into consideration the Company’s own risk of non-performance. Historically, the expected cash flows were discounted using forward LIBOR interest rates, which were commonly viewed as being consistent with AA quality claims-paying ratings. However, in light of first quarter of 2009 developments, including rating agency downgrades to the claims-paying ratings of the Company’s insurance subsidiaries, the Company determined that forward LIBOR interest rates were no longer indicative of a market participant’s view of the Company’s claims-paying ability. As a result, beginning in the first quarter of 2009, to reflect the market’s perception of its non-performance risk, the Company incorporated an additional spread over LIBOR into the discount rate used in the valuations of the embedded derivatives associated with its optional living benefit features, thereby increasing the discount rate and reducing the fair value of the embedded derivative liabilities. The additional spread over LIBOR is determined taking into consideration publicly available information relating to the claims-paying ability of the Company’s insurance subsidiaries, as indicated by the credit spreads associated with funding agreements issued by these subsidiaries. The Company adjusts these credit spreads to remove any liquidity risk premium. The additional spread over LIBOR incorporated into the

B-93

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

discount rate as of December 31, 2009 generally ranged from 75 to 150 basis points for the portion of the interest rate curve most relevant to these liabilities.

Other significant inputs to the valuation models for the embedded derivatives associated with the optional living benefit features of the Company’s variable annuity products include capital market assumptions, such as interest rate and implied volatility assumptions, as well as various policyholder behavior assumptions that are actuarially determined, including lapse rates, benefit utilization rates, mortality rates and withdrawal rates. These assumptions are reviewed at least annually, and updated based upon historical experience and give consideration to any observable market data, including market transactions such as acquisitions and reinsurance transactions. Since many of the assumptions utilized in the valuation of the embedded derivatives associated with the Company’s optional living benefit features are unobservable and are considered to be significant inputs to the liability valuation, the liability included in future policy benefits has been reflected within Level 3 in the fair value hierarchy.

The following tables provide a summary of the changes in fair value of Level 3 assets and liabilities for the year ended December 31, 2009, as well as the portion of gains or losses included in income for the year ended December 31, 2009 attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2009.

				Year Ended December 31, 2009
				Fixed Maturities Available For Sale - Foreign Government Bonds		Fixed Maturities Available For Sale - Corporate Securities		Fixed Maturities Available For Sale - Asset- Backed Securities		Fixed Maturities Available For Sale - Residential Mortgage- Backed Securities		Trading Account Asset Supporting Insurance Liabilities- Foreign Government Bonds
				(in millions)
Fair Value, beginning of period				$	27	$	833	$	855	$	208	$	-
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		(96)		(661)		-		-
			Asset management fees and other income		-		-		-		-		-
		Included in other comprehensive income (loss)			5		112		2,257		(1)		-
	Net investment income				-		11		57		1		-
	Purchases, sales, issuances and settlements				123		(579)		(1,582)		18		12
	Other(1)				-		-		-		-		-
	Transfers into Level 3(2)				10		872		5,228		-		-
	Transfers out of Level 3(2)				(123)		(401)		(69)		(143)		(12)
Fair Value, end of period				$	42	$	752	$	6,085	$	83	$	-
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held at the end
	of the period(3):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	(100)	$	(658)	$	-	$	-
			Asset management fees and other income	$	-	$	-	$	-	$	-	$	-
		Included in other comprehensive income (loss)		$	5	$	103	$	2,202	$	(1)	$	-

B-94

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

				Year Ended December 31, 2009
				Trading Account Asset Supporting Insurance Liabilities- Corporate Securities		Trading Account Asset Supporting Insurance Liabilities- Asset- Backed Securities		Trading Account Asset Supporting Insurance Liabilities- Commercial Mortgage- Backed Securities		Trading Account Asset Supporting Insurance Liabilities- Residential Mortgage- Backed Securities		Trading Account Asset Supporting Insurance Liabilities- Equity Securities
				(in millions)
Fair Value, beginning of period				$	75	$	35	$	6	$	28	$	1
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		-		-		-
			Asset management fees and other income		20		59		(1)		3		2
		Included in other comprehensive income (loss)			-		-		-		-		-
	Net investment income				2		-		-		-		-
	Purchases, sales, issuances and settlements				(72)		(66)		-		(4)		-
	Other(1)				-		-		-		-		-
	Transfers into Level 3(2)				229		266		-		-		-
	Transfers out of Level 3(2)				(171)		(13)		-		(7)		-
Fair Value, end of period				$	83	$	281	$	5	$	20	$	3
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held at the end
	of the period(3):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	-	$	-	$	-
			Asset management fees and other income	$	16	$	47	$	(1)	$	3	$	2
		Included in other comprehensive income (loss)		$	-	$	-	$	-	$	-	$	-

B-95

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

				Year Ended December 31, 2009
				Other Trading Account Assets- Corporate Securities		Other Trading Account Assets- Asset- Backed Securities		Other Trading Account Assets- Equity Securities		Other Trading Account Assets- All Other Activity		Equity Securities, Available for Sale
				(in millions)
Fair Value, beginning of period				$	38	$	-	$	7	$	1,306	$	73
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		-		-		-		(320)		(10)
			Asset management fees and other income		-		3		3		24		-
		Included in other comprehensive income (loss)			-		-		-		-		51
	Net investment income				-		-		-		-		-
	Purchases, sales, issuances and settlements				(2)		3		(7)		(720)		13
	Other(1)				(36)		36		-		-		-
	Transfers into Level 3(2)				-		-		-		-		12
	Transfers out of Level 3(2)				-		-		(1)		-		(15)
Fair Value, end of period				$	-	$	42	$	2	$	290	$	124
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held at the end
	of the period(3):
		Included in earnings:
			Realized investment gains (losses), net	$	-	$	-	$	-	$	(320)	$	(21)
			Asset management fees and other income	$	2	$	1	$	3	$	-	$	-
		Included in other comprehensive income (loss)		$	-	$	-	$	-	$	-	$	51

B-96

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

				Year Ended December 31, 2009
				Commercial Mortgage and Other Loans		Due from parent and affiliates		Separate Account Assets(4)
				(in millions)
Fair Value, beginning of period				$	-	$	833	$	19,780
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		(10)		(872)		-
			Asset management fees and other income		-		-		-
			Interest credited to policyholders' account balances		-		-		(7,373)
		Included in other comprehensive income (loss)			-		58		-
	Net investment income				-		-		-
	Purchases, sales, issuances and settlements				-		1,669		426
	Other(1)				-		-		-
	Transfers into Level 3(2)				-		1,684		409
	Transfers out of Level 3(2)				-		-		(352)
Fair Value, end of period				$	(10)	$	3,372	$	12,890
Unrealized gains (losses) for the period relating to
	those Level 3 assets that were still held at the end
	of the period(3):
		Included in earnings:
			Realized investment gains (losses), net	$	(10)	$	(846)	$	-
			Asset management fees and other income	$	-	$	-	$	-
			Interest credited to policyholders' account balances	$	-	$	-	$	(7,585)
		Included in other comprehensive income (loss)		$	-	$	-	$	-

B-97

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

				Year Ended December 31, 2009
				Future Policy Benefits		Other Liabilities		Due to parent and affiliates
				(in millions)
Fair Value, beginning of period				$	(1,172)	$	(139)	$	(1,260)
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		1,159		82		272
			Asset management fees and other income		-		-		9
		Included in other comprehensive income (loss)			-		-		-
	Net investment income				-		-		-
	Purchases, sales, issuances and settlements				(45)		49		691
	Other(1)				-		-		-
	Transfers into Level 3(2)				-		(2)		-
	Transfers out of Level 3(2)				-		-		-
Fair Value, end of period				$	(58)	$	(10)	$	(288)
Unrealized gains (losses) for the period relating to
	those Level 3 assets and liabilities that were still held
	at the end of the period(3):
		Included in earnings:
			Realized investment gains (losses), net	$	1,079	$	82	$	272
			Asset management fees and other income	$	-	$	-	$	-
		Included in other comprehensive income (loss)		$	-	$	-	$	-

__________

(1)   Other represents reclassifications of certain assets between reporting categories.

(2)   Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.

(3)   Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(4)   Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts.  Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statement of Financial Position.

Transfers –Transfers into Level 3 for Fixed Maturities Available for Sale - Asset-Backed Securities and Trading Account Assets Supporting Insurance Liabilities – Asset-Backed Securities include $4,583 million and $188 million, respectively, of transfers that occurred during the second quarter of 2009, resulting from the Company’s conclusion that the market for asset-backed securities collateralized by sub-prime mortgages was an inactive market, as discussed in detail above. In addition to these sub-prime securities, transfers into Level 3 for Fixed Maturities Available for Sale – Corporate Securities and – Asset-Backed Securities, and Trading Account Assets Supporting Insurance Liabilities – Corporate Securities and – Asset-Backed Securities, as well as Due from Parent and Affiliates included transfers resulting from the use of unobservable inputs within valuation methodologies and the use of broker quotes (that could not be validated) when previously, information from third party pricing services (that could be validated) or models with observable inputs were utilized.

Transfers out of level 3 for Fixed Maturities Available for Sale –Foreign Government Bonds, – Corporate Securities and – Residential Mortgage-Backed Securities as well as Trading Account Assets Supporting Insurance Liabilities – Corporate Securities

B-98

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

were primarily due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company was able to validate.

The following tables provide a summary of the changes in fair value of Level 3 assets and liabilities for the year ended December 31, 2008, as well as the portion of gains or losses included in income for the year ended December 31, 2008 attributable to unrealized gains or losses related to those assets and liabilities still held at December 31, 2008.

				Year Ended December 31, 2008
				Fixed Maturities Available For Sale		Trading Account Assets Supporting Insurance Liabilities		Other Trading Account Assets		Equity Securities Available for Sale
				(in millions)
Fair Value, beginning of period				$	2,787	$	291	$	469	$	164
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		(347)		-		628		(5)
			Asset management fees and other income		-		(39)		(5)		-
		Included in other comprehensive income (loss)			(346)		-		-		(24)
	Net investment income				11		(1)		-		-
	Purchases, sales, issuances and settlements				(305)		(32)		259		(12)
	Transfers into (out of) Level 3(1)				123		(74)		-		(50)
Fair Value, end of period				$	1,923	$	145	$	1,351	$	73
Unrealized gains (losses) for the period relating to those Level 3 assets
	that were still held at the end of the period(2)
		Included in earnings:
			Realized investment gains (losses), net	$	(363)	$	-	$	628	$	(5)
			Asset management fees and other income	$	-	$	(46)	$	(5)	$	-
		Included in other comprehensive income (loss)		$	(327)	$	-	$	-	$	(21)

B-99

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

				Year Ended December 31, 2008
				Due from Parent and Affiliates		Separate Account Assets(3)		Future Policy Benefits		Other Liabilities
				(in millions)
Fair Value, beginning of period				$	35	$	21,815	$	(71)	$	(77)
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		777		-		(1,079)		(101)
			Asset management fees and other income		-		-		-		-
			Interest credited to policyholders' account balances		-		(2,983)		-		-
		Included in other comprehensive income (loss)			-		-		-		-
	Net investment income				-		-		-		-
	Purchases, sales, issuances and settlements				21		1,555		(22)		39
	Transfers into (out of) Level 3(1)				-		(607)		-		-
Fair Value, end of period				$	833	$	19,780	$	(1,172)	$	(139)
Unrealized gains (losses) for the period relating to those Level 3 assets
	that were still held at the end of the period(2)
		Included in earnings:
			Realized investment gains (losses), net	$	777	$	-	$	(1,079)	$	(101)
			Asset management fees and other income	$	-	$	-	$	-	$	-
			Interest credited to policyholders' account balances	$	-	$	(3,733)	$	-	$	-

B-100

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

				Year Ended December 31, 2008
				Due to Parent and Affiliates
				(in millions)
Fair Value, beginning of period				$	(395)
	Total gains or (losses) (realized/unrealized):
		Included in earnings:
			Realized investment gains (losses), net		(650)
			Asset management fees and other income		-
		Included in other comprehensive income (loss)			-
	Net investment income				-
	Purchases, sales, issuances and settlements				(215)
	Transfers into (out of) Level 3(2)				-
Fair Value, end of period				$	(1,260)
Unrealized gains (losses) for the period relating to those Level 3 liabilities that were
	still held at the end of the period(2)
		Included in earnings:
			Realized investment gains (losses), net	$	(650)
			Asset management fees and other income	$	-
			Interest credited to policyholders' account balances	$	-

____________

(1)   Transfers into or out of Level 3 are generally reported as the value as of the beginning of the quarter in which the transfer occurs.

(2)   Unrealized gains or losses related to assets still held at the end of the period do not include amortization or accretion of premiums and discounts.

(3)   Separate account assets represent segregated funds that are invested for certain customers. Investment risks associated with market value changes are borne by the customers, except to the extent of minimum guarantees made by the Company with respect to certain accounts.  Separate account liabilities are not included in the above table as they are reported at contract value and not fair value in the Company’s Consolidated Statement of Financial Position.

Transfers – Net transfers into Level 3 for Fixed Maturities Available for Sale totaled $123 million during the year ended December 31, 2008. Transfers into Level 3 for these investments was primarily the result of unobservable inputs utilized within valuation methodologies and the use of broker quotes when previously information from third party pricing services was utilized. Partially offsetting these transfers into Level 3 were transfers out of Level 3 due to the use of observable inputs in valuation methodologies as well as the utilization of pricing service information for certain assets that the Company was able to validate.

The net amount of transfers out of level 3 for Trading Account Assets Supporting Insurance Liabilities of $74 million during the year ended December 31, 2008 is due primarily to the use of observable inputs in valuation methodologies as well as pricing service information for certain assets that the Company was able to validate. Partially offsetting these transfers out of Level 3 were transfers into Level 3 due to the use of unobservable inputs within the valuation methodologies and broker quotes, when previously information from third party pricing services was utilized.

The net amount of Separate Account Assets transferred out of Level 3 for the year ended December 31, 2008 was $607 million. This resulted from the use of vendor pricing information that the Company was able to validate that was previously

B-101

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

unavailable. Partially offsetting the transfers out for this activity were transfers into Level 3 as a result of further review of valuation methodologies for certain assets that had been previously classified as Level 2.

Nonrecurring Fair Value Measurements - Certain assets and liabilities are measured at fair value on a nonrecurring basis. Nonrecurring fair value reserve increases resulted in $109 million of losses being recorded for the year ended December 31, 2009 on certain commercial mortgage loans. The carrying value of these loans as of December 31, 2009 was $147 million. Similar commercial mortgage loan reserve increases of $6 million were recorded for the year ended December 31, 2008. The reserves were based on either discounted cash flows utilizing market rates or the fair value of the underlying real estate collateral and were classified as Level 3 in the hierarchy.

Impairments of $51 million and $27 million were recorded for the years ended December 31, 2009 and 2008, respectively, on certain cost method investments. The carrying value as of December 31, 2009 of these investments was $206 million. In addition, impairments of $11 million were recorded for the year ended December 31, 2009 on certain equity method investments. These fair value adjustments were based on inputs classified as Level 3 in the valuation hierarchy. The inputs utilized were primarily discounted estimated future cash flows and, where appropriate, valuations provided by the general partners taken into consideration with deal and management fee expenses.

Fair Value of Financial Instruments

The Company is required by U.S. GAAP to disclose the fair value of certain financial instruments including those that are not carried at fair value. For the following financial instruments the carrying amount equals or approximates fair value: fixed maturities classified as available for sale, trading account assets supporting insurance liabilities, other trading account assets, equity securities, securities purchased under agreements to resell, short-term investments, cash and cash equivalents, accrued investment income, separate account assets, investment contracts included in separate account liabilities, securities sold under agreements to repurchase, and cash collateral for loaned securities, as well as certain items recorded within other assets and other liabilities such as broker-dealer related receivables and payables. See Note 21 for a discussion of derivative instruments.

The following table discloses the Company’s financial instruments where the carrying amounts and fair values may differ:

		December 31, 2009				December 31, 2008
		Carrying Amount		Fair Value		Carrying Amount		Fair Value
		(in millions)
Assets:
	Commercial mortgage and other loans	$	26,289	$	25,649	$	27,717	$	25,345
	Policy loans		7,907		9,358		7,779		10,533
	Wachovia Securities "lookback" option		-		-		580		2,280
	Notes receivable - affiliated		4,791		4,793		3,752		3,724
Liabilities:
	Policyholders' account balances - investment contracts	$	58,162	$	58,921	$	58,143	$	57,708
	Short-term and long-term debt		9,860		9,787		14,342		12,919

The fair values presented above for those financial instruments where the carrying amounts and fair values may differ have been determined by using available market information and by applying market valuation methodologies, as described in more detail below.

B-102

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Commercial Mortgage and Other Loans

The fair value of commercial mortgage and other loans is primarily based upon the present value of the expected future cash flows discounted at the appropriate U.S. Treasury rate, adjusted for the current market spread for similar quality loans.

Policy Loans

The fair value of U.S. insurance policy loans is calculated using a discounted cash flow model based upon current U.S. Treasury rates and historical loan repayment patterns. For group corporate- and trust-owned life insurance contracts and group universal life contracts, the fair value of the policy loans is the amount due as of the reporting date.

Wachovia Securities “lookback” option

On December 31, 2009, the Company exercised its rights under the “lookback” option as it relates to its interest in the Wachovia Securities joint venture. Prior to its exercise, the fair value of the “lookback” option was determined internally by using an approach that employs both Black-Scholes and binominal option pricing models, which includes inputs such as equity market volatilities, risk-free rates, dividend yields and counterparty credit risk, as well as an illiquidity discount. At December 31, 2008, the carrying value of the “lookback” option was reflected within “Other assets.”  See Note 7 for additional information on the Company’s Investment in Wachovia Securities.

Notes Receivable – Affiliated

The fair value of affiliated notes receivable is determined using a discounted cash flow model, which utilizes a discount rate based upon market indications from broker-dealers, as well as internal assumptions and takes into account, among other factors, the credit quality of the issuer and the reduced liquidity associated with private placements, where appropriate. Affiliated notes receivable are reflected within “Due from parent and affiliates.”

Investment Contracts – Policyholders’ Account Balances

Only the portion of policyholders’ account balances related to products that are investment contracts (those without significant mortality or morbidity risk) are reflected in the table above. For fixed deferred annuities, single premium endowments, payout annuities and other similar contracts without life contingencies, fair values are derived using discounted projected cash flows based on interest rates that are representative of the Company’s claims paying ratings, and hence reflects the Company’s own nonperformance risk. For guaranteed investment contracts, funding agreements, structured settlements without life contingencies and other similar products, fair values are derived using discounted projected cash flows based on interest rates being offered for similar contracts with maturities consistent with those of the contracts being valued. For those balances that can be withdrawn by the customer at any time without prior notice or penalty, the fair value is the amount estimated to be payable to the customer as of the reporting date, which is generally the carrying value. For defined contribution and defined benefit contracts and certain other products the fair value is the market value of the assets supporting the liabilities.

Debt

The fair value of short-term and long-term debt is generally determined by either prices obtained from independent pricing services, which are validated by the Company, or discounted cash flow models. These fair values consider the Company's own nonperformance risk. Discounted cash flow models predominately use market observable inputs such as the borrowing rates currently available to the Company for debt and financial instruments with similar terms and remaining maturities. For commercial paper issuances and other debt with a maturity of less than 90 days, the carrying value approximates fair value.

B-103

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

20.    RELATED PARTY

Service Agreements – Services Provided

The Company has service agreements with Prudential Financial and certain of its subsidiaries. These companies, along with their subsidiaries, include PRUCO, LLC, Prudential Asset Management Holding Company, LLC, Prudential International Insurance Holdings, Ltd., Prudential International Insurance Service Company, LLC, Prudential IBH Holdco, Inc., Prudential Real Estate and Relocation Services, Inc., Prudential International Investments Corporation, Prudential International Investments, LLC, Prudential Annuities Holding Company, Inc. and Prudential Japan Holdings, LLC.  Under these agreements, the Company provides general and administrative services and, accordingly, charges these companies for such services. These charges totaled $499 million, $408 million and $444 million for the years ended December 31, 2009, 2008 and 2007, respectively, and are recorded as a reduction to the Company’s “General and administrative expenses.”

The Company also engages in other transactions with affiliates in the normal course of business. Affiliated revenues in “Other income” were $1 million, $18 million and $63 million for the years ended December 31, 2009, 2008 and 2007, respectively, related primarily to royalties and compensation for the sale of affiliates’ products through the Company’s distribution network.

“Due from parent and affiliates” includes $85 million and $119 million at December 31, 2009 and 2008, respectively, due primarily to these agreements.

Service Agreements – Services Received

Prudential Financial and certain of its subsidiaries have service agreements with the Company.  Under the agreements, the Company primarily receives the services of the officers and employees of Prudential Financial, asset management services from Prudential Asset Management Holding Company and subsidiaries and consulting services from Pramerica Systems Ireland Limited. The Company is charged based on the level of service received. Affiliated expenses for services received were $248 million, $272 million and $250 million in “Net investment income” and $155 million, $129 million and $108 million in “General and administrative expenses” for the years ended December 31, 2009, 2008 and 2007, respectively. “Due to parent and affiliates” includes $20 million and $26 million at December 31, 2009 and 2008, respectively, due primarily to these agreements.

Notes Receivable and Other Lending Activities

Affiliated notes receivable included in “Due from parent and affiliates” at December 31, are as follows:

			Maturity
			Dates	Rate	2009		2008
					(in millions)
U.S. Dollar floating rate notes(1)			2009 - 2026	0.79% - 11.63%	$	1,018	$	1,216
U.S. Dollar fixed rate notes(2)			2009 - 2026	1.72% - 12.40%		2,977		777
Japanese Yen fixed rate notes(3)			2009 - 2019	1.70% - 3.40%		252		160
	Total long-term notes receivable - affiliated(4)					4,247		2,153
Short-term notes receivable - affiliated(5)						544		1,599
		Total notes receivable - affiliated			$	4,791	$	3,752

B-104

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

¯¯¯¯¯¯¯¯¯¯¯¯¯

(1)   Includes current portion of the long-term notes receivable of $660 million and $75 million at December 31, 2009 and 2008, respectively.

(2)   Includes current portion of the long-term notes receivable of $539 million and $404 million at December 31, 2009 and 2008, respectively.

(3)   Includes current portion of the long-term notes receivable of $59 million at December 31, 2008.

(4)   All long-term notes receivable may be called for prepayment prior to the respective maturity dates under specified circumstances.

(5)   Short-term notes receivable have variable rates, which averaged 1.32% at December 31, 2009 and 3.62% at December 31, 2008.  Short-term notes receivable are payable on demand.

Accrued interest receivable related to these loans was $30 million and $12 million at December 31, 2009 and 2008, respectively, and is included in “Due from parent and affiliates.” Revenues related to these loans were $207 million, $97 million and $142 million for the years ended December 31, 2009, 2008, and 2007, respectively and are included in “Other income.”

The Company also engages in overnight borrowing and lending of funds with Prudential Financial and affiliates. “Cash and cash equivalents” included $70 million and $55 million, associated with these transactions at December 31, 2009 and 2008, respectively. Revenues related to this lending activity were $0 million, $3 million and $14 million for the years ended December 31, 2009, 2008, and 2007, respectively, and are included in “Net investment income.”

Sales of Fixed Maturities and Commercial Mortgage & Agricultural Mortgage Loans between Affiliates

In December 2009, the Company sold fixed maturity investments to an affiliate for a total of $1,871 million, the fair value on the date of transfer plus accrued interest.  In consideration for this sale, the Company received notes receivable from affiliates with a fair value of $1,890 million and $24 million for the accrued interest of which $23 million was unpaid as of December 31, 2009.  The affiliate recorded the investments at the historic amortized cost of the Company.  The difference of $43 million between the carrying amount and the fair value, net of taxes, was recorded by the Company as a decrease to additional paid-in capital.  Fixed maturity investments are categorized in the Company’s consolidated statement of financial position as available-for-sale debt securities, and are therefore carried at fair value, with the difference between amortized cost and fair value reflected in accumulated other comprehensive income.

In September 2009, the Company purchased fixed maturity investments from affiliates for a total of $294 million, the fair value on the date of the transfer plus accrued interest. The Company recorded the investments at the historic amortized cost of the affiliate and no adjustment was necessary to additional paid-in capital as the fair value and carrying amounts were equal.

In June 2009, the Company sold fixed maturity investments to an affiliate for a total of $682 million, the fair value on the date of the transfer plus accrued interest. The affiliate recorded the investments at the historic amortized cost of the Company. The difference of $19 million between the historic amortized cost and the fair value, net of taxes, was recorded by the Company as an increase to additional paid-in capital.

In July 2009, the Company sold commercial mortgage and agricultural mortgage loans to an affiliate for a total of $27 million, the fair value on the date of the transfer plus accrued interest and premiums, less escrows. The affiliate recorded the investments at the Company’s carrying amount. No adjustment was necessary to additional paid-in capital as the fair value and carrying amounts were equal. Commercial mortgage loans are categorized in the Company’s consolidated statement of financial position as commercial mortgage and other loans.

In April, June and December 2008, the Company purchased fixed maturity investments from affiliates for a total of $374 million, the fair value on the date of the transfer plus accrued interest. The Company recorded the investments at the historic amortized cost of the affiliate. The difference of $147 million between the historic amortized cost and the fair value, net of taxes, was recorded as an increase to additional paid-in capital.

B-105

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

In February, March and April 2008, the Company purchased commercial mortgage loans from an affiliate for a total of $180 million, the fair value on the date of the transfer plus accrued interest, less escrows. The Company recorded the investments at the affiliate’s carrying amount, and no adjustment was necessary to additional paid-in capital as the fair value and carrying amount were equal.

In December 2008, the Company sold fixed maturity investments to an affiliate for a total of $822 million, the fair value on the date of the transfer plus accrued interest, less escrows. The affiliate recorded the investments at the historic amortized cost of the Company. The difference of $51 million between the historic amortized cost and the fair value, net of taxes, was recorded by the Company as a reduction to additional paid-in capital.  In June 2009, the Company bought back certain loans that did not meet the affiliate’s criteria for a total of $62 million, the fair value on the date of the original transfer plus accrued interest, less escrows. The Company recorded the investments at the carrying amount as of the date of the original transfer.  The difference of $5 million between the carrying amount and the fair value, net of taxes, was recorded by the Company as an increase to additional paid-in capital.

In December 2008, the Company sold commercial mortgage and agricultural mortgage loans to an affiliate for a total of $311 million, the fair value on the date of the transfer plus accrued interest, less escrows. The affiliate recorded the investments at the Company’s carrying amount. The difference of $15 million between the carrying amount and the fair value, net of taxes, was recorded by the Company as a reduction to additional paid-in capital.

Transfer of Loans between Affiliates

In October 2009, the Company received a ¥9 billion affiliated loan from Prudential Financial.  The Company recorded the loan at a fair value of $105 million, net of taxes, which also represented the affiliate’s carrying value.  The offset was recorded by the Company as a capital contribution.

Settlement of Contingent Tax Liability between Affiliates

During 2009, in accordance with the terms of the tax sharing agreement with its parent, the Company settled $310 million of its contingent tax liability with Prudential Financial and was relieved of any future obligation related thereto. The liability is primarily related to tax years prior to 2002. The settlement of this liability was recorded as a capital contribution.

Transfer of Duration Lengthening Swaps between Affiliates

In November 2008, the Company received duration lengthening swaps from a direct subsidiary of Prudential Financial.  The Company recorded these items at a fair value of $211 million, net of taxes, which also represented the affiliate’s carrying value.  The offset was recorded as a capital contribution.  These swaps were terminated in December 2008.

Derivatives

Prudential Global Funding, Inc., an indirect, wholly owned consolidated subsidiary of the Company enters into derivative contracts with Prudential Financial and certain of its subsidiaries. Affiliated derivative assets included in “Other trading account assets” were $1,410 million and $1,097 million at December 31, 2009 and 2008, respectively. Affiliated derivative liabilities included in “Due to parent and affiliates” were $1,407 million and $3,957 million at December 31, 2009 and 2008, respectively.

Retail Medium Term Notes Program

The Company has sold funding agreements (“agreements”) to Prudential Financial as part of a retail note issuance program to financial wholesalers. As discussed in Note 10, “Policyholders’ account balances” include $1,814 million and $3,496 million

B-106

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

related to these agreements at December 31, 2009 and 2008, respectively. In March and June 2009, the Company settled $1,522 million of its obligation related to the affiliated funding agreements mentioned above for $1,221 million, which resulted in an increase in “Additional paid-in capital” of $278 million. In addition, “Deferred policy acquisition costs” includes affiliated amounts of $23 million and $58 million related to these agreements at December 31, 2009 and 2008, respectively. The affiliated interest credited on these agreements is included in “Interest credited to policyholders’ account balances” and was $121 million, $192 million and $126 million for the years ended December 31, 2009, 2008, and 2007, respectively.

Joint Ventures

The Company has made investments in joint ventures with certain subsidiaries of Prudential Financial. “Other long term investments” includes $83 million and $27 million at December 31, 2009 and 2008, respectively. “Net investment income” includes gains of $22 million for the year ended December 31, 2009, losses of $3 million for the year ended 2008 and a gain of $21 million for the year ended December 31, 2007, related to these ventures.

Reinsurance

As discussed in Notes 11 and 13, the Company participates in reinsurance transactions with certain subsidiaries of Prudential Financial.

Short-term and Long-term Debt

As discussed in Note 14, the Company participates in debt transactions with certain subsidiaries of Prudential Financial.

21.    DERIVATIVE INSTRUMENTS

Types of Derivative Instruments and Derivative Strategies used in a non- dealer or broker capacity

 Interest rate swaps are used by the Company to manage interest rate exposures arising from mismatches between assets and liabilities (including duration mismatches) and to hedge against changes in the value of assets it anticipates acquiring and other anticipated transactions and commitments. Swaps may be attributed to specific assets or liabilities or may be used on a portfolio basis. Under interest rate swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between fixed rate and floating rate interest amounts calculated by reference to an agreed upon notional principal amount. Generally, no cash is exchanged at the outset of the contract and no principal payments are made by either party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty at each due date.

Exchange-traded futures and options are used by the Company to reduce risks from changes in interest rates, to alter mismatches between the duration of assets in a portfolio and the duration of liabilities supported by those assets, and to hedge against changes in the value of securities it owns or anticipates acquiring or selling. In exchange-traded futures transactions, the Company agrees to purchase or sell a specified number of contracts, the values of which are determined by the values of underlying referenced investments, and to post variation margin on a daily basis in an amount equal to the difference in the daily market values of those contracts. The Company enters into exchange-traded futures and options with regulated futures commission’s merchants who are members of a trading exchange.

Currency derivatives, including exchange-traded currency futures and options, currency forwards and currency swaps, are used by the Company to reduce risks from changes in currency exchange rates with respect to investments denominated in foreign currencies that the Company either holds or intends to acquire or sell. The Company also uses currency forwards to hedge the currency risk associated with net investments in foreign operations.

B-107

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Under currency forwards, the Company agrees with other parties to deliver a specified amount of an identified currency at a specified future date. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at the specified future date.

Under currency swaps, the Company agrees with other parties to exchange, at specified intervals, the difference between one currency and another at an exchange rate and calculated by reference to an agreed principal amount. Generally, the principal amount of each currency is exchanged at the beginning and termination of the currency swap by each party. These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one counterparty for payments made in the same currency at each due date.

Credit derivatives are used by the Company to enhance the return on the Company’s investment portfolio by creating credit exposure similar to an investment in public fixed maturity cash instruments. With credit derivatives the Company sells credit protection on an identified name, or a basket of names in a first to default structure, and in return receives a quarterly premium. With single name credit default derivatives, this premium or credit spread generally corresponds to the difference between the yield on the referenced name’s public fixed maturity cash instruments and swap rates, at the time the agreement is executed. With first to default baskets, the premium generally corresponds to a high proportion of the sum of the credit spreads of the names in the basket. If there is an event of default by the referenced name or one of the referenced names in a basket, as defined by the agreement, then the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the referenced defaulted security or similar security. See Note 22 for a discussion of guarantees related to these credit derivatives. In addition to selling credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio.

The Company uses “to be announced” (“TBA”) forward contracts to gain exposure to the investment risk and return of mortgage-backed securities. TBA transactions can help the Company to achieve better diversification and to enhance the return on its investment portfolio. TBAs provide a more liquid and cost effective method of achieving these goals than purchasing or selling individual mortgage-backed pools. Typically, the price is agreed upon at the time of the contract and payment for such a contract is made at a specified future date.

The Company sells variable annuity products, which contain embedded derivatives. These embedded derivatives are marked to market through “Realized investment gains (losses), net” based on the change in value of the underlying contractual guarantees, which are determined using valuation models. The Company maintains a portfolio of derivative instruments that is intended to economically hedge the risks related to the above products’ features. The derivatives may include, but are not limited to equity options, total return swaps, interest rate swap options, caps, floors, and other instruments. In addition, some variable annuity products feature an automatic rebalancing element to minimize risks inherent in the Company’s guarantees which reduces the need for hedges.

The Company sells synthetic guaranteed investment contracts which are investment-only, fee-based stable value products, to qualified pension plans. The assets are owned by the trustees of such plans, who invest the assets under the terms of investment guidelines agreed to with the Company. The contracts contain a guarantee of a minimum rate of return on participant balances supported by the underlying assets, and a guarantee of liquidity to meet certain participant-initiated plan cash flow requirements. These contracts are accounted for as derivatives and recorded at fair value.

The Company invests in fixed maturities that, in addition to a stated coupon, provide a return based upon the results of an underlying portfolio of fixed income investments and related investment activity. The Company accounts for these investments as available for sale fixed maturities containing embedded derivatives. Such embedded derivatives are marked to market through “Realized investment gains (losses), net,” based upon the change in value of the underlying portfolio.

B-108

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

The table below provides a summary of the gross notional amount and fair value of derivatives contracts, excluding embedded derivatives which are recorded with the associated host, by the primary underlying. Many derivative instruments contain multiple underlyings.

	December 31, 2009			December 31, 2008
	Notional Amount	Fair Value		Notional Amount	Fair Value
		Assets	Liabilities		Assets	Liabilities
			(in millions)
Qualifying Hedge Relationships
Interest Rate	$            6,831	$         93	$       (355)	$            5,888	$118	$(809)
Currency	34	-	-	27	-	-
Currency/Interest Rate	1,207	9	(245)	1,132	56	(139)
Total Qualifying Hedge Relationships	$     8,072	$         102	$       (600)	$      7,047	$   174	$   (948)
Non-qualifying Hedge Relationships
Interest Rate	$    64,020	$  1,835	$     (1,179)	$   59,939	$  3,545	$   (2,513)
Currency	3,176	57	(2)	2,039	11	(65)
Credit	1,818	236	(68)	1,527	202	(115)
Currency/Interest Rate	2,379	119	(181)	1,928	181	(83)
Equity	1,121	56	(36)	2,346	302	-
Total Non-qualifying Hedge Relationships	$    72,514	$ 2,303	$   (1,466)	$  67,779	$  4,241	$   (2,776)
Total Derivatives(1)	$   80,586	$ 2,405	$   (2,066)	$  74,826	$  4,415	$   (3,724)

_________________

(1) Excludes embedded derivatives which contain multiple underlyings. The fair value of these embedded derivatives was a liability of $306 million as of December 31, 2009 and a liability of $478 million as of December 31, 2008, included in “Future policy benefits” and “Fixed maturities, available for sale.”

Cash Flow, Fair Value and Net Investment Hedges

The primary derivative instruments used by the Company in its fair value, cash flow, and net investment hedge accounting relationships are interest rate swaps, currency swaps and currency forwards. These instruments are only designated for hedge accounting in instances where the appropriate criteria are met. The Company does not use futures, options, credit, equity or embedded derivatives in any of its fair value, cash flow or net investment hedge accounting relationships.

The following table provides the financial statement classification and impact of derivatives used in qualifying and non-qualifying hedge relationships, excluding the offset of the hedged item in an effective hedge relationship:

			Year Ended December 31,
			2009	2008	2007
			(in millions)
Qualifying Hedges Fair value hedges
	Interest Rate
		Realized investment gains (losses)	$          340	$          (551)	$         (199)
		Net investment income	(157)	(99)	15
		Interest credited to policyholder account balances – (increase)/decrease	70	17	(16)
	Currency

B-109

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

		Other Income		-	5	-
			Total fair value hedge	$          253	$        $          (628)	$          (200)
Cash flow hedges
	Interest Rate
		Interest credited to policyholder account balances – (increase)/decrease .		$            (7)	$                3	$         (1)
		Accumulated Other Comprehensive Income (1)		29	(31)	4
	Currency/ Interest Rate
		Net investment income		(2)	(10)	(4)
		Interest expense ……		-	11	29
		Other Income .		(4)	(37)	(47)
		Accumulated Other Comprehensive Income (1)		(156)	127	(62)
			Total cash flow hedges .	$         (140)	$              63	$         (81)
Net investment hedges
	Currency
		Realized investment gains (losses) (2)		$                -	$                -	$            (1)
		Accumulated Other Comprehensive Income (1)		(5)	14	(6)
			Total net investment hedges	$            (5)	$            14	$            (7)

B-110

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Non- qualifying hedges
	Realized investment gains (losses)
		Interest Rate …..		$       (508)	$       1,435	$          87
		Currency		(36)	35	(16)
		Currency/Interest Rate		(162)	232	(32)
		Credit		-	95	(45)
		Equity		(239)	159	21
		Embedded Derivatives (Interest/Credit/Equity)		1,280	(1,382)	(126)
			Total non-qualifying  hedges	$         335	$         574	$         (111)
			Total Derivative Impact	$         443	$         23	$         (399)
_________________ (1)Amounts deferred in Equity (2)Relates to the sale of an equity method investment

For the years ended December 31, 2009, 2008 and 2007 the ineffective portion of derivatives accounted for using hedge accounting was not material to the Company’s results of operations and there were no material amounts reclassified into earnings relating to instances in which the Company discontinued cash flow hedge accounting because the forecasted transaction did not occur by the anticipated date or within the additional time period permitted by the authoritative guidance for the accounting for derivatives and hedging. In addition, there were no instances in which the Company discontinued fair value hedge accounting due to a hedged firm commitment no longer qualifying as a fair value hedge.

Presented below is a roll forward of current period cash flow hedges in “Accumulated other comprehensive income (loss)” before taxes:

	(in millions)
Balance, December 31, 2006	$      (153)
Net deferred losses on cash flow hedges from January 1to December 31, 2007	(52)
Amount reclassified into current period earnings	(6)
Balance, December 31, 2007	(211)
Net deferred gains on cash flow hedges from January 1to December 31, 2008	138
Amount reclassified into current period earnings	(42)
Balance, December 31, 2008	(115)
Net deferred losses on cash flow hedges from January 1to December 31, 2009	(151)
Amount reclassified into current period earnings	24
Balance, December 31, 2009	$     (242)

Using December 31, 2009 values it is anticipated that a pre-tax loss of approximately $9 million will be reclassified from “Accumulated other comprehensive income (loss)” to earnings during the year ended December 31, 2010, offset by amounts pertaining to the hedged items. As of December 31, 2009, the Company does not have any qualifying cash flow hedges of forecasted transactions other than those related to the variability of the payment or receipt of interest or foreign currency amounts on existing financial instruments. The maximum length of time for which these variable cash flows are hedged is 14 years. Income amounts deferred in “Accumulated other comprehensive income (loss)” as a result of cash flow hedges are included in “Net unrealized investment gains (losses)” in the Consolidated Statements of Equity.

For effective net investment hedges, the amounts, before applicable taxes, recorded in the cumulative translation adjustment account within “Accumulated other comprehensive income (loss)” was $123 million and $128 million as of December 31, 2009 and 2008, respectively.

B-111

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Credit Derivatives Written

The following tables set forth the Company’s exposure from credit derivatives where the Company has written credit protection, excluding a credit derivative related to surplus notes issued by a subsidiary of Prudential Insurance and embedded derivatives contained in externally-managed investments in the European market, by NAIC designation of the underlying credits as of December 31, 2009 and December 31, 2008.

NAIC Designation			December 31, 2009
	Single Name		First to Default Basket(1)			Total
	Notional	Fair Value	Notional	Fair Value	Notional	Fair Value
			(in millions)
1	$         28	$             —	$        119	$         —	$        147	$           —
2	—	—	242	(3)	242	(3)
Subtotal ...	28	—	361	(3)	389	(3)
3	—	—	104	(1)	104	(1)
4	—	—	—	—	—	—
5	—	—	50	(1)	50	(1)
6	—	—	—	—	—	—
Subtotal ...	—	—	154	(2)	154	(2)
Total	$         28	$—	$       515	$          (5)	$       543	$          (5)

NAIC Designation			December 31, 2008
	Single Name		First to Default Basket(1)		Total
	Notional	Fair Value	Notional	Fair Value	Notional	Fair Value
			(in millions)
1	$          20	$             —	$       192	$         (17)	$       212	$         (17)
2	5	—	417	(63)	422	(63)
Subtotal ...	25	—	609	(80)	634	(80)
3	—	—	15	(2)	15	(2)
4	—	—	—	—	—	—
5	5	—	93	(26)	98	(26)
6	—	—	—	—	—	—
Subtotal ...	5	—	108	(28)	113	(28)
Total	$          30	$             —	$       717	$      (108)	$    747	$      (108)

___________

(1) First-to-default credit swap baskets, which may include credits of varying qualities, are grouped above based on the lowest credit in the basket. However, such basket swaps may entail greater credit risk than the rating level of the lowest credit.

The following table sets forth the composition of the Company’s credit derivatives where the Company has written credit protection excluding the credit derivative related to surplus notes issued by a subsidiary of Prudential Insurance and embedded derivatives contained in externally-managed investments in the European market, by industry category as of the dates indicated.

B-112

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

	December 31, 2009			December 31, 2008
Industry		Notional	Fair Value		Notional	Fair Value
			(in millions)
Corporate Securities:
Manufacturing……		$           5	$             -		$             5	$               -
Utilities …………		5	-		5	-
Finance ……………		-	-		-	-
Services ……………		8	-		5	-
Energy ……………..		-	-		-	-
Transportation ……..		-	-		-	-
Retail and Wholesale ..		10	-		10	-
Other ………………		-	-		5	-
First to Default Baskets(1)		515	(5)		717	(108)
Total Credit Derivatives		$       543	$         (5)		$           747	$        (108)
___________ (1)   Credit default baskets may include various industry categories.

The Company holds certain externally-managed investments in the European market which contain embedded derivatives whose fair value are primarily driven by changes in credit spreads. These investments are medium term notes that are collateralized by investment portfolios primarily consisting of investment grade European fixed income securities, including corporate bonds and asset-backed securities, and derivatives, as well as varying degrees of leverage. The notes have a stated coupon and provide a return based on the performance of the underlying portfolios and the level of leverage. The Company invests in these notes to earn a coupon through maturity, consistent with its investment purpose for other debt securities. The notes are accounted for under U.S. GAAP as available for sale fixed maturity securities with bifurcated embedded derivatives (total return swaps). Changes in the value of the fixed maturity securities are reported in Equity under the heading “Accumulated Other Comprehensive Income (Loss)” and changes in the market value of the embedded total return swaps are included in current period earnings in “Realized investment gains (losses), net.” The Company’s maximum exposure to loss from these investments was $703 million and $528 million at December 31, 2009 and 2008, respectively.

In addition to writing credit protection, the Company has purchased credit protection using credit derivatives in order to hedge specific credit exposures in the Company’s investment portfolio. As of December 31, 2009 and 2008, the Company had $1.275 billion and $781 million of outstanding notional amounts, reported at fair value as an asset of $173 million and an asset of $196 million, respectively.

Types of Derivative Instruments and Derivative Strategies used in a dealer or broker capacity

Futures, forwards and options contracts, and swap agreements, are also used in a derivative dealer or broker capacity (excluding derivative contracts transacted with affiliates, which are discussed in Note 20) in the Company’s commodities operations to facilitate transactions of the Company’s clients, hedge proprietary trading activities and as a means of risk management. These derivatives allow the Company to structure transactions to manage its exposure to commodities and securities prices, foreign exchange rates and interest rates. Risk exposures are managed through diversification, by controlling position sizes and by entering into offsetting positions.  For example, the Company may manage the risk related to its precious metals inventory by entering into an offsetting position in exchange traded futures contracts.

The fair value of the Company’s derivative contracts used in a derivative dealer or broker capacity is reported on a net-by-counterparty basis in the Company’s Consolidated Statements of Financial Position when management believes a legal right of setoff exists under an enforceable netting agreement.

B-113

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Realized and unrealized gains and losses from marking-to-market the derivatives used in proprietary positions are recognized on a trade date basis and reported in “Other income.”

The following table sets forth the income statement impact of derivatives used in a dealer or broker capacity.

	Year Ended December 31, 2009
Other income
Interest Rate	$	(19	)
Commodity		54
Currency		52
Equity		3
Total other income	$	90

Credit Risk

The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial derivative transactions. The Company manages credit risk by entering into derivative transactions with major international financial institutions and other creditworthy counterparties, and by obtaining collateral where appropriate. Additionally, limits are set on single party credit exposures which are subject to periodic management review.

The credit exposure of the Company’s over-the-counter (OTC) derivative transactions is represented by the contracts with a positive fair value (market value) at the reporting date. To reduce credit exposures, the Company seeks to (i) enter into OTC derivative transactions pursuant to master agreements that provide for a netting of payments and receipts with a single counterparty (ii) enter into agreements that allow the use of credit support annexes (CSAs), which are bilateral rating-sensitive agreements that require collateral postings at established threshold levels. Likewise, the Company effects exchange-traded futures and options transactions through regulated exchanges and these transactions are settled on a daily basis, thereby reducing credit risk exposure in the event of non-performance by counterparties to such financial instruments.

The vast majority of the Company’s OTC derivative agreements are with highly rated major international financial institutions. The Company incorporates the market’s perception of non-performance risk in determining the fair value of its OTC derivative assets and liabilities.  Credit spreads are applied to the derivative fair values on a net basis by counterparty.  To reflect the Company’s own credit spread a proxy based on relevant debt spreads is applied to OTC derivative net liability positions.  Similarly, the Company’s counterparty’s credit spread is applied to OTC derivative net asset positions.

Certain of the Company’s derivative agreements with some of its counterparties contain credit-risk related triggers. If the Company’s credit rating were to fall below a certain level, the counterparties to the derivative instruments could request termination at the then fair value of the derivative or demand immediate full collateralization on derivative instruments in net liability positions. If a downgrade occurred and the derivative positions were terminated, the Company anticipates it would be able to replace the derivative positions with other counterparties in the normal course of business. The aggregate fair value of all derivative instruments with credit-risk-related contingent features that are in a net liability position were $697 million as of December 31, 2009. In the normal course of business the Company has posted collateral related to these instruments of $667 million as of December 31, 2009. If the credit-risk-related contingent features underlying these agreements had been triggered on December 31, 2009, the Company estimates that it would be required to post a maximum of $30 million of additional collateral to its counterparties.

B-114

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

22.           COMMITMENTS AND GUARANTEES, CONTINGENT LIABILITIES AND LITIGATION AND REGULATORY MATTERS

Commitments and Guarantees

The Company occupies leased office space in many locations under various long-term leases and has entered into numerous leases covering the long-term use of computers and other equipment. Rental expense, net of sub-lease income, incurred for the years ended December 31, 2009, 2008 and 2007 was $67 million, $62 million and $67 million, respectively.

The following table presents, at December 31, 2009, the Company’s contractual maturities on long-term debt, as more fully described in Note 14, and future minimum lease payments under non-cancelable operating leases along with associated sub-lease income:

		Long-term Debt		Operating Leases		Sub-lease Income
		(in millions)
2010		$	-	$	81	$	(11)
2011			225		74		(6)
2012			4		62		(6)
2013			4		51		(4)
2014			904		38		(4)
2015 and thereafter			5,792		78		-
	Total	$	6,929	$	384	$	(31)

Occasionally, for business reasons, the Company may exit certain non-cancelable operating leases prior to their expiration. In these instances, the Company’s policy is to accrue, at the time it ceases to use the property being leased, the future rental expense and any sub-lease income, and to release this reserve over the remaining commitment period. Of the $384 million in total non-cancelable operating leases and $31 million in total sub-lease income, $17 million and $23 million, respectively, has been accrued at December 31, 2009.

In connection with the Company’s origination of commercial mortgage loans, it had outstanding commercial mortgage loan commitments with borrowers of $486 million at December 31, 2009.

The Company also has other commitments, some of which are contingent upon events or circumstances not under the Company’s control, including those at the discretion of the Company’s counterparties. These other commitments amounted to $7,904 million at December 31, 2009. Reflected in these other commitments are $7,850 million of commitments to purchase or fund investments, including $4,674 million that the Company anticipates will ultimately be funded from its separate accounts.  Of these separate account commitments, $1,991 million have recourse to Prudential Insurance if the separate accounts are unable to fund the amounts when due.

In the course of the Company’s business, it provides certain guarantees and indemnities to third parties pursuant to which it may be contingently required to make payments now or in the future.

B-115

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

A number of guarantees provided by the Company relate to real estate investments held in its separate accounts, in which entities that the separate account has invested in have borrowed funds, and the Company has guaranteed their obligations. The Company provides these guarantees to assist these entities in obtaining financing. The Company’s maximum potential exposure under these guarantees was $2,131 million at December 31, 2009, of which all but $195 million is limited to the assets of the separate account and of which exposure primarily relates to guarantees limited to fraud, criminal activity or other bad acts. These guarantees generally expire at various times over the next fifteen years. At December 31, 2009, no amounts were accrued as a result of the Company’s assessment that it is unlikely payments will be required. Any payments that may become required under these guarantees would either first be reduced by proceeds received by the creditor on a sale of the underlying collateral, or would provide rights to obtain the underlying collateral.

As discussed in Note 21, the Company writes credit derivatives under which the Company is obligated to pay the counterparty the referenced amount of the contract and receive in return the defaulted security or similar security. The Company’s maximum amount at risk under these credit derivatives, assuming the value of the underlying referenced securities become worthless, is $976 million as of December 31, 2009. This amount excludes exposures related to credit derivatives written with affiliates. These credit derivatives generally have maturities of five years or less.

Certain contracts underwritten by the Retirement segment include guarantees related to financial assets owned by the guaranteed party. These contracts are accounted for as derivatives and carried at fair value. At December 31, 2009, such contracts in force carried a total guaranteed value of $10,222 million. These guarantees are supported by collateral that is not reflected on the Company’s balance sheet. This collateral had a fair value of $10,433 million at December 31, 2009.

In connection with certain acquisitions, the Company has agreed to pay additional consideration in future periods, contingent upon the attainment by the acquired entity of defined operating objectives. At December 31, 2009, maximum potential future consideration pursuant to such arrangements, to be resolved over the following three years, is $65 million. Any such payments would result in increases in intangible assets, such as goodwill.

The Company is also subject to other financial guarantees and indemnity arrangements. The Company has provided indemnities and guarantees related to acquisitions, dispositions, investments and other transactions that are triggered by, among other things, breaches of representations, warranties or covenants provided by the Company. These obligations are typically subject to various time limitations, defined by the contract or by operation of law, such as statutes of limitation. In some cases, the maximum potential obligation is subject to contractual limitations, while in other cases such limitations are not specified or applicable. Since certain of these obligations are not subject to limitations, it is not possible to determine the maximum potential amount due under these guarantees. At December 31, 2009, the Company has accrued liabilities of $6 million associated with all other financial guarantees and indemnity arrangements, which does not include retained liabilities associated with sold businesses.

Contingent Liabilities

On an ongoing basis, the Company’s internal supervisory and control functions review the quality of sales, marketing and other customer interface procedures and practices and may recommend modifications or enhancements.  From time to time, this review process results in the discovery of product administration, servicing or other errors, including errors relating to the timing or amount of payments or contract values due to customers. In certain cases, if appropriate, the Company may offer customers remediation and may incur charges, including the cost of such remediation, administrative costs and regulatory fines.

It is possible that the results of operations or the cash flow of the Company in a particular annual period could be materially affected as a result of payments in connection with the matters discussed above or other matters depending, in part, upon the results of operations or cash flow for such period. Management believes, however, that ultimate payments in connection with these

B-116

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

matters, after consideration of applicable reserves and rights to indemnification, should not have a material adverse effect on the Company’s financial position.

Litigation and Regulatory Matters

The Company is subject to legal and regulatory actions in the ordinary course of its businesses. The Company’s legal and regulatory actions include proceedings specific to it and proceedings generally applicable to business practices in the industries in which it operates, including in both cases businesses that have either been divested or placed in wind-down status.  The Company is subject to class action lawsuits and individual lawsuits involving a variety of issues, including sales practices, underwriting practices, claims payment and procedures, additional premium charges for premiums paid on a periodic basis, denial or delay of benefits, return of premiums or excessive premium charges and breaching fiduciary duties to customers.  In its investment-related operations, the Company is subject to litigation involving commercial disputes with counterparties or partners and class action lawsuits and other litigation alleging, among other things, that the Company has made improper or inadequate disclosures in connection with the sale of assets and annuity and investment products or charged excessive or impermissible fees on these products, recommended unsuitable products to customers, mishandled customer accounts or breached fiduciary duties to customers. The Company is also subject to litigation arising out of its general business activities, such as its investments, contracts, leases and labor and employment relationships, including claims of discrimination and harassment and could be exposed to claims or litigation concerning certain business or process patents. Regulatory authorities from time to time make inquiries and conduct investigations and examinations relating particularly to the Company and its businesses and products.  In addition, the Company, along with other participants in the businesses in which it engages, may be subject from time to time to investigations, examinations and inquiries, in some cases industry-wide, concerning issues or matters upon which such regulators have determined to focus. In some of the Company’s pending legal and regulatory actions, parties are seeking large and/or indeterminate amounts, including punitive or exemplary damages.  The outcome of a litigation or regulatory matter, and the amount or range of potential loss at any particular time, is often inherently uncertain.  The following is a summary of certain pending proceedings.

In April 2009, a purported nationwide class action, Schultz v. The Prudential Insurance Company of America, was filed in the United States District Court for the Northern District of Illinois.  In January 2010, the court dismissed the complaint without prejudice.  In February 2010, plaintiff sought leave to amend the complaint to add another plaintiff and to name the ERISA welfare plans in which they were participants individually and as representatives of a purported defendant class of ERISA welfare plans for which Prudential offset benefits.  The proposed amended complaint alleges that Prudential Insurance and the welfare plans violated ERISA by offsetting family Social Security benefits against Prudential contract benefits and seeks a declaratory judgment that the offsets are unlawful as they are not “loss of time” benefits and recovery of the amounts by which the challenged offsets reduced the disability payments.

In November 2008, a purported nationwide class action, Garcia v. Prudential Insurance Company of America, was filed in the United States District Court for the District of New Jersey.  The complaint, which is brought on behalf of beneficiaries of Prudential Insurance policies whose death benefits were placed in retained asset accounts, alleges that by investing the death benefits in these accounts, Prudential Insurance wrongfully delayed payment and improperly retained undisclosed profits.  It alleges claims of breach of the contract of insurance, breach of contract with regard to the retained asset accounts, breach of fiduciary duty and unjust enrichment, and seeks an accounting, disgorgement, injunctive relief, attorneys’ fees, and prejudgment and post-judgment interest.   In March 2009, Prudential filed a motion to dismiss the complaint.  In December 2009, the case was dismissed. The time to appeal has expired.

From November 2002 to March 2005, eleven separate complaints were filed against Prudential Financial, the Company and the law firm of Leeds Morelli & Brown in New Jersey state court.  The cases were consolidated for pre-trial proceedings in New Jersey Superior Court, Essex County and captioned Lederman v. Prudential Financial, Inc., et al. The complaints allege that an alternative dispute resolution agreement entered into among Prudential Insurance, over 350 claimants who are current and former

B-117

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

Prudential Insurance employees, and Leeds Morelli & Brown (the law firm representing the claimants) was illegal and that Prudential Insurance conspired with Leeds Morelli & Brown to commit fraud, malpractice, breach of contract, and violate racketeering laws by advancing legal fees to the law firm with the purpose of limiting Prudential Insurance’s liability to the claimants.  In 2004, the Superior Court sealed these lawsuits and compelled them to arbitration.  In May 2006, the Appellate Division reversed the trial court’s decisions, held that the cases were improperly sealed, and should be heard in court rather than arbitrated.  In March 2007, the court granted plaintiffs’ motion to amend the complaint to add over 200 additional plaintiffs and a claim under the New Jersey discrimination law but denied without prejudice plaintiffs’ motion for a joint trial on liability issues.  In June 2007, Prudential Financial and Prudential Insurance moved to dismiss the complaint.  In November 2007, the court granted the motion, in part, and dismissed the commercial bribery and conspiracy to commit malpractice claims, and denied the motion with respect to other claims.  In January 2008, plaintiffs filed a demand pursuant to New Jersey law stating that they were seeking damages in the amount of $6.5 billion.  In February 2010, the New Jersey Supreme Court assigned the cases for centralized case management to the Superior Court, Bergen County.

The Company, along with a number of other insurance companies, received formal requests for information from the State of New York Attorney General’s Office (“NYAG”), the Securities and Exchange Commission (“SEC”), the Connecticut Attorney General’s Office, the Massachusetts Office of the Attorney General, the Department of Labor, the United States Attorney for the Southern District of California, the District Attorney of the County of San Diego, and various state insurance departments relating to payments to insurance intermediaries and certain other practices that may be viewed as anti-competitive. In December 2006, Prudential Insurance reached a resolution of the NYAG investigation.  Under the terms of the settlement, Prudential Insurance paid a $2.5 million penalty and established a $16.5 million fund for policyholders, adopted business reforms and agreed, among other things, to continue to cooperate with the NYAG in any litigation, ongoing investigations or other proceedings.  Prudential Insurance also settled the litigation brought by the California Department of Insurance and agreed to business reforms and disclosures as to group insurance contracts insuring customers or residents in California and to pay certain costs of investigation.  In April 2008, Prudential Insurance reached a settlement of proceedings relating to payments to insurance intermediaries and certain other practices with the District Attorneys of San Diego, Los Angeles and Alameda counties.  Pursuant to this settlement, Prudential Insurance paid $350,000 in penalties and costs.  These matters are also the subject of litigation brought by private plaintiffs, including purported class actions that have been consolidated in the multidistrict litigation in the United States District Court for the District of New Jersey, In re Employee Benefit Insurance Brokerage Antitrust Litigation. In August and September 2007, the court dismissed the antitrust and RICO claims.  In January and February 2008, the court dismissed the ERISA claims with prejudice and the state law claims without prejudice.  Plaintiffs have appealed the dismissal of the antitrust and RICO claims to the United States Court of Appeals for the Third Circuit.

In October 2007, Prudential Retirement Insurance and Annuity Co. (“PRIAC”) filed an action in the United States District Court for the Southern District of New York, Prudential Retirement Insurance & Annuity Co. v. State Street Global Advisors, in PRIAC’s fiduciary capacity and on behalf of certain defined benefit and defined contribution plan clients of PRIAC, against an unaffiliated asset manager, State Street Global Advisors (“SSgA”) and SSgA’s affiliate, State Street Bank and Trust Company (“State Street”).  This action seeks, among other relief, restitution of certain losses attributable to certain investment funds sold by SSgA as to which PRIAC believes SSgA employed investment strategies and practices that were misrepresented by SSgA and failed to exercise the standard of care of a prudent investment manager.  PRIAC also intends to vigorously pursue any other available remedies against SSgA and State Street in respect of this matter.  Given the unusual circumstances surrounding the management of these SSgA funds and in order to protect the interests of the affected plans and their participants while PRIAC pursues these remedies, PRIAC implemented a process under which affected plan clients that authorized PRIAC to proceed on their behalf have received payments from funds provided by PRIAC for the losses referred to above.  The Company’s consolidated financial statements for the year ended December 31, 2007 include a pre-tax charge of $82 million, reflecting these payments to plan clients and certain related costs.  In September 2008, the United States District Court for the Southern District of New York denied the State Street defendants’ motion to dismiss claims for damages and other relief under Section 502(a)(2) of ERISA, but dismissed the claims for equitable relief under Section 502(a)(3) of ERISA.  In October 2008, defendants answered the complaint and asserted counterclaims for contribution and indemnification, defamation and violations of Massachusetts’ unfair and deceptive

B-118

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

trade practices law.  In February 2010, State Street reached a settlement with the SEC over charges that it misled investors about their exposure to subprime investments, resulting in significant investor losses in mid-2007.  Under the settlement, State Street will pay approximately $313 million in disgorgement, pre-judgment interest, penalty and compensation into a Fair Fund that will be distributed to injured investors.  Consequently, State Street will pay PRIAC, for deposit into its separate accounts, approximately $52.5 million within 14 days of the entry of a final judgment by the United States District Court for the District of Massachusetts.   By the terms of the settlement, State Street’s payment to PRIAC does not resolve any claims PRIAC has against State Street or SSgA in connection with the losses in the investment funds SSgA managed, and the penalty component of State Street’s SEC settlement cannot be used to offset or reduce compensatory damages in the action against State Street and SSgA.

In June 2009, special bankruptcy counsel for Lehman Brothers Holdings Inc. (“LBHI”), Lehman Brothers Special Financing ("LBSF") and certain of their affiliates made a demand of Prudential Global Funding LLC ("PGF"), a subsidiary of the Company, for the return of a portion of the $550 million in collateral delivered by LBSF to PGF pursuant to swap agreements and a cross margining and netting agreement between PGF, LBSF and Lehman Brothers Finance S.A. a/k/a Lehman Brothers Finance AG ("Lehman Switzerland"), a Swiss affiliate that is subject to insolvency proceedings in the United States and Switzerland. LBSF claims that PGF wrongfully applied the collateral to Lehman Switzerland’s obligations in violation of the automatic stay in LBSF’s bankruptcy case, which is jointly administered under In re Lehman Brothers Holdings Inc. in the United States Bankruptcy Court in the Southern District of New York (the “Lehman Chapter 11 Cases”).  In August 2009, PGF filed a declaratory judgment action in the same court against LBSF, Lehman Switzerland and LBHI (as guarantor of LBSF and Lehman Switzerland under the swap agreements) seeking an order that (a) PGF had an effective lien on the collateral that secured the obligations of both LBSF ($197 million) and Lehman Switzerland ($488 million) and properly foreclosed on the collateral leaving PGF with an unsecured $135 million claim against LBSF (and LBHI as guarantor) or, in the alternative, (b) PGF was entitled, under the Bankruptcy Code, to set off amounts owed by Lehman Switzerland against the collateral and the automatic stay was inapplicable.  The declaratory judgment action is captioned Prudential Global Funding LLC v. Lehman Brothers Holdings Inc., et al.  In addition, PGF filed timely claims against LBSF and LBHI in the Lehman Chapter 11 Cases for any amounts due under the swap agreements, depending on the results of the declaratory judgment action.  In October 2009, LBSF and LBHI answered in the declaratory judgment action and asserted counterclaims that PGF breached the swap agreement, seeking a declaratory judgment that PGF had a perfected lien on only $178 million of the collateral that could be applied only to amounts owed by LBSF and no right of set off against Lehman Switzerland's obligations, as well as the return of collateral in the amount of $372 million plus interest and the disallowance of PGF's claims against LBSF and LBHI.  LBSF and LBHI also asserted cross-claims against Lehman Switzerland seeking return of the collateral.  In December 2009, PGF filed a motion for judgment on the pleadings to resolve the matter in its favor.  In February 2010, LBSF and LBHI cross-moved for judgment on the pleadings.

In April 2009, Prudential Financial’s Board of Directors (the "Board") received a letter demanding that the Board take action to recover allegedly improperly paid compensation to certain current and former employees and executive officers of the Company since at least 2005.  The demand is made by a Prudential Financial stockholder, Service Employees International Union Pension Plans Master Trust ("SEIU"), and is one of many that SEIU has sent to large corporations.  SEIU claims that the Company must bring an action, under theories of unjust enrichment and corporate waste, to recoup incentive compensation that was based on allegedly flawed economic metrics.  SEIU also seeks rescission of exercised stock options because the options were based on mistaken facts concerning the fair value of the Company's stock.  The letter states that between 2005 and 2008 the Company paid cash and equity compensation of approximately $165 million to its senior executives and authorized senior executives to exercise stock options worth approximately $66 million.  The letter also demands that the Board enjoin any further approved, but unpaid, compensation payments, overhaul the Company's compensation structure, and allow stockholders an advisory vote on the Compensation Committee's report in the Company's annual proxy statement. SEUI reserves the right to bring a derivative action should the Board decline to act. In May 2009, the Board formed a Special Evaluation Committee, comprised of independent directors, and authorized the Committee to hire outside advisors and experts to assist in its evaluation of the demand letter. The Committee has engaged counsel that is reviewing the matter.

B-119

THE PRUDENTIAL INSURANCE COMPANY OF AMERICA

Notes to Consolidated Financial Statements

In October 2006, a class action lawsuit, Bouder v. Prudential Financial, Inc. and Prudential Insurance Company of America, was filed in the United States District Court for the District of New Jersey, claiming that Prudential Insurance failed to pay overtime to insurance agents who were registered representatives in violation of federal and Pennsylvania law, and that improper deductions were made from these agents’ wages in violation of state law.  The complaint seeks back overtime pay and statutory damages, recovery of improper deductions, interest, and attorneys’ fees. In March 2008, the court conditionally certified a nationwide class.   In March 2008, a purported nationwide class action lawsuit was filed in the United States District Court for the Southern District of California, Wang v. Prudential Financial, Inc. and Prudential Insurance, on behalf of agents who sold the Company’s financial products.  The complaint alleges claims that the Company failed to pay overtime and provide other benefits in violation of California and federal law and seeks compensatory and punitive damages in unspecified amounts.  In September 2008, Wang was transferred to the United States District Court for the District of New Jersey and consolidated with the Bouder matter.  In January 2009, an amended complaint was filed in the consolidated matter which adds wage claims based on the laws of thirteen additional states.  In March 2009, a second amended complaint was filed which dropped the breach of contract claims.  The Company moved to dismiss certain of the state claims in the consolidated complaint.  In December 2009, certain of the state claims were dismissed.  In February 2010, Prudential Insurance moved to decertify the federal wage and hour class conditionally certified in March 2008, and moved for summary judgement as to the federal wage and hour claims of the named plaintiffs.

The Company’s litigation and regulatory matters are subject to many uncertainties, and given their complexity and scope, their outcome cannot be predicted. It is possible that the Company’s results of operations or cash flow in a particular annual period could be materially affected by an ultimate unfavorable resolution of pending litigation and regulatory matters depending, in part, upon the results of operations or cash flow for such period. In light of the unpredictability of the Company’s litigation and regulatory matters, it is also possible that in certain cases an ultimate unfavorable resolution of one or more pending litigation or regulatory matters could have a material adverse effect on the Company’s financial position.  Management believes, however, that, based on information currently known to it, the ultimate outcome of all pending litigation and regulatory matters, after consideration of applicable reserves and rights to indemnification, is not likely to have a material adverse effect on the Company’s financial position.

B-120

Report of Independent Registered Public Accounting Firm

Tothe Board of Directors and Stockholder of

The Prudential Insurance Company of America:

In our opinion, the accompanying consolidated statements of financial position and the related consolidated statements of operations, of equity and of cash flows present fairly, in all material respects, the financial position of The Prudential Insurance Company of America  (a wholly owned subsidiary of Prudential Holdings, LLC, which is a wholly owned subsidiary of Prudential Financial, Inc), and its subsidiaries (collectively, the "Company") at December 31, 2009 and 2008, and the results of their operations and their cash flows for each of the three years in the period endedDecember 31, 2009in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.  We believe that our audits provide a reasonable basis for our opinion.

As described in Note 2 of the consolidated financial statements, the Company changed its method of determining and recording other-than-temporary impairment for debt securities, and of presenting non-controlling interest on January 1, 2009. Also the Company adopted a framework for measuring fair value on January 1, 2008 and changed its method of accounting for uncertainty in income taxes, for deferred acquisition costs in connection with modifications or exchanges of insurance contracts, and for income tax-related cash flows generated by a leveraged lease transaction on January 1, 2007.

/s/ PricewaterhouseCoopers LLP

New York, New York

April 2, 2010

B-121

PART C:

OTHER INFORMATION

Item 26.   EXHIBITS

Exhibit number                                                                     Description of Exhibit

(a)	Board of Directors Resolution:
(i)		Resolution of Board of Directors of The Prudential Insurance Company of America establishing The Prudential Variable Appreciable Account. (Note 6)
(b)	Not Applicable.
(c)	Underwriting Contracts:
(i)		Distribution Agreement between Pruco Securities LLC and The Prudential Insurance Company of America. (Note 6)
(ii)		Proposed form of Agreement between Pruco Securities LLC and independent brokers with respect to the Sale of the Contracts. (Note 6)
(iii)		Schedules of Sales Commissions. (Note 6)
(d)	Contracts:
(i)		Variable Appreciable Life Insurance Contracts: (Note 1)
		(a)  With fixed death benefit for use in New Jersey and domicile approval states. (b)  With variable death benefit for use in New Jersey and domicile approval states. (c)  With fixed death benefit for use in non-domicile approval states. (d)  With variable death benefit for use in non-domicile approval states.
(ii)		Rider for Insured's Waiver of Premium Benefit. (Note 1)
(iii)		Rider for Applicant's Waiver of Premium Benefit. (Note 1)
(iv)		Rider for Insured's Accidental Death Benefit. (Note 1)
(v)		Rider for Level Term Insurance Benefit on Life of Insured. (Note 1)
(vi)		Rider for Decreasing Term Insurance Benefit on Life of Insured. (Note 1)
(vii)		Rider for Interim Term Insurance Benefit. (Note 1)
(viii)		Rider for Option to Purchase Additional Insurance on Life of Insured. (Note 1)
(ix)		Rider for Decreasing Term Insurance Benefit on Life of Insured Spouse. (Note 1)
(x)		Rider for Level Term Insurance Benefit on Dependent Children. (Note 1)
(xi)		Rider for Level Term Insurance Benefit on Dependent Children from Term Conversions. (Note 1)
(xii)		Rider for Level Term Insurance Benefit on Dependent Children from Term Conversions or Attained Age Change. (Note 1)
(xiii)		Endorsement defining Insured Spouse. (Note 1)
(xiv)		Rider covering lack of Evidence of Insurability on a Child. (Note 1)
(xv)		Rider modifying Waiver of Premium Benefit. (Note 1)
(xvi)		Rider to terminate a Supplementary Benefit. (Note 1)
(xvii)		Rider providing for election of Variable Reduced Paid-up Insurance. (Note 1)
(xviii)		Rider to provide for exclusion of Aviation Risk. (Note 1)
(xix)		Rider to provide for exclusion of Military Aviation Risk. (Note 1)
(xx)		Rider to provide for exclusion for War Risk. (Note 1)
(xxi)		Rider to provide for Reduced Paid-up Insurance. (Note 1)
(xxii)		Rider providing for Option to Exchange Policy. (Note 1)
(xxiii)		Endorsement defining Ownership and Control of the Contract. (Note 1)
(xxiv)		Rider providing for Modification of Incontestability and Suicide Provisions. (Note 1)
(xxv)		Endorsement issued in connection with Non-Smoker Qualified Contracts. (Note 1)
(xxvi)		Endorsement issued in connection with Smoker Qualified Contracts. (Note 1)
(xxvii)		Home Office Endorsement. (Note 1)
(xxviii)		Endorsement showing Basis of Computation for Non-Smoker Contracts. (Note 1)
(xxix)		Endorsement showing Basis of Computation for Smoker Contracts. (Note 1)
(xxx)		Rider for Term Insurance Benefit on Life of Insured-Decreasing Amount After Three Years.  (Note 1)
(xxxi)		Rider for Renewable Term Insurance Benefit on Life of Insured. (Note 1)
(xxxii)		Rider for Level Term Insurance Benefit on Life of Insured Spouse. (Note 1)
(xxxiii)		Living Needs Benefit Rider: (a) for use in Florida. (Note 1) (b) for use in all approved jurisdictions except Florida and New York. (Note 1) (c) for use in New York. (Note 1)
(xxxiv)		Rider for Renewable Term Insurance Benefit on Life of Insured Spouse. (Note 1)
(xxxv)		Rider for Level Term Insurance Benefit on Life of InsuredPremium Increases Annually. (Note 1)
(xxxvi)		Rider for Term Insurance Benefit on Life of Insured Decreasing Amount. (Note 1)
(xxxvii)		Rider for a Level Premium Option. (Note 1)
(xxxviii)		Payment of Unscheduled Premium Benefit (Note 1)
(xxxix)		Rider for Scheduled Term Insurance Benefit on Life of Insured. (Note 1)
(xl)		Endorsement altering the Assignment provision.  (Note 1)
(xli)		Rider for Non-Convertible Term Insurance Benefit on Life of Insured Spouse. (Note 1)
(xlii)		Rider for Convertible Term Insurance Benefit on Life of Insured Spouse. (Note 1)
(xliii)		Rider for Level Term Insurance Benefit on Life of InsuredPremium Increases Annually  (Note 1)
(xliv)		Rider for Non-Convertible Term Insurance Benefit on Life of Insured. (Note 1)
(xlv)		Rider for Convertible Term Insurance Benefit on Life of Insured. (Note 1)
(xlvi)		Endorsement for altering List of Investment Options. (Note 1)
(e)	Application:
(i)		Application Form. (Note 6)
(ii)		Supplement to the Application for Variable Appreciable Life Insurance Contract. (Note 6)
(f)	Depositor’s Certificate of Incorporation and By-Laws:
(i)		Charter of The Prudential Insurance Company of America, as amended July 19, 2004. (Note 3)
(ii)		By-laws of The Prudential Insurance Company of America, as amended December 9, 2008.  (Note 6)
(g)	None.
(h)	Participation Agreements:
(i)		Form of 22c-2 Agreement (Note 4)
(i)	Administrative Contracts:
(i)		Service Agreement between Prudential and First Tennessee Bank National Association.           (Note 5)
(ii)		Service Arrangement between Prudential, First Tennessee Bank National Association, and the Regulus Group. (Note 1)
(j)	Powers of Attorneys (Note 1):
		T. Baltimore, F. Becker, G. Bethune, W. Caperton, III, R. Carbone, G. Casellas, J. Cullen, J. Fleurant, W. Gray, III, M. Grier, J. Hanson, C. Horner, K. Krapek, C. Poon, J. Strangfeld, Jr., J. Unruh
(k)	Opinion and Consent of Thomas C. Castano, Esq., as to the legality of the securities being registered. (Note 1)
(l)	Not Applicable.
(m)	Not Applicable.
(n)	Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.     (Note 1)
(o)	None.
(p)	Not Applicable.
(q)	Redeemability Exemption:
(i)		Memorandum describing Prudential's issuance, transfer, and redemption procedures for the Contracts pursuant to Rule 6e-3(T)(b)(12)(iii) and method of computing adjustments in payments and cash surrender values upon conversion to fixed-benefit policies pursuant to Rule 6e-3(T)(b)(13)(v)(B). (Note 2)

---------------------------------------------------------

(Note 1)	Filed herewith.
(Note 2)	Incorporated by reference to Post-Effective Amendment No. 28 to this Registration Statement, filed April 26, 2005 on behalf of The Prudential Variable Appreciable Account.
(Note 3)	Incorporated by reference to Post-Effective Amendment No. 18 to Form S-1, Registration No. 33-20083-01, filed April 14, 2005 on behalf of The Prudential Variable Contract Real Property Account.
(Note 4)	Incorporated by reference to Post-Effective Amendment No. 30 to this Registration Statement, filed April 18, 2007 on behalf of The Prudential Variable Appreciable Account.
(Note 5)	Incorporated by reference to Post-Effective Amendment No. 31 to this Registration Statement, filed April 17, 2008 on behalf of The Prudential Variable Appreciable Account.
(Note 6)	Incorporated by reference to Post-Effective Amendment No. 32 to this Registration Statement, filed April 21, 2009 on behalf of The Prudential Variable Appreciable Account.

Item 27.   Directors and Major Officers of Prudential

The directors and major officers of Prudential, listed with their principal occupations, are shown below. The Principal business address of the directors and officers listed below is 751 Broad Street, Newark, New Jersey 07102.

DIRECTORS OF PRUDENTIAL

THOMAS J. BALTIMORE - Director.  Co-Founder and President of RLJ Development, LLC.  Mr. Baltimore is also a director of Duke Realty Corporation and of Integra LifeSciences Holdings Corporation.

FREDERIC K. BECKER - Director.  Chairman, Audit Committee; Member, Executive Committee.  President, Wilentz Goldman & Spitzer, P.A. (law firm).

GORDON M. BETHUNE - Director.  Member, Corporate Governance and Business Ethics Committee; Member, Compensation Committee. Mr. Bethune is also a director of Aloha Airlines, Honeywell International, Inc., New York Academy of Arts, Sprint Nextel Corporation, and Theater Under the Stars.

W. GASTON CAPERTON, III - Director.Member, Finance and Dividends Committee; Member, Investment Committee; President, The College Board.  Governor Caperton is also a director of Energy Corporation of America, Owens Corning, United Bankshares, Inc., and West Virginia Media.

GILBERT F. CASELLAS - Director.  Member, Audit Committee.  Mr. Casella is also a director of the American Arbitration Association and of The Swarthmore Group, Inc.

JAMES G. CULLEN - Director.  Chairman, Compensation Committee; Member, Audit Committee; Member, Executive Committee.  Mr. Cullen is also a director of Agilient Technologies, Inc., the Eisenhower Medical Center, Johnson & Johnson, and NeuStar, Inc.

WILLIAM H. GRAY, III - Director.  Chairman, Corporate Governance and Business Ethics Committee; Member, Executive Committee.  Mr. Gray is the Co-Chairman of GrayLoeffler, LLC.  Mr. Gray is also a director of Dell Inc., JP Morgan Chase & Co., Pfizer, Inc., and Visteon Corporation.

MARK B. GRIER - Director.  Vice Chairman of the Board of Prudential Financial, Inc. and The Prudential Insurance Company of America.

JON F. HANSON - Director.  Chairman, Executive Committee, Finance and Dividends Committee, and Investment Committee.  Mr. Hanson is the Chairman of The Hampshire Companies and the Chairman of James E. Hanson Management Company.  Mr. Hanson is also a director of HealthSouth Corp., Pascack Community Bank, and Yankee Global Enterprises.

CONSTANCE J. HORNER - Director.  Member, Compensation Committee; Member, Corporate Governance and Business Ethics Committee.  Former Assistant to the President of the United States.  Ms. Horner is also a director of Ingersoll-Rand Company, Ltd. and of Pfizer, Inc.

KARL J. KRAPEK - Director.  Member, Finance and Dividends Committee; Member, Investment Committee.  Mr. Krapek is also a director of Connecticut Bank and Trust Company, Lucent-Alcatel, Northrup Grunman Corporation, and Visteon Corporation.

CHRISTINE A. POON - Director.  Member, Finance and Dividends Committee; Member, Investment Committee.  Ms. Poon is also retired Vice Chairman, Board of Directors and Worldwide Chairman of Johnson & Johnson.  Ms. Poon is also a director of Royal Philips Electronics and of Fox Chase Cancer Center.

JOHN R. STRANGFELD, JR. - Chairman, Chief Executive Officer, and President of Prudential Financial Inc. and The Prudential Insurance Company of America.

JAMES A. UNRUH - Director.  Member, Audit Committee.  Founding Principal, Alerion Capital Group, LLC.  Mr. Unruh is also a director of CSG Systems International, Inc., Qwest Communications International, Inc., and Tenet Healthcare Corporation.

PRINCIPAL OFFICERS

EDWARD P. BAIRD - Executive Vice President, International Businesses, Prudential.

SUSAN L. BLOUNT - Senior Vice President and General Counsel, Prudential.

RICHARD J. CARBONE - Executive Vice President and Chief Financial Officer, Prudential.

ROBERT M. FALZON - Senior Vice President and Treasurer, Prudential.

JOHN T. FLEURANT - Vice President and Controller, Prudential.

MARGARET M. FORAN - Vice President, Corporate Secretary and Chief Governance Officer, Prudential.

HELEN M. GALT - Senior Vice President, Company Actuary and Chief Risk Officer, Prudential.

ROBERT C. GOLDEN - Executive Vice President, Prudential.

MARK B. GRIER - Vice Chairman, Prudential.

JOHN R. STRANGFELD, JR. - Chairman, Chief Executive Officer, and President, Prudential.

SHARON C. TAYLOR - Senior Vice President, Corporate Human Resources, Prudential.

BERNARD B. WINOGRAD - Executive Vice President, U.S. Businesses, Prudential.

Item 28.   Persons Controlled by or Under Common Control with the Depositor or the Registrant

See Annual Report on Form 10-K of Prudential Financial, Inc., File No. 001-16707, filed February 26, 2010.

Item 29.   Indemnification

The Registrant, in connection with certain affiliates, maintains various insurance coverages under which the underwriter and certain affiliated persons may be insured against liability, which may be incurred in such capacity, subject to the terms, conditions, and exclusions of the insurance policies.

New Jersey, being the state of organization of Prudential, permits entities organized under its jurisdiction to indemnify directors and officers with certain limitations.  The relevant provisions of New Jersey law permitting indemnification can be found in Section 14A:3-5 of the New Jersey Statutes Annotated.  The text of Prudential's By-law Article VII, Section 1, which relates to indemnification of officers and directors, was filed on April 21, 2009 as exhibit Item 26. (f)(ii) to Form N-6 of this Registration Statement on behalf of The Prudential Variable Appreciable Account.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 (the “Act”) may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

Item 30.   Principal Underwriters

(a) Pruco Securities, LLC ("Prusec"), an indirect wholly-owned subsidiary of Prudential Financial, acts as the Registrant's principal underwriter of the Contract.  Prusec, organized on September 22, 2003 under New Jersey law, is registered as a broker and dealer under the Securities Exchange Act of 1934 and is a registered member of the Financial Industry Regulatory Authority, Inc. (“FINRA”).  (Prusec is a successor company to Pruco Securities Corporation, established on February 22, 1971.)  Prusec's principal business address is 751 Broad Street, Newark, New Jersey 07102.

Prusec acts as principal underwriter and general distributor for the following separate investment accounts and their affiliates:

Pruco Life Variable Universal Account

Pruco Life Variable Appreciable Account

Pruco Life of New Jersey Variable Appreciable Account

The Prudential Variable Appreciable Account

Pruco Life PRUvider Variable Appreciable Account

Pruco Life Variable Insurance Account

Pruco Life of New Jersey Variable Insurance Account

The Prudential Variable Contract Account GI-2 (prior to May 1, 2010)

The Contract is sold by registered representatives of Prusec who are also authorized by state insurance departments to do so.  The Contract may also be sold through other broker-dealers authorized by Prusec and applicable law to do so.

(b)
MANAGERS AND OFFICERS OF PRUCO SECURITIES, LLC (“Prusec”)
Name and Principal Business Address --------------------------------------------------	Position and Office With Depositor ---------------------------------------------
John W. Greene  (Note 1)	Chairman of the Board, Manager
John G. Gordon  (Note 1)	President, Manager, Chief Operating Officer
Margaret R. Horn (Note 1)	Controller, Chief Financial Officer
Andrew M. Shainberg (Note 1)	Vice President, Chief Compliance Officer
Noreen M. Fierro (Note 2)	Vice President, Anti-Money Laundering Officer
Sandra Cassidy (Note 1)	Secretary, Chief Legal Officer
Charles E. Anderson (Note 8)	Vice President
Joan H. Cleveland (Note 1)	Vice President
Yolanda M. Doganay (Note 1)	Vice President
Margaret M. Foran (Note 2)	Vice President, Assistant Secretary
Mark A. Hug  (Note 1)	Vice President, Manager
Patrick L. Hynes  (Note 5)	Vice President
Charles M. Topp (Note 4)	Vice President
Michele Talafha  (Note 4)	Assistant Vice President
Richard W. Kinville (Note 2)	Assistant Vice President
James J. Avery, Jr (Note 1)	Manager
Stephen Pelletier (Note 7)	Manager
Judy A. Rice (Note 3)	Manager
Matthew J. Voelker (Note 6)	Manager
David Campen  (Note 1)	Assistant Controller
Robert Szuhany  (Note 1)	Assistant Controller
Janice Pavlou  (Note 1)	Assistant Controller
Mary E. Yourth (Note 1)	Assistant Controller
Robert M. Falzon (Note 2)	Treasurer
Paul F. Blinn   (Note 1)	Assistant Treasurer
Kathleen C. Hoffman  (Note 2)	Assistant Treasurer
Laura J. Delaney (Note 2)	Assistant Treasurer
John M. Cafiero (Note 2)	Assistant Secretary
Thomas C. Castano  (Note 1)	Assistant Secretary
Patricia Christian  (Note 1)	Assistant Secretary
Mary Jo Reich  (Note 1)	Assistant Secretary
(Note 1) 213 Washington Street, Newark, NJ 07102
(Note 2) 751 Broad Street, Newark, NJ 07102
(Note 3) Three Gateway Center, Newark, NJ  07102
(Note 4) One New York Plaza, New York, NY 10292
(Note 5) 200 Wood Avenue South, Iselin, NJ  08830
(Note 6) 2998 Douglas Boulevard, Suite 220, Roseville, CA  95661
(Note 7) One Corporate Drive, Shelton, CT 06484
(Note 8) 13001 County Road 10, Plymouth, MN 55442

(c) Prusec passes through the gross distribution revenue it receives to broker-dealers for their sales and does not retain any portion of it in return for its services as distributor for the Contracts.  However, Prusec does retain a portion of compensation it receives with respect to sales by its representatives.  Prusec retained compensation of $8,360,812 in 2009, $15,852,244 in 2008, and $16,112,532 in 2007.  Prusec offers the Contract on a continuous basis.

The sum of the chart below is $67,749,409, which represents Prusec's total 2009 Variable Life Distribution Revenue.  The amount includes both agency distribution and broker-dealer distribution.

Compensation received by Prusec during the last fiscal year with respect to variable life insurance products.
Principal Underwriter	Gross Distribution Revenue*	Compensation on Events Occasioning the Deduction of a Deferred Sales Load	Brokerage Commissions**	Other Compensation
Prusec	$53,875,442	$-0-	$13,873,967	$-0-

* Represents Variable Life Distribution Revenue for the agency channel.

** Represents Variable Life Distribution Revenue for the broker-dealer channel.

Because Prusec registered representatives who sell the Contracts are also our life insurance agents, they may be eligible for various cash bonuses and insurance benefits and non-cash compensation programs that we or our affiliates offer, such as conferences, trips, prizes, and awards, subject to applicable regulatory requirements.  In some circumstances and to the extent permitted by applicable regulatory requirements, we may also reimburse certain sales and marketing expenses.

Item 31.   Location of Accounts and Records

The Depositor, The Prudential Insurance Company of America, is located at 751 Broad Street, Newark, New Jersey 07102-3777.

The Principal Underwriter, Pruco Securities, LLC, is located at 751 Broad Street, Newark, New Jersey 07102-3777.

Each company maintains those accounts and records required to be maintained pursuant to Section 31(a) of the Investment Company Act and the rules promulgated thereunder.

Item 32.   Management Services

Not Applicable.

Item 33.   Representation of Reasonableness of Fees

The Prudential Insurance Company of America (“Prudential”) represents that the fees and charges deducted under the Variable Appreciable Life Insurance Contracts registered by this registration statement, in the aggregate, are reasonable in relation to the services rendered, the expenses expected to be incurred, and the risks assumed by Prudential.

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant, The Prudential Variable Appreciable Account, certifies that this Amendment is filed solely for one or more of the purposes specified in Rule 485(b)(1) under the Securities Act of 1933 and that no material event requiring disclosure in the prospectus, other than one listed in Rule 485(b)(1), has occurred since the effective date of the most recent Post-Effective Amendment to the Registration Statement which included a prospectus, and has caused this Registration Statement to be signed on its behalf by the undersigned thereunto duly authorized, and its seal hereunto affixed and attested, all in the city of Newark and the State of New Jersey, on this 8th day of April, 2010.

(Seal)

The Prudential Variable Appreciable Account

(Registrant)

By: The Prudential Insurance Company of America

(Depositor)

Attest:                /s/ Thomas C. Castano                                                 Thomas C. Castano    Assistant Secretary By:         /s/ Scott D. Kaplan                                      Scott D. Kaplan Vice President, Finance

Pursuant to the requirements of the Securities Act of 1933, this Post-Effective Amendment No. 33 to the Registration Statement has been signed below by the following persons in the capacities indicated on this 8th day of April, 2010.

Signature and Title
/s/ *                                                                                John R. Strangfeld, Jr. President, Chairman of the Board, and Chief Executive Officer
/s/ *                                                                                John T. Fleurant Vice President and Corporate Controller
/s/ *                                                                                Richard J. Carbone Executive Vice President and Chief Financial Officer
/s/ *                                                                                Thomas J. Baltimore Director	* By:                /s/ Thomas C. Castano                                               Thomas C. Castano             (Attorney-in-Fact)
/s/ *                                                                                Frederic K. Becker Director
/s/ *                                                                                Gordon M. Bethune Director
/s/ *                                                                                W. Gaston Caperton, III Director
/s/ *                                                                                Gilbert F. Casellas Director
/s/ *                                                                                James G. Cullen Director
/s/ *                                                                                William H. Gray, III Director
/s/ *                                                                                Mark B. Grier Director /s/ *                                                                                Jon F. Hanson Director
/s/ *                                                                                Constance J. Horner Director
/s/ *                                                                                Karl J. Krapek Director	* By:                /s/ Thomas C. Castano                                            Thomas C. Castano              (Attorney-in-Fact)
/s/ *                                                                                Christine A. Poon Director
/s/ *                                                                                James A. Unruh Director

EXHIBIT INDEX

Item 26.
(d) Contracts:	All Contracts, Riders, and Endorsements: (d)(i) through (d)(xlvi)	C-
(i) Administrative Contracts:	(ii) Service Arrangement between Prudential, First Tennessee Bank National Association, and the Regulus Group.	C-
(j) Powers of Attorneys:	T. Baltimore, F. Becker, G. Bethune, W. Caperton, III, R. Carbone,       G. Casellas, J. Cullen, J. Fleurant, W. Gray, III, M. Grier, J. Hanson,       C. Horner, K. Krapek, C. Poon, J. Strangfeld, Jr.,  J. Unruh	C-
(k) Legal Opinion and Consent:	Opinion and Consent of Thomas C. Castano, Esq., as to the legality of the securities being registered.	C-
(n) Auditor Consent:	Consent of PricewaterhouseCoopers LLP, Independent Registered    Public Accounting Firm.	C-

EX-99.D CONTRACTS

                                                         EXHIBIT 26(d)(i)(a)

[Prudential Logo]

The Prudential Insurance Company of America

a mutual life insurance company

Corporate Office, Newark, New Jersey

               Insured   JOHN DOE                                                                          XX XXX XXX   Policy Number

 SEP 10, 1988   Contract Date

           Face Amount   $50,000—

Premium Period   LIFE

             Agency   R-NK 1

---------------------------------------------------------------------------------------------------------------------------------------------------------------

     We will pay the beneficiary the proceeds of this contract promptly if we receive due proof that the Insured died. We make this promise subject to all the provisions of the contract.

     The proceeds arising from the Insured's death will be the insurance amount, plus the amount of any extra benefit arising from the Insured's death (unless the contract is in default or there is contract debt). The insurance amount may be fixed or variable depending on the payment of premiums, the investment experience of the variable investment options, any excess interest credited to the fixed investment options, and the charges made. But it will not be less than the face amount. (We describe the insurance amount on page 16.)

     The cash value may increase or decrease daily depending on the payment of premiums, the investment experience of the variable investment options, any excess interest credited to the fixed investment options, and the charges made.

There is no guaranteed minimum.

     We specify a schedule of premiums. Additional premiums may be paid at your option subject to the limitations in the contract.

     Please read this contract with care. A summary is on page 5. If there is ever a question about it, or if there is a claim, just see one of our agents or get in touch with one of our offices.

        Right to Cancel contract.--You may return this contract to us within: (1) 10 days after you get it, or (2) 45 days after Part 1 of the application was signed, or (3) 10 days after we mail or deliver to you any withdrawal right notice required by the Securities and Exchange Commission, whichever is latest. All you have to do is take the contract or mail it to one of our offices or to the agent who sold it to you. It will be canceled from the start and we will promptly give you the value of your contract fund on the date you return the contract to us. We will also give back any charges we made in accord with this contract.

Signed for Prudential.

              /s/  SPECIMEN                                                            /s/  SPECIMEN

              ----------------------                                                          ------------------------

             Secretary                                                                      President

     Modified Premium Variable Whole Life Insurance Policy. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums. Cash values reflect premium payments, investment results and charges. Death benefit guaranteed if scheduled premiums duly paid and no contract debt or withdrawals. Increase in face amount at attained age 21 if contract issued at age 14 or lower. Eligible for annual

dividends as stated under Dividends.

---------------------------------------------------------------------------------------------------------------------------------------------------------------

VALA--88

GUIDE TO CONTENTSPage

Contract Data .............................................................  ………………………………………………………………….3

  List of Contract Minimums;  List of Supplementary Benefits, if any; Summary

  of Face Amount; Schedule of Premiums; Schedule  of Deduction from Premium Payments; Schedule

  of Monthly Deductions from the Contract Fund;  Schedule of Other Charges; Schedule of

  Maximum Surrender Charges; Table of Maximum  Monthly Rates; List of Investment Options;

  Schedule of Initial Allocation of Invested Premium  Amounts;

Tabular Values ....................................................................................................................................................  4

Contract Summary ..............................................................................................................................................  5

  Table of Basic Amounts

General Provisions...............................................................................................................................................  6

  Definitions; The Contract; Contract  Modifications; Ownership and Control;

  Suicide Exclusion; Currency; Misstatement  of Age or Sex; Incontestability; Assignment;

  Annual Report; Increase in Face Amount  at Age 21 for Contracts Issued at Age 14

  or Lower; Payment of Death Claim; Change in Plan

Beneficiary............................................................................................................................................................  8

Premium Payment and Reinstatement.................................................................................................................  8

  Payment of Premiums; Basic Premiums; Charge for Applicable Taxes; Scheduled Premiums;

  Unscheduled Premiums; Invested Premium Amount; Contract Change Date(s); Allocations;

  Premium Account; Default; Grace Period;  Reinstatement

Face Amount Changes and Withdrawals ........................................................................................................... 12

  Face Amount; Increase in Face Amount; Decrease in Face Amount;

  Withdrawals

Dividends ............................................................................................................................................................ 14

  Participation; Dividend Options; Dividend Credits Described; Settlement

Separate Account ............................................................................................................................................... 15

  Separate Account; Variable Investment Options; Separate Account Investments

Fixed Investment Options ................................................................................................................................... 16

Transfers ............................................................................................................................................................. 16

Insurance Amount ............................................................................................................................................. 16

Contract Fund .................................................................................................................................................... 16

  Contract Fund Defined; Guaranteed Interest; Excess Interest, Charge for Extra Rating Class;

  Charge for Extra Benefits; Monthly Deduction

Contract Value Options ...................................................................................................................................... 18

  Benefit After the Grace Period; Extended Insurance; Fixed Reduced Paid-up

  Insurance; Variable Reduced Paid-up Insurance Computations; Optional Benefit; Cash Value

  Option; Tabular Values

Loans .................................................................................................................................................................. 21

  Loan Requirements; Contract Debt; Loan Value; Interest Charge; Fixed Loan Rate Option;

  Variable Loan Rate Option; Repayment; Effect of a Loan; Excess Contract Debt; Postponement

  of Loan

Settlement Options ............................................................................................................................................. 23

  Payee Defined; Choosing an Option; Options Described; First Payment Due Date;

  Residue Described; Withdrawal of Residue; Designating

  Contingent Payee(s); Changing Options; Conditions; Death of Payee

Automatic Mode of Settlement ............................................................................................................................ 26

   Applicability; Interest on Proceeds;  Settlement at Payee's Death; Spendthrift and

   Creditor

Income Tables .................................................................................................................................................... 27

Voting Rights ...................................................................................................................................................... 28

Home Office Locations ....................................................................................................................................... 28

    Any supplementary benefits and a copy of the application follow page 28.

(VALA--88)                                                                           Page 2H

CONTRACT DATA

Insured's Sex and Issue Age                                                                           M-35

Insured                                           JOHN DOE                      XX XXX XXX                                           Policy Number

    Face Amount                                                 $50,000--                      SEP 10, 1988                                           Contract Date

Premium Period                                                  LIFE

Agency                                              R-NK 1

        Beneficiary                                                CLASS 1                      MARY DOE, WIFE

            CLASS 2                      ROBERT DOE, SON

  Fixed Loan Interest Rate

LIST OF CONTRACT MINIMUMS

The minimum unscheduled premium is $25.

The minimum increase in face amount is $25,000.

The minimum decrease in face amount is $10,000.

The minimum face amount is $50,000.

***** END OF LIST *****

LIST OF SUPPLEMENTARY BENEFITS

***** NONE *****

SUMMARY OF FACE AMOUNT

EFFECTIVE           RATING            CONTRACT CHANGE

AMOUNT             DATE                     CLASS               DATE

Initial                                 $50,000--         SEP 10, 1988       NONSMOKER      SEP 10, 2018

***** END OF SUMMARY *****

SCHEDULE OF PREMIUMS

Scheduled premiums are equal to the basic premium plus the charge for applicable taxes. The initial scheduled premium due on the contract date is $454.59. Due dates of scheduled premiums occur on the contract date and at intervals of 12 months after that date.

Basic Premiums are                                                                $ 445.50 each

Changing on SEP 10, 2018 to                                              $ 2299.00 each

***** END OF SCHEDULE *****

VAL—88                                                                           PAGE 3

POLICY NO. XX XXX XXX

SCHEDULE OF DEDUCTIONS FROM PREMIUM PAYMENTS

From each premium paid, we first deduct a charge for applicable taxes (other than taxes discussed on page 17) of 2%. We reserve the right to change this percentage to conform to changes in the law or if the insured changes residence.

From the remainder, we deduct a charge for payment processing of up to $2.00.

After deduction of this amount, the balance is the invested premium amount.

***** END OF SCHEDULE *****

SCHEDULE OF MONTHLY DEDUCTIONS FROM THE CONTRACT FUND

The maximum monthly deduction, which provides for administration expenses, sales expenses, the guaranteed minimum death benefit and the expected cost of mortality, is equal to:

     (a)  $6.56, changing on Sep 10, 2018 to $15.83, plus

     (b)  an amount equal to the maximum monthly rate (see Table of Maximum Monthly Rates) multiplied by the coverage amount (described on page 18).

***** END OF SCHEDULE *****

***** SCHEDULE OF OTHER CHARGES *****

There is a charge of up to $15 for any withdrawal or decrease in face amount.

***** END OF SCHEDULE *****

SCHEDULE OF MAXIMUM SURRENDER CHARGES

For full surrender at the beginning of the contract year indicated, the maximum charge we will deduct from the contract fund is shown below. For surrender at other times, the amount of the charge will reflect the number of days since the beginning of the contract year. For any decrease in face amount, we will deduct a proportionate part of the surrender charge.

Year of Surrender	Surrender Charge	Year of Surrender	Surrender Charge
1	457.00	6	457.00
2	457.00	7	365.00
3	457.00	8	274.00
4	457.00	9	183.00
5	457.00	10	91.50

                           ***** END OF SCHEDULE *****

VAL--88(H)                                                                            PAGE 3A

                                                         POLICY NO. XX XXX XXX

TABLE OF MAXIMUM MONTHLY RATES PER $1000

FOR MONTHLY DEDUCTION (SEE PAGE 18)

  Insured's                               Maximum                                               Insured's                                           Maximum

Attained Age                          Rate                                                      Attained Age                                Rate

- ------------                                 -------                                                      ------------                                           ---------

      35                                           0.1439                                                      68                                                       2.4893

      36                                           0.1514                                                      69                                                       2.7438

      37                                           0.1614                                                      70                                                       3.0317

      38                                           0.1722                                                      71                                                       3.3603

      39                                           0.1839                                                      72                                                       3.7397

      40                                           0.1980                                                      73                                                       4.1690

      41                                           0.2130                                                      74                                                       4.6407

      42                                           0.2288                                                      75                                                       5.1449

      43                                           0.2463                                                      76                                                       5.6774

      44                                           0.2654                                                      77                                                       6.2340

      45                                           0.2870                                                      78                                                       6.8180

      46                                           0.3103                                                      79                                                       7.4478

      47                                           0.3353                                                      80                                                       8.1434

      48                                           0.3627                                                      81                                                       8.9229

      49                                           0.3927                                                      82                                                       9.8023

      50                                           0.4268                                                      83                                                       10.7774

      51                                           0.4659                                                      84                                                       11.8290

      52                                           0.5108                                                      85                                                       12.9330

      53                                           0.5624                                                      86                                                       14.0753

      54                                           0.6198                                                      87                                                       15.2384

      55                                           0.6839                                                      88                                                       16.4173

      56                                           0.7538                                                      89                                                       17.6287

      57                                           0.8278                                                      90                                                       18.8899

      58                                           0.9102                                                      91                                                       20.2303

      59                                           1.0025                                                      92                                                       21.6995

      60                                           1.1057                                                      93                                                       23.4408

      61                                           1.2205                                                      94                                                       25.7770

      62                                           1.3528                                                      95                                                       29.2738

      63                                           1.5025                                                      96                                                       35.0252

      64                                           1.6689                                                      97                                                       45.0097

      65                                           1.8511                                                      98                                                       61.9945

      66                                           2.0483                                                      99                                                       83.1973

      67                                           2.2596

VAL--88(H)                                                                                     PAGE 3B

                                                          POLICY NO. XX XXX XXX

LIST OF INVESTMENT OPTIONS

I. THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

This account is registered with the SEC under the Investment Company Act of 1940. Each investment option of this account invests in a specific portfolio of The Prudential Series Fund. The fund is registered with the SEC under the Investment Company Act of 1940 as an open-end diversified management investment company. The fund has several portfolios. We show below the available investment options and the fund portfolios they invest in.

                      INVESTMENT                                                     FUND

                      OPTION                                                                PORTFOLIO

                      ----------                                                                ---------

                                Money Market                                           Money Market

                                Bond                                                            Bond

                                Common Stock                                           Common Stock

                                Aggressively Managed Flx                     Aggressively Managed Flx

                                Conservative Managed Flx                      Conservative Managed Flx

                                High Yield Bond                                         High Yield Bond

II. THE PRUDENTIAL REAL PROPERTY ACCOUNT

This account is not registered with the SEC under the Investment Company Act of 1940. The following investment option is available.

                                                                INVESTMENT

                                                                    OPTION

                                                                     --------

                                                                Real Estate

III. FIXED INVESTMENT OPTIONS

The fixed investment options are funded by the general account of the Company.

The following investment option is available.

                                                                INVESTMENT

                                                                   OPTION

                                                                      --------

                                                               Fixed Interest Rate

********* END OF LIST *********

           SCHEDULE OF INITIAL ALLOCATION OF INVESTED PREMIUM AMOUNTS

                      Money Market                                                                20%

                      Common Stock                                                                60%

                      Fixed Interest Rate                                                          20%

********* END OF SCHEDULE *********

VAL—88                                                                           PAGE 3C

POLICY NO. XX XXX XXX

TABULAR VALUES

Tabular values are calculated based on the scheduled premiums, guaranteed charges, assumed rate of return, no contract debt and no dividends credited. Actual values may be different than the tabular amounts shown below.

                                                    Tabular

                                                                                   Extended

    End of                  Tabular                                                            Tabular                  Tabular                          Insurance*

   Contract                 Contract                                                         Cash                       Reduced                       ---------------

     Year                     Fund                                                                 Value                     Paid-up                       Years      Days

                                                                                                                                          Insurance

 --------                 --------                                                                -------                        - ---------                                 -----      ----

      1                      292.00                                                                0.00                                    0.00                              0             0

      2                      591.50                                                                134.50                                531.00              
60;           1             7

      3                      898.00                                                                441.00                                1682.00              &# 160;         3           58

      4                     1210.50                                                                753.50                                2779.00               & #160;       4           360

      5                     1529.00                                                                1072.00                                3824.00                      6           170

      6                     1853.0                                                                1487.00                                5132.00               & #160;       8           41

      7                     2182.00                                                                1908.00                                6369.00                      9           151

      8                     2515.50                                                                2332.50                                7533.00                      10154

      9                     2853.00                                                                2761.50                                8632.00                      1163

     10                     3194.00                                                                3194.00                                9663.00                 ;    11262

     11                     3537.50                                                                3537.50                                10361.00                0;  11316

     12                     3882.50                                                                3882.50                                11012.00                0;  11338

     13                     4229.00                                                                4229.00                                11617.00                0;  11329

     14                     4575.00                                                                4575.00                                12174.00                0;  11294

     15                     4919.50                                                                4919.50                                12684.00                0;  11236

     16                     5261.00                                                                5261.00                                13146.00                0;  11158

     17                     5596.00                                                                5596.00                                13556.00                0;  1162

     18                     5922.00                                                                5922.00                                13913.00                0;  10314

     19                     6235.00                                                                6235.00                                14211.00                0;  10185

     20                     6532.00                                                                6532.00                                14449.00                0;  1046

   ATTAINED

     AGE

   --------

     60                      7635.00                                                                7635.00                                14635.00               0;    7     290

     62                      7796.50                                                                7796.50                                14158.00               0;    6     263

     65                      7500.00                                                                7500.00                                12612.00                   5         2

*There may be extra days of term insurance. We explain this under the Extended Insurance provision.

                  Nonforfeiture Factors, applicable during premium period, per $1,000 of initial face amount

                  Contract Years 1 through 30                  7.45334

                  Contract Years 31 and later                 43.02598

VAL—88                                                                           PAGE 4

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT SUMMARY

     This life insurance contract will provide benefits while the Insured is living and upon the Insured's death as described below.

     Unless we endorse the contract to say otherwise, it gives you the following rights, among others, subject to certain limitations and requirements:

·   You may change the beneficiary.

·   You may borrow on it up to its loan value.

·   You may change the allocation of future invested premium amounts among the investment options.

·   You may transfer amounts among the investment options.

·   You may change the face amount.

·   You may withdraw a portion of the contract's value.

·   You may surrender the contract. If you do, the proceeds will be the net cash value.

     To compute the proceeds payable upon the Insured's death, we start with a basic amount and adjust that amount as described in the table below.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

TABLE OF BASIC AMOUNTS

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

If the contract is in force:                     Then the basic amount is:                          And we adjust the basic amount for:

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

and not in default past its days       the insurance amount (see page                    contract debt (see page 21),

of grace                                              16) plus the amount of any extra                     dividend credits (see page

                                                             benefits arising from the                                  15), and any charges due in

                                                              Insured's death                                                 the days of grace (see page 11).

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

as reduced paid-up insurance        the amount of reduced paid-up                       contract debt and dividend

(see page 19)                                     insurance (see page 19)                                    credits since the reduced

                                                                                                                                          paid-up insurance began.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

as extended insurance (see           the amount of term insurance, if                        nothing.

page 18)                                            the Insured dies in the term (see

                                                            page 18); otherwise zero

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

     The contract may have extra benefits that we call supplementary benefits.  If it does, we list them under Supplementary Benefits on the contract data pages and describe them after page 28. The contract may have other extra benefits. If it does, we add them by rider. Any extra benefit ends as soon as the contract is in default past its days of grace, unless the form that describes it states otherwise.

     Proceeds need not be taken in one sum. For instance, on surrender, you may be able to choose a settlement option to provide retirement income or for some other purpose. If a death benefit becomes payable the beneficiary may also be able to make such a choice. We will automatically pay interest under Option 3 from the date of death on any death benefit to which no other manner of payment applies. This will be automatic as we state on page 26.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

(VALA--88)                                                                           Page 5

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

GENERAL PROVISIONS

DEFINITIONS

     We define here some of the words and phrases used all through this contract. We expIain others, not defined here, in other parts of the text.

     We, Our, Us and Company.--Prudential.

     You and Your.--The owner of the contract.

     Insured.--The person named as the Insured on the first page. He or she need not be the owner.

     Example: Suppose we issue a contract on the life of your spouse. You applied for it and named no one else as owner. Your spouse is the Insured and you are the owner.

     SEC.--The Securities and Exchange Commission.

     Issue Date.--The contract date.

     Monthly Date.--The contract date and the same day as the contract date in each later month.

     Example: If the contract date is May 9, 1988, the monthly dates are each May 9, June 9, July 9 and so on.

     Anniversary or Contract Anniversary.--The same day and month as the contract date in each later year.

     Example: If the contract date is May 9, 1988, the first anniversary is May 9, 1989. The second is May 9, 1990, and so on.

     Contract Year.--A year that starts on the contract date or on an anniversary.

     Example: If the contract date is May 9, 1988, the first contract year starts then and ends on May 8, 1989. The second starts on May 9, 1989 and ends on May 8, 1990, and so on.

     Contract Month.--A month that starts on a monthly date.

     Example: If May 9, 1988 is a monthly date, a contract month starts then and ends on June 8, 1988. The next contract month starts on June 9, 1988 and ends on July 8, 1988, and so on.

     Attained Age.--The Insured's attained age at any time is the issue age plus the length of time since the contract date. You will find the issue age near the top of page 3.

     Assumed Rate of Return.--The assumed rate of return is an effective rate of 4% a year. This is the same as 0.01074598% a day compounded daily.

THE CONTRACT

     This policy, and the attached copy of the initial application, together with copies of any subsequent applications to change the policy, and any additional contract data pages added to the policy, form the whole contract. We assume that all statements in an application are made to the best of the knowledge and belief of the person(s) who make them; in the absence of fraud they are deemed to be representations and not warranties. We rely on those statements when we issue or change the contract. We will not use any statement, unless made in an application, to try to void the contract or to deny a claim.

CONTRACT MODIFICATIONS

     Only a Prudential officer with the rank or title of vice president or above may agree to modify this contract, and then only in writing.

OWNERSHIP AND CONTROL

     Unless we endorse this contract to say otherwise: (1) the owner of the contract is the Insured; and (2) while the Insured is living the owner alone is entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us.

(VALA--88)                                                                           Page 6

SUICIDE EXCLUSION

     If the Insured, whether sane or insane, dies by suicide within two years from the issue date, we will pay no more under this contract than the sum of the premiums paid.

     Also, for any increase in the face amount, if the Insured, whether sane or insane, dies by suicide within two years from the effective date of the increase, we will pay, as to the increase in amount, no more than the sum of the scheduled premiums that were due for the increase.

CURRENCY

     Any money we pay, or that is paid to us, must be in United States currency.  Any amount we owe will be payable at our Corporate Office.

MISSTATEMENT OF AGE OR SEX

     If the Insured's stated age or sex or both are not correct, we will adjust each benefit and any amount to be paid to reflect the correct age and sex. Any death benefit will be based on what item (b) of the most recent monthly deduction (see pages 3A and 18), would have provided at the correct age and sex. Where required, we have given the insurance regulator a detailed statement of how we will make these adjustments.

     The Schedule of Premiums may show that basic premiums change or stop on a certain date. We may have used that date because the Insured would attain a certain age on that date. If we find that the issue age was wrong, we will correct that date and, if necessary, the amount of any changed premiums.

INCONTESTABILITY

     Except as we state in the next sentence, we will not contest this contract after it has been in force during the Insured's lifetime for two years from the issue date. There are two exceptions: (1) non-payment of enough premium to provide the required charges; and (2) any change in the contract that requires our approval and that would increase our liability. For any such change, we will not contest the change after it has been in effect during the Insured's lifetime for two years from the date it takes effect.

ASSIGNMENT

     We will not be deemed to know of an assignment unless we receive it, or a copy of it, at our Home Office. We are not obliged to see that an assignment is valid or sufficient. This contract may not be assigned to another insurance company or to any employee benefit plan without our consent. This contract may not be assigned if such assignment would violate any federal, state, or local law or regulation prohibiting sex distinct rates for insurance.

ANNUAL REPORT

     Each year we will send you a report. It will show: (1) the current death benefit; (2) the amount of the contract fund in each investment option; (3) the net cash value; (4) premiums paid, investment results, and charges deducted since the last report; (5) any withdrawals since the last report; and (6) any contract debt and the interest on the debt for the prior year. The report will also include any other data that may be currently required where this contract is delivered. No report will be sent if this contract is being continued under fixed reduced paid-up insurance or extended term insurance.

     You may ask for a similar report at some other time during the year. Or you may request from time to time a report projecting results under your contract on the basis of premium payment assumptions and assumed investment results. We have the right to make a reasonable charge for reports such as these that you ask for and to limit the scope and frequency of such requests.

INCREASE IN FACE AMOUNT AT AGE 21 FOR CONTRACTS ISSUED AT AGE 14 OR LOWER

     If this contract was issued at age 14 or lower, it shows on page 3 an increase in face amount at attained age 21 which applies if the contract is not then in default beyond its days of grace. In that case, any references in the contract to face amount or death benefit which apply at or after attained age 21 will be based on the increased face amount, unless otherwise stated.

PAYMENT OF DEATH CLAIM

     If we settle this contract in one sum as a death claim, we will usually pay the proceeds within seven days after we receive at our Home Office proof of death and any other information we need to pay the claim. But we have the right to postpone paying the part of the proceeds in excess of the face amount that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying the remainder of any excess for up to six months.

CHANGE IN PLAN

     You may be able to have this contract changed to another plan of life insurance either with us or with a subsidiary of ours. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

(VALA--88)                                                                           Page 7H

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

BENEFICIARY

     You may designate or change a beneficiary. Your request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office; this will be after you send the contract to us to be endorsed, if we ask you to do so. Then any previous beneficiary's interest will end as of the date of the request. It will end then even if the Insured is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know.

     When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. To show priority, we may use numbered classes, so that the class with first priority is called class 1, the class with next priority is called class 2, and so on. When we use numbered classes, these statements apply to beneficiaries unless the form states otherwise:

     1. One who survives the Insured will have the right to be paid only if no one in a prior class survives the Insured.

     2. One who has the right to be paid will be the only one paid if no one else in the same class survives the Insured.

     3. Two or more in the same class who have the right to be paid will be paid in equal shares.

     4. If none survives the Insured, we will pay in one sum to the Insured's estate.

     Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. We owe Jane the proceeds if she is living at the Insured's death. We owe Paul and John the proceeds if they are living then but Jane is not. But if only one of them is living, we owe him the proceeds. If none of them is living we owe the Insured's estate.

     Beneficiaries who do not have a right to be paid under these terms may still have a right to be paid under the Automatic Mode of Settlement.

     Before we make a payment, we have the right to decide what proof we need of the identity, age or any other facts about any persons designated as beneficiaries. If beneficiaries are not designated by name and we make payment(s) based on that proof, we will not have to make the payment(s) again.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

PREMIUM PAYMENT AND REINSTATEMENT

PAYMENT OF PREMIUMS

     Premiums may be paid at our Home Office or to any of our authorized agents.

If we are asked to do so, we will give a signed receipt.

     Premium payments will in most cases be credited as of the date of receipt at our Home Office. In the following cases, part or all of a premium payment will be credited as of a date other than the date of receipt:

     1. If the first premium payment is received after the contract date, the scheduled portion will be credited as of the contract date.

(VALA--88)                                                                           Page 8

     2. If the first premium payment is received before the contract date, it will be credited as of the contract date.

     3. If a premium payment is received during the 61-day period after a scheduled premium due date and the premium account is negative by no more than the scheduled premium then due, the portion of the payment needed to bring the premium account up to zero will be credited to the premium account, but not the contract fund, as of the due date.

     4. If the contract is in default and premium payments are received during the days of grace while the contract is in default, we will credit to the contract fund and the premium account those parts of the premium payments needed to end the default status as of the applicable monthly dates.

BASIC PREMIUMS

     We show the amount and frequency of the basic premiums in the Schedule of Premiums in the contract data pages. An increase or decrease in the face amount will change the basic premiums.

CHARGE FOR APPLICABLE TAXES

     The charge for applicable taxes is a percentage of each premium paid that we set from time to time. It will change only on a contract anniversary.

     At least sixty days before the start of each contract year, we will determine the rate we will charge for that contract year. The rate will be based on the rates of any federal, state or local premium taxes that apply at the last known address of the Insured.

SCHEDULED PREMIUMS

     The scheduled premiums are equal to the basic premiums plus the charge for applicable taxes. The scheduled premiums will change if the basic premiums change or the charge for applicable taxes changes. We show the amount of the first scheduled premium in the Schedule of Premiums. It is due on the contract date. There is no insurance under this contract unless an amount at least equal to the first scheduled premium is paid.

     The scheduled premium is the minimum premium required, at the frequency chosen, to continue the contract in full force if you pay all scheduled premiums when due, you make no withdrawals, and any contract debt does not exceed the cash value.

     If you wish to pay, on a regular basis, premiums that are higher than the scheduled premiums, we will bill you for the higher amount you choose. Or if you wish, you may from time to time make a premium payment smaller than the scheduled amount, subject to the minimum premium amount shown on page 3.

     If scheduled premiums that are due are not paid, or if smaller payments are made, the contract may then or at some future time go into default. Payment of less than the scheduled premium increases the risk that the contract will end if investment results are not favorable. The conditions under which the contract will be in default are described below.

UNSCHEDULED PREMIUMS

     Except as we state in the next paragraph, unscheduled premiums may be paid at any time during the Insured's lifetime as long as the contract is not in default beyond its days of grace. We show on page 3 the minimum premium we will accept.

     We have the right to limit unscheduled premiums to a total of $10,000 in any contract year. We also have the right to refuse any payment that increases the insurance amount by more than it increases the contract fund.

INVESTED PREMIUM AMOUNT

     This is the portion of each premium paid that we will add to the premium account and the contract fund. It is equal to the premium paid minus the charges described in the contract data pages under Schedule of Deductions from Premium Payments.

CONTRACT CHANGE DATE(S)

     We show the contract change date(s) in the contract data pages. We also show in the Schedule of Premiums on these pages that the amount of each basic premium will change on each contract change date and what the new premium will be. However, when a contract change date arrives we will compute a new premium amount to be used in calculating the premium account. The new premium that we compute will be no greater than the new premium for that date which we show in the contract data pages. In addition, if the premium account is less than zero, we will set the premium account to zero.

(VALA--88)                                                                           Page 9

     The Schedule of Premiums may show that the premium changes at times other than contract change dates. This may occur, for example, with a contract issued with extra benefits or in an extra rating class.

ALLOCATIONS

     You may allocate all or a part of your invested premium amount to one or more of the investment options listed in the contract data pages. You may choose to allocate nothing to a particular investment option. But any allocation you make must be at least 10%; you may not choose a fractional percent.

     Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or any percentage that is not a whole number. The total for all investment options must be 100%.

     The initial allocation of invested premium amounts is shown in the contract data pages. You may change the allocation for future invested premium amounts at any time if the contract is not in default. To do so, you must notify us in a form that meets our needs. The change will take effect on the date we receive your notice at our Home Office.

     A premium might be paid when the contract fund is less than zero. In that case we first use as much of the invested premium amount as we need to bring the fund up to zero. We will then allocate any remainder of the invested premium amount in accord with your most recent request.

PREMIUM ACCOUNT

     On the contract date, the premium account is equal to the invested premium amount credited on that date, minus the basic premium then due, plus the charge for payment processing. On any other day, the premium account is equal to:

     1. what it was on the prior day; plus

     2. if the premium account was greater than zero on the prior day, interest on the excess at 4% a year; minus

     3. if the premium account was less than zero on the prior day, interest on the deficit at 4% a year; plus

     4. any invested premium amount credited on that day; minus

     5. any basic premium due on that day less the charge for payment processing; minus

     6. any withdrawals on that day.

     If we credit a part of a payment as of an earlier date, as we describe under Payment of Premiums, the premium account for all days from the crediting date to the date of receipt will be recalculated.

DEFAULT

     Unless the contract is already in the grace period, we will determine on each monthly date whether the contract is in default. To do so, we will first deduct any applicable charges from the contract fund and add any applicable credits to it (the contract fund is described on page 16). We will then compute the amount which will grow to equal the tabular contract fund on the next monthly date if, during the current contract month: (1) any investment results are at the assumed rate and (2) we receive no premiums or loan repayments, make no loans and grant no withdrawals. We will compare this amount to the contract fund.

     If this amount is more than the contract fund, the difference is the fund deficit. In this case the contract is in default if the premium account is also less than zero.

(VALA--88)                                                                           Page 10

GRACE PERIOD

     The days of grace begin on any monthly date, other than the contract date, on which the contract goes into default. Within 30 days after any default we will send you a notice that your contract is in default. We will indicate the minimum payment required to bring the contract out of default and the length of the grace period for making that payment.

     We grant at least 61 days of grace from the date we mail you a notice of default. During the days of grace we will continue to accept premiums and make the charges we have set.

     If at any time during the days of grace we have received payments that in total are at least equal to the lesser of (a) the sum of the fund deficit on the date of default and any additional fund deficits on any subsequent monthly dates since the date of default, and (b) the sum of the amount by which the premium account is negative on the date of default and any scheduled premiums due since the date of default, the default will end.

     If at any time during the days of grace we have received payments that in total are at least equal to the lesser of (a) the fund deficit on the date of default, and (b) the amount by which the premium account is negative on the date of default, but that are insufficient to end the default, here is what we will do. We will determine a new default date which is the monthly date after the old default date. We will grant at least 61 days of grace from the new default date.

     If the contract is still in default when the days of grace are over, it will end and have no value, except as we state under Contract Value Options (see page 18). Any premiums paid during the days of grace will remain in the contract fund.

     The Insured might die in the days of grace while the contract is in default. If so, the amount needed to bring the contract out of default is due us. We will make an adjustment so that the proceeds will not include that amount.

     This contract might have an extra benefit that insures someone other than the Insured. And there might be a claim under that benefit while the Insured is living and in the days of grace while the contract is in default. In this case, we will subtract the amount needed to bring the contract out of default before we settle the claim.

REINSTATEMENT

     If this contract is still in default after the last day of grace, you may reinstate it. All these conditions must be met:

     1. The contract must not be in default more than five years.

     2. You must not have surrendered the contract for its net cash value.

     3. You must give us any facts we need to satisfy us that the Insured is insurable for the contract.

     4. We must be paid a premium at least equal to the amount required to bring the premium account up to zero on the first monthly date on which a scheduled premium is due after the date of reinstatement.

     5. If before reinstatement the contract is in force as reduced paid-up insurance (see page 19), any contract debt under reduced paid-up insurance must be repaid with interest or carried over to the reinstated contract.

(VALA--88)                                                                           Page 11

     If we approve the reinstatement, these statements apply. The date of reinstatement will be the date of your request or the date the required premium is paid, if later. We will start to make daily and monthly charges and credits again as of the date of reinstatement. We will deduct from the premium paid the charges from premium payments described in the contract data pages, and any charges in arrears, other than item (b) of the monthly deduction (see pages 3A and 18), with 4% interest to the date of reinstatement. The contract fund will be equal to the remainder, plus the cash value of the contract immediately before reinstatement, plus a refund of that part of any surrender charge deducted at the time of default which would be charged if the contract were surrendered immediately after reinstatement.

     If we consent, you may be able to reinstate the contract for a premium less than that described above. We will deduct the same charges and adjust the contract fund in the same manner. In that case, the premium account will be less than zero and you may need to pay more than the scheduled premiums to guarantee that the contract will not go into default again at some future time.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

FACE AMOUNT CHANGES AND WITHDRAWALS

FACE AMOUNT

     The face amount is shown on page 3. It will change if: (1) you increase or decrease it, or (2) you make a withdrawal.

INCREASE IN FACE AMOUNT

     After the first contract year, you may increase the face amount once each contract year. You may do so subject to all these conditions and the paragraph that follows:

     1. You must ask for the increase in writing in a form that meets our needs; if you are not the Insured and the Insured is age 8 or over, he or she must sign the form too.

     2. The amount of the increase must be at least equal to the minimum increase in face amount, which we show on page 3.

     3. You must give us any facts we need to satisfy us that the Insured is insurable for the amount of the increase.

     4. If we ask you to do so, you must send us the contract to be endorsed.

     5. The contract must not be in default.

     6. We must not since the issue date, have changed the basis on which benefits and charges are calculated under newly issued contracts.

     7. You must make any required payment.

     8. The Insured must be eligible for the same rating class and benefits as shown on page 3.

     9. We must not be waiving premiums in accord with any waiver of premium benefit that may be included in the contract.

     An increase will take effect only if we approve your request for it at our Home Office. If we approve the increase, we will recompute the contract's basic premiums, maximum surrender charges, tabular values, monthly deductions, and

expense charges. We will send you new contract data pages showing the amount and effective date of the increase and the recomputed values. If the Insured is not living on the effective date, the increase will not take effect.

(VALA--88)                                                                           Page 12H

DECREASE IN FACE AMOUNT

     After the first contract year, you may decrease the face amount. You may do so subject to all these conditions and the paragraphs that follow:

     1 . You must ask for the decrease in writing in a form that meets our needs.

     2. The amount of the decrease must be at least equal to the minimum decrease in face amount, which we show on page 3.

     3. The face amount after the decrease must be at least equal to the minimum face amount, which we show on page 3.

     4. If we ask you to do so, you must send us the contract to be endorsed.

     A decrease will take effect only if we approve your request for it at our Home Office. If we approve the decrease, we will recompute the contract's basic premiums, maximum surrender charges, tabular values, monthly deductions, and expense charges. A decrease in face amount may also affect the amount of any extra benefits this contract might have. We will send you new contract data pages showing the amount and effective date of the decrease and the recomputed values. If the Insured is not living on the effective date, the decrease will not take effect.

     We may deduct an administrative fee of up to $15.00, and a proportionate part of any then applicable surrender charge from the contract fund.

WITHDRAWALS

     You may make withdrawals from the contract. You may do so subject to all these conditions and the paragraphs that follow:

     1. You must ask for the withdrawal in writing in a form that meets our needs.

     2. The amount withdrawn, plus the net cash value after withdrawal, may not be more than the net cash value before withdrawal.

     3. The contract fund after withdrawal must not be less than the tabular contract fund for the new face amount.

     4. You may not withdraw less than $2,000 at any one time.

     5. You may make up to four withdrawals in any contract year.

     6. The face amount after the withdrawal must be at least equal to the minimum face amount, which we show on page 3.

     7. If we ask you to do so, you must send us the contract to be endorsed.

     We may deduct an administrative fee of up to $15.00, and a proportionate part of any then applicable surrender charge, based on the reduction in the face amount described below, from the contract fund.

     We will decrease the face amount by not more than the amount of the withdrawal. We will recompute the contract's basic premiums, maximum surrender charges, tabular values, monthly deductions, and expense charges. The decrease in face amount may also affect the amount of any extra benefit this contract might have. We will send you new contract data pages showing the recomputed values.

(VALA--88)                                                                           Page 13

     We will normally pay any withdrawal within seven days after we receive your request and, if we ask for it, the contract at our Home Office. But we have the right to defer paying the part of the withdrawal that is to come from any variable investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the withdrawal for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year.

     An amount withdrawn may not be repaid, except as a premium subject to charges.

     We will tell you how much you may withdraw if you ask us.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

DIVIDENDS

PARTICIPATION

     We will decide each year what part, if any, of our surplus to credit to this contract as a dividend.

     While the contract is in force other than as extended or reduced paid-up insurance, it will be eligible for such a dividend if the Insured is living. We will credit any such dividend on the anniversary. We do not expect to credit any dividends to this contract.

DIVIDEND OPTIONS

     If you ask us in writing and in a form that meets our needs, you may choose any of these uses for any such dividend:

     1. Cash.--We will pay it to you in cash.

     2. Premium Reduction.--We will use it to reduce any premium then required.  If no premium is then required, we will apply the dividend under dividend option 3.

     3. Dividend Addition.--We will use it at the net single premium rate as of the anniversary to provide a dividend addition, which is paid-up life insurance on the Insured's life.

     4. Accumulation.--We will hold it at interest. The rate will be at least 3% a year. We may use a higher rate.

     If you have not made another choice by 31 days after the anniversary, we will use the dividend as we state under dividend option 3. But if the contract is in default at the end of the last day of grace, we will use the dividend as we state under Contract Value Options. You may surrender any of the above additions or accumulations for their net value if: (1) we have not included them in the net cash value used to provide extended or reduced paid-up insurance; (2) we do not need them as security for contract debt; and (3) we have your request in writing in a form that meets our needs. The surrender value of those additions will not be less than the dividends we used to provide them.

     While the contract is in force as reduced paid-up insurance, it will be eligible for a dividend if the Insured is living. We will credit any such dividend on the anniversary as a paid-up life insurance addition on the Insured's life.

(VALA--88)                                                                           Page 14

DIVIDEND CREDITS DESCRIBED

     The phrase dividend credits means the total of: (1) either the amount or value, as we explain in the next sentence, of any dividend additions under dividend option 3 or on reduced paid-up insurance; (2) any dividends and interest we hold under dividend option 4; and (3) any other dividends we have credited to the contract but have not yet used or paid. For dividend additions, the phrase means the amount of any of those additions when we set the amount of any extended insurance and when we refer to the proceeds that arise from the Insured's death; the phrase means the net value of any of those additions when we refer to loans, net cash values, or the proceeds that arise on surrender.

SETTLEMENT

     We will include any dividend credits in the amount payable when we settle the contract.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

SEPARATE ACCOUNTS

SEPARATE ACCOUNT

     The words separate account, when we use them in this contract without qualification, mean any separate account we establish to support variable life insurance contracts like this one. We list the separate accounts available to you in the contract data pages. We may establish additional separate accounts.  We will notify you within one year if we do so.

     A separate account may or may not be registered with the SEC under the Investment Company Act of 1940. The contract data pages will tell you whether or not a particular separate account is so registered.

VARIABLE INVESTMENT OPTIONS

     A separate account may offer one or more variable investment options. We list them in the contract data pages. We may establish additional variable investment options. We will notify you within one year if we do so.

     Income and realized and unrealized gains and losses from assets in each variable investment option are credited to, or charged against, that variable investment option. This is without regard to income, gains, or losses in our other investment accounts.

SEPARATE ACCOUNT INVESTMENTS

     We may invest the assets of different separate accounts in different ways.  But we will do so only with the consent of the SEC and, where required, of the insurance regulator where this contract is delivered.

     We will always keep assets in the separate accounts with a total value at least equal to the amount of the variable investment options under contracts like this one. To the extent those assets do not exceed that amount, we use them only to support those contracts; we do not use those assets to support any other business we conduct. We may use any excess over that amount in any way we choose.

     We will determine the value of the assets in each separate account and any variable investment option at regular intervals.

(VALA--88)                                                                           Page 15

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

FIXED INVESTMENT OPTIONS

     You may allocate all or part of your invested premium amount to a fixed investment option. Fixed investment options are credited with interest as described under Guaranteed Interest and Excess Interest on page 17.

     We may establish additional fixed investment options. We will notify you within one year if we do so.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

TRANSFERS

     Four transfers may be made in a policy year. There is no charge for these transfers.

     You may transfer amounts into or out of variable investment options of separate accounts registered under the Investment Company Act of 1940 and into the fixed investment options at any time if the contract is not in default or if the contract is being continued under the variable reduced paid-up option. Other transfers are allowed only with our consent.

     In addition, the entire amount in all investment options may be transferred to a fixed investment option at any time within the first two contract years.

     To make a transfer, you must notify us in a form that meets our needs. The transfer will take effect on the date we receive your notice at our Home Office.

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

INSURANCE AMOUNT

     The insurance amount on any date is equal to the greater of: (1) the face amount, and (2) the contract fund, before deduction of any monthly charges due on that date, divided by the net single premium per $1 at the Insured's attained age.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT FUND

CONTRACT FUND DEFINED

     On the contract date the contract fund is equal to the invested premium amounts credited on that date, minus any of the charges described below which may be due on that date. On any day after that the contract fund is equal to what it was on the previous day, plus any invested premium amounts credited that day, plus these items:

     (a) any increase due to investment results in the value of the variable investment options;

     (b) guaranteed interest on that portion of the contract fund that is not in a variable investment option; and

     (c) any excess interest on that portion of the contract fund that is not in a variable investment option;

(VALA--88)                                                                           Page 16

and minus any of these items applicable on that day:

     (d) any decrease due to investment results in the value of the variable investment options;

     (e} a charge against the variable investment options at a rate of not more than 0.00245475% a day (0.90% a year) for mortality and expense risks that we assume;

     (f) any amount charged against the variable investment options for federal or state income taxes;

     (g) any monthly deduction;

     (h) any charge for extra rating class;

     (i) any charge for extra benefits;

     (j) any withdrawals; and

     (k) any surrender charges, administrative charges, or contract debt cancelled that may result from a withdrawal, a decrease in face amount, or a change in status to variable reduced paid-up insurance.

     We describe under Reinstatement on page 11 what the contract fund will be on any reinstatement date. There is no contract fund for a contract in force as extended insurance or fixed reduced paid-up insurance.

GUARANTEED INTEREST

     We will credit interest each day on any portion of the contract fund not in a variable investment option. We will credit 0.01074598% a day, which is equivalent to an effective rate of 4% a year.

EXCESS INTEREST

     We may credit excess interest, that is, interest in addition to the guaranteed interest, on any portion of the contract fund not in a variable investment option. The rate of any excess interest will be determined from time to time and will continue thereafter until a new rate is determined. We may use different rates of excess interest for different portions of the contract fund.  We may from time to time guarantee rates of excess interest on some portions of the contract fund.

CHARGE FOR EXTRA RATING CLASS

     If the contract is not in default past its days of grace and there is an extra charge because of the rating class of the Insured, we will deduct it from the contract fund on each monthly date. The maximum amount of any charge is included in the amount shown in the contract data pages under Schedule of Monthly Deductions from the Contract Fund.

CHARGE FOR EXTRA BENEFITS

     If the contract has extra benefits, we will deduct the charges for them from the contract fund on each monthly date. The maximum amount of any such charges are included in the amount shown in the contract data pages under Schedule of Monthly Deductions from the Contract Fund.

(VALA--88)                                                                           Page 17H

MONTHLY DEDUCTION

     On each monthly date, we will make a deduction. We show the maximum amount of this deduction in the contract data pages. We may deduct less than the maximum amount. The coverage amount (referred to on page 3A) is the difference between the insurance amount and the adjusted contract fund. The adjusted contract fund is equal to the tabular contract fund at the end of the contract year multiplied by 0.98051782 plus the contract fund before deduction of any monthly charges due on the monthly date, minus the tabular contract fund on the monthly date.

     The maximum monthly rates are based on the Insured's sex, rating class and attained age and are shown in the contract data pages. At least once every five years, but not more often than once a year; we will consider the need to change the rates based on actual or anticipated mortality and expense experience under contracts like this one. We will change them only if we do so for all contracts like this one dated in the same year as this one.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT VALUE OPTIONS

BENEFIT AFTER THE GRACE PERIOD

     If the contract is in default beyond its days of grace, we will use any net cash value to keep the contract in force as one of three kinds of insurance:

     1. Extended insurance applies to most contracts.

     2. Fixed reduced paid-up insurance always applies if we issued the contract in a rating class for which we do not provide extended insurance; in this case, the phrase No Extended Insurance will appear under the heading Rating Class in the contract data pages.

     3. Variable reduced paid-up insurance applies if the amount of paid-up insurance would be at least as great as the amount of extended insurance and the contract was issued in a rating class permitting extended insurance.

     We describe each kind of insurance below. Any extra benefit will end as soon as the contract is in default past its days of grace, unless the form that describes the extra benefit states otherwise.

EXTENDED INSURANCE

     This will be term insurance on the Insured's life. We will pay the amount of term insurance if the Insured dies in the term we describe below. Before the end of the term there will be cash values but no loan value.

     The amount of term insurance will be: (1) the insurance amount, plus (2) any dividend credits minus (3) any contract debt. The term is a period of time that will start on the day the contract went into default. The length of the term will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.

(VALA--88)                                                                           Page 18H

     There may be extra days of term insurance. This will occur if, on the day the contract goes into default, the term of extended insurance provided by the net cash value does not exceed 90 days, or the number of days the contract was in force before the default began, if less. The number of extra days will be: (1) 90, or the number of days the contract was in force before the default began, if less, minus (2) the number of days of extended insurance that would be provided by the net cash value if there were no contract debt. The extra days, if any, start on the day after the last day of term insurance provided by the net cash value, if any. If there is no such term insurance, they start on the day the contract goes into default. The term insurance for the extra days has no cash value. There will be no extra days if you replace the extended insurance with reduced paid-up insurance or you surrender the contract before the extra days start.

FIXED REDUCED PAID-UP INSURANCE

     This will be paid-up life insurance on the Insured's life. We will pay the amount of this insurance when the Insured dies. There will be cash values and loan values.

     The amount of this insurance will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.

VARIABLE REDUCED PAID-UP INSURANCE

     This will be paid-up variable life insurance on the Insured's life. We will pay the amount of this insurance when the Insured dies. The death benefit may change from day to day, as we explain below, but if there is no contract debt it will not be less than the minimum guaranteed amount. There will be cash values and loan values.

     The minimum guaranteed amount of insurance will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.  The amount payable in the event of death will be the greater of (a) the minimum guaranteed amount, and (b) the contract fund divided by the net single premium per $1 at the Insured's attained age. In either case the amount will be

adjusted for any contract debt.

     The variable reduced paid-up insurance option will be available only if the minimum guaranteed amount under the option is at least $5,000 and if we issued the contract in a rating class permitting extended insurance.

COMPUTATIONS

     We will make all computations for any of these benefits as of the date the contract goes into default. But we will consider any dividend credits you surrender, any loan you take out or pay back, or any premium payments, withdrawals, or changes in face amount you make in the days of grace.

(VALA--88)                                                                           Page 19

OPTIONAL BENEFIT

     You may choose to replace any extended insurance that has a cash value by fixed reduced paid-up insurance or by variable reduced paid-up insurance if it is available. To make this choice, you must do so in writing in a form that meets our needs not more than three months after the date the contract goes into default. You must also send the contract to us to be endorsed.

CASH VALUE OPTION

     You may surrender this contract for its net cash value. The net cash value at any time is the cash value at that time less any contract debt. To surrender this contract, you must ask us in writing in a form that meets our needs. You must also send the contract to us. Here is how we will compute the net cash value:

     1. If the contract is not in default, the net cash value on any date will be the contract fund, before deduction of any monthly charges due on that date, minus any surrender charge, plus any dividend credits, minus any contract debt.  The Schedule of Maximum Surrender Charges for this contract is in the contract data pages.

     2. If the contract is in default during its days of grace, we will compute the net cash value as of the date the contract went into default. But we will adjust this value for any dividend credits you surrender, any loan you take out or pay back, and any premium payments, withdrawals, or decreases in face amount you make in the days of grace.

     3. If the contract is in default beyond its days of grace, the net cash value will be either: (1) the net value on that date of any extended insurance benefit then in force, or (2) the net value on that date of any reduced paid-up insurance benefit then in force, including any dividend credits, less any contract debt.

     Within thirty days after an anniversary, the net cash value of any extended insurance or fixed reduced paid-up insurance will not be less than the value on that anniversary adjusted for any dividend credits you surrender and any loan you take out or pay back in those thirty days.

     We will usually pay any net cash value within seven days after we receive your request and the contract at our Home Office. But we have the right to defer paying the part of the proceeds that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year.

TABULAR VALUES

     We show tabular contract fund values and tabular cash values at the ends of contract years in the contract data pages.

     If we need to compute tabular values at some time during a contract year, we will count the time since the start of the year. We will let you know the tabular values for other durations if you ask for them.

(VALA--88)                                                                           Page 20

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

LOANS

LOAN REQUIREMENTS

     You may borrow from us on the contract. All these conditions must be met:

     1. The Insured must be living.

     2. The contract must be in force other than as extended insurance.

     3. The contract debt will not be more than the loan value.

     4. As sole security for the loan, you assign the contract to us in a form that meets our needs.

     5. Except to pay premiums on this contract, you may not borrow less than $200 at any one time.

     If there is already contract debt when you borrow from us, we will add the new amount you borrow to that debt.

CONTRACT DEBT

     Contract debt at any time means the loan on the contract, plus the interest we have charged that is not yet due and that we have not yet added to the loan.

     Example 1: Suppose the contract has a loan value of $6,000. A few months ago you borrowed $1,500. By now there is interest of $55 charged but not yet due. The contract debt is now $1,555, which is made up of the $1,500 loan and the $55 interest.

LOAN VALUE

     You may borrow any amount up to the difference between the loan value and any existing contract debt. Except as we state in the next paragraph, the loan value at any time is equal to the sum of (a) 90% of the portion of the cash value that is attributable to the variable investment options, and (b) the balance of the cash value.

     There are two exceptions. The first is that, if the contract is in default, the loan value during the days of grace is what it was on the date of default adjusted for any dividend credits you surrender and any premium payments, withdrawals, or decreases in face amount you make in the days of grace. The second is that, if the contract is in force as fixed reduced paid-up insurance, the loan value is equal to the amount that would grow at interest to equal the cash value on the next anniversary.

     Example 2: Suppose, in example 1, you want to borrow all that you can. We will lend you $4,445 which is the difference between the $6,000 loan value and the $1,555 contract debt. This will increase the contract debt to $6,000. We will add the new amount borrowed to the existing loan and will charge interest on it, too.

INTEREST CHARGE

     You may select either the fixed loan rate option or the variable loan rate option. Both are described below. We show on page 3 the option you have selected. If you request a change from one option to the other and we agree, we will tell you the effective date of the change.

     We charge interest daily on any loan. Interest is due on each contract anniversary, or when the loan is paid back, whichever comes first. If interest is not paid when due, it becomes part of the loan. Then we start to charge interest on it, too.

(VALA--88)                                                                           Page 21

     Example 3: Suppose the contract date is in 1988. Six months before the anniversary in 1997 you borrow $1,600 out of a $4,000 loan value. We charge 5-1/2% a year. Three months later, but still three months before the anniversary, we will have charged about $22 interest. This amount will be a few cents more or less than $22 since some months have more days than others. The interest will not be due until the anniversary unless the loan is paid back sooner. The loan will still be $1,600. The contract debt will be $1,622, since contract debt includes interest charged but not yet due.

     On the anniversary in 1997 we will have charged about $44 interest. The interest will then be due.

     Example 4: Suppose the $44 interest in example 3 was paid on the anniversary. The loan and contract debt each became $7,600 right after the payment.

     Example 5: Suppose the $44 interest in example 3 was not paid on the anniversary. The interest became part of the loan, and we began to charge interest on it, too. The loan and contract debt each became $1,644.

FIXED LOAN RATE OPTION

     The loan interest rate is 5-1/2% a year.

VARIABLE LOAN RATE OPTION

     The loan interest rate is the annual rate we set from time to time. The rate will never be greater than is permitted by law. It will change only on a contract anniversary.

        Before the start of each contract year, we will determine the loan interest rate we can charge for that contract year. To do this, we will first find the rate that is the greater of: (1) The Published Monthly Average (which we describe below) for the calendar month ending two months before the calendar month of the contract anniversary; and (2) 5%.

     If that greater rate is at least 1/2% more than the loan interest rate we had set for the current contract year, we have the right to increase the loan interest rate by at least 1/2%, up to that greater rate. If it is at least 1/2% less, we will decrease the loan interest rate to be no more than the greater rate. We will not change the loan interest rate by less than 1/2%.

     When you make a loan we will tell you the initial interest rate for the loan. We will send you a notice if there is to be an increase in the rate.

     The Published Monthly Average means:

     1. Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc. or any successor to that service; or

     2. If that average is no longer published, a substantially similar average, established by the insurance regulator where this contract is delivered.

REPAYMENT

     All or part of any contract debt may be paid back at any time while the Insured is living. But if there is contract debt at the end of the last day of grace when the contract is in default, it will be deducted from the cash value to determine the net cash value. When we settle the contract, any contract debt is due us. We will make an adjustment so that the proceeds will not include the amount of that debt.

EFFECT OF A LOAN

     When you take a loan, the amount of the loan continues to be part of the contract fund and is credited with interest at the guaranteed rate of 4% a year.  If you have selected the variable loan rate option, we will credit excess interest at an effective rate of not less than the loan interest rate for the contract year less 5%.

     We will reduce the portion of the contract fund allocated to the investment options by the amount you borrow, and by loan interest that becomes part of the loan because it is not paid when due.

(VALA--88)                                                                           Page 22

     On each transaction date, if there is a contract loan outstanding, we will increase the portion of the contract fund in the investment options by interest credits accrued on the loan since the last transaction date. When you repay all or part of a loan we will increase the portion of the contract fund in the investment options by the amount of loan you repay, plus interest credits accrued on the loan since the last transaction date. We will not increase the portion of the contract fund allocated to the investment options by loan interest that is paid before we make it part of the loan.

EXCESS CONTRACT DEBT

     If contract debt ever grows to be equal to or more than the cash value, all the contract's benefits will end 61 days after we mail a notice to you and any assignee we know of. Also, we may send a notice to the Insured's last known address. In the notice we will state the amount that, if paid to us, will keep the contract's benefits from ending for a limited time.

POSTPONEMENT OF LOAN

     We will usually make a loan within seven days after we receive your request at our Home Office. But we have the right to postpone making the part of the loan that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds of a loan for up to six months, unless it will be used to pay premiums on this or other contracts with us.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

SETTLEMENT OPTIONS

PAYEE DEFINED

     In these provisions and under the Automatic Mode of Settlement, the word payee means a person who has a right to receive a settlement under the contract.  Such a person may be the Insured, the owner, a beneficiary, or a contingent payee.

CHOOSING AN OPTION

     A payee may choose an option for all or part of any proceeds or residue that becomes payable to him or her in one sum. We describe residue on page 24.

     In some cases, a payee will need our consent to choose an option. We describe these cases under Conditions.

OPTIONS DESCRIBED

     Here are the options we offer. We may also consent to other arrangements.

OPTION 1 (INSTALMENTS FOR A FIXED PERIOD)

     We will make equal payments for up to 25 years based on the Option 1 Table.  The payments will include interest at an effective rate of 3-1/2% a year. We may credit more interest. If and while we do so, the payments will be larger.

OPTION 2 (LIFE INCOME)

     We will make equal monthly payments for as long as the person on whose life the settlement is based lives, with payments certain for the period chosen. The choices are either ten years (10-Year Certain) or until the sum of the payments equals the amount put under this option (Instalment Refund). The amount of each payment will be based on the Option 2 Table and on the sex and age, on the due date of the first payment, of the person on whose life the settlement is based. But if a choice is made more than two years after the contract proceeds first become payable, we may use the Option 2 rates in ordinary policies we regularly issue, based on United States currency, on the due date of the first payment. On request, we will quote the payment rates in policies we then issue. We must have proof of the date of birth of the person on whose life the settlement is based. The settlement will share in our surplus to the extent and in the way we decide.

(VALA--88)                                                                           Page 23

OPTION 3 (INTEREST PAYMENT)

     We will hold an amount at interest. We will pay interest at an effective rate of at least 3% a year ($30.00 annually, $14.89 semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more interest.

OPTION 4 (INSTALMENTS OF A FIXED AMOUNT)

     We will make equal annual, semi-annual, quarterly or monthly payments if they total at least $90 a year for each $1,000 put under this option. We will credit the unpaid balance with interest at an effective rate of at least 3-1/2% a year. We may credit more interest. If we do so, the balance will be larger.  The final payment will be any balance equal to or less than one payment.

OPTION 5 (NONPARTICIPATING INCOME)

     We will make payments like those of any annuity we then regularly issue that: (1) is based on United States currency; (2) is bought by a single sum; (3) does not provide for dividends; and (4) does not normally provide for deferral of the first payment. The payment will be at least what we would pay under that kind of annuity with its first payment due on its contract date. At least one of the persons on whose life the Option 5 is based must be a payee. If a life income is chosen, we must have proof of the date of birth of any person on whose life the option is based. Option 5 cannot be chosen more than 30 days before the due date of the first payment. On request, we will quote the payment that would

apply for any amount placed under the option at that time.

FIRST PAYMENT DUE DATE

     Unless a different date is stated when the option is chosen: (1) the first payment for Option 3 will be due at the end of the chosen payment interval; and (2) the first payment for any of the other options will be due on the date the option takes effect.

RESIDUE DESCRIBED

     For Options 1 and 2, residue on any date means the then present value of any unpaid payments certain. We will compute it at an effective interest rate of 3-1/2% a year. But we will use the interest rate we used to compute the actual Option 2 payments if they were not based on the table in this contract.

     For Options 3 and 4, residue on any date means any unpaid balance with interest to that date.

     For Option 5, it means the then present value of any unpaid payments certain. We will compute it at the interest rate to which we refer in Option 5.

     For Option 2 and 5, residue does not include the value of any payments that may become due after the certain period.

WITHDRAWAL OF RESIDUE

     Unless otherwise stated when the option is chosen: (1) under Options l and 2, the residue may be withdrawn; and (2) under Options 3 and 4 all, or any part not less than $100, of the residue may be withdrawn. If an Option 3 residue is reduced to less than $1,000, we have the right to pay it in one sum. Under Option 2, withdrawal of the residue will not affect any payments that may become due after the certain period; the value of those payments cannot be withdrawn.  Instead, the payments will start again if they were based on the life of a person who lives past the certain period.

     For Option 5, the residue may not be withdrawn while the payee and any other person on whose life the option is based is living. But, unless otherwise stated. when the option is chosen, after the death of the last of them to die any residue not already paid in one sum may be withdrawn.

(VALA--88)                                                                           Page 24

DESIGNATING CONTINGENT PAYEE(S)

     A payee under an option has the right, unless otherwise stated, to name or change a contingent payee to receive any residue at that payee's death. This may be done only if: (1) the payee has the full right to withdraw the residue, (2) the residue would otherwise have been payable to that payee's estate at death, or (3) a settlement with payments certain is being made in accord with Option 5.

     A payee who has this right may choose, or change the choice of, an option for all or part of the residue. In some cases, the payee will need our consent to choose or change an option. We describe these cases under Conditions.

     Any request to exercise any of these rights must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office. Then the interest of anyone who is being removed will end as of the date of the request, even if the payee who made the request is not living when we file it.

CHANGING OPTIONS

     A payee under Option 1, 3, or 4 may choose another option for any sum that the payee could withdraw on the date the chosen option is to start. That date may be before the date the payee makes the choice only if we consent. In some cases, the payee will need our consent to choose or change an option. We describe these cases next.

CONDITIONS

     Under any of these conditions, our consent is needed for an option to be used for any person:

     1. The person is not a natural person who will be paid in his or her own right.

     2. The person will be paid as assignee.

     3. The amount to be held for the person under Option 3 is less than $1,000.  But we will hold any amount for at least one year in accord with the Automatic Mode of Settlement.

     4. Each payment to the person under the option would be less than $20.

     5. The option is for residue arising other than at (a) the Insured's death, or (b) the death of the beneficiary who was entitled to be paid as of the date of the Insured's death.

     6. The option is for proceeds that arise other than from the Insured's death, and we are settling with an owner or any other person who is not the Insured.

DEATH OF PAYEE

     If a payee under an option dies and if no other distribution is shown, we will pay any residue under that option in one sum to the payee's estate.

(VALA--88)                                                                           Page 25

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

AUTOMATIC MODE OF SETTLEMENT

APPLICABILITY

     These provisions apply to proceeds arising from the Insured's death and payable in one sum to a payee who is a beneficiary. They do not apply to any periodic payment.

INTEREST ON PROCEEDS

     We will hold the proceeds at interest under Option 3 of the Settlement Options provisions. The payee may withdraw the residue. We will pay it promptly on request. We will pay interest annually unless we agree to pay it more often.  We have the right to pay the residue in one sum after one year if: (1) the payee is not a natural person who will be paid in his or her own right; (2) the payee will be paid as assignee; or (3) the original amount we hold under Option 3 for the payee is less than $1,000.

SETTLEMENT AT PAYEE'S DEATH

     If the payee dies and leaves an Option 3 residue, we will honor any contingent payee provision then in effect. If there is none, here is what we will do. We will look to the beneficiary designation of the contract; we will see what other beneficiary(ies), if any, would have been entitled to the portion of the proceeds that produced the Option 3 residue if the Insured had not died until immediately after the payee died. Then we will pay the residue in one sum to such other beneficiary(ies), in accord with that designation. But if, as stated in that designation, payment would be due the estate of someone else, we will instead pay the estate of the payee.

        Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. Jane was living when the Insured died. Jane later died without having chosen an option or naming someone other than Paul and John as contingent payee. If Paul and John are living at Jane's death we owe them the residue. If only one of them is living then, and if the contract called for payment to the survivor of them, we owe him the residue. If neither of them is living then, we owe Jane's estate.

SPENDTHRIFT AND CREDITOR

     A beneficiary or contingent payee may not, at or after the Insured's death, assign, transfer, or encumber any benefit payable. To the extent allowed by law, the benefits will not be subject to the claims of any creditor of any beneficiary or contingent payee.

(VALA--88)                                                                           Page 26

                                 OPTION 1 TABLE

MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY

- --------------------------------------------------------------------------------

              Number of Years        Monthly Payment

- --------------------------------------------------------------------------------

                          1                           $84.65

                          2                            43.05

                          3                            29.19

                          4                            22.27

                          5                            18.12

                          6                            15.35

                          7                            13.38

                          8                            11.90

                          9                            10.75

                          10                            9.83

                          11                            9.09

                          12                            8.46

                          13                            7.94

                          14                            7.49

                          15                            7.10

                          16                            6.76

                          17                            6.47

                          18                            6.20

                          19                            5.97

                          20                            5.75

                          21                            5.56

                          22                            5.39

                          23                            5.24

                          24                            5.09

                          25                            4.96

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

Multiply the monthly amount by 2.989 for quarterly, 5.952 for semi-annual or 11.804 for annual.

- -------------------------------------------------------------------------------------------------------

                                           OPTION 2 TABLE

- -------------------------------------------------------------------------------------------------------

          MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY

- -------------------------------------------------------------------------------------------------------

                     KIND OF LIFE INCOME                                                                                  KIND OF LIFE INCOME

                    -------------------------------                                                                                     -------------------------------

  AGE                      10-Year         Instalment                                                               AGE              10-Year                 Instalment

  LAST                   Certain              Refund                                                                 LAST              Certain                    Refund

BIRTHDAY      Male    Female    Male    Female                                                       BIRTHDAY   Male  Female       Male    Female

- -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

    10                  $3.18   $3.11        $3.17   $3.10                                                                 45                  $4.06   $3.82         $3.99   $3.78

 and under                                                                                                                          46                    4.12     3.86           4.03     3.81

    11                    3.19     3.12          3.18     3.11                                                                 47                    4.17     3.90           4.08     3.85

    12                    3.20     3.13          3.19     3.12                                                                 48                    4.23     3.94           4.13     3.90

    13                    3.21     3.14          3.20     3.13                                                                 49                    4.28     3.99           4.18     3.94

    14                    3.22     3.15          3.21     3.14

                                                                                                                                             50                    4.35     4.04           4.24     3.98

    15                    3.24     3.16          3.23     3.15                                                                 51                    4.41     4.09           4.29     4.03

    16                    3.25     3.17          3.24     3.16                                                                 52                    4.48     4.15           4.35     4.08

    17                    3.27     3.19          3.25     3.18                                                                 53                    4.55     4.21           4.41     4.13

    18                    3.28     3.20          3.27     3.19                                                                 54                    4.62     4.27           4.48     4.19

    19                    3.30     3.21          3.28     3.20

                                                                                                                                             55                    4.70     4.33           4.55     4.24

    20                    3.31     3.22          3.30     3.21                                                                 56                    4.78     4.40           4.62     4.30

    21                    3.33     3.24          3.32     3.23                                                                 57                    4.86     4.47           4.69     4.37

    22                    3.35     3.25          3.33     3.24                                                                 58                    4.95     4.54           4.77     4.43

    23                    3.36     3.26          3.35     3.25                                                                 59                    5.05     4.62           4.86     4.50

    24                    3.38     3.28          3.37     3.27

                                                                                                                                             60                    5.15     4.71           4.94     4.58

    25                    3.40     3.30          3.39     3.29                                                                 61                    5.25     4.79           5.03     4.66

    26                    3.42     3.31          3.41     3.30                                                                 62                    5.36     4.89           5.13     4.74

    27                    3.45     3.33          3.43     3.32                                                                 63                    5.48     4.98           5.23     4.82

    28                    3.47     3.35          3.45     3.34                                                                 64                    5.60     5.09           5.34     4.92

    29                    3.49     3.37          3.47     3.35

                                                                                                                                             65                    5.73     5.20           5.45     5.01

    30                    3.52     3.39          3.49     3.37                                                                 66                    5.87     5.31           5.57     5.11

    31                    3.54     3.41          3.52     3.39                                                                 67                    6.01     5.43           5.70     5.22

    32                    3.57     3.43          3.54     3.41                                                                 68                    6.15     5.56           5.83     5.34

    33                    3.60     3.45          3.57     3.44                                                                 69                    6.30     5.70           5.97     5.46

    34                    3.63     3.47          3.60     3.46

                                                                                                                                             70                    6.46     5.84           6.11     5.58

    35                    3.66     3.50          3.63     3.48                                                                 71                    6.62     5.99           6.27     5.72

    36                    3.69     3.52          3.66     3.50                                                                 72                    6.79     6.15           6.43     5.86

    37                    3.72     3.55          3.69     3.53                                                                 73                    6.96     6.31           6.60     6.01

    38                    3.76     3.58          3.72     3.56                                                                 74                    7.13     6.49           6.78     6.18

    39                    3.80     3.61          3.75     3.55

                                                                                                                                             75                    7.30     6.67           6.97     6.35

    40                    3.84     3.64          3.79     3.61                                                                 76                    7.48     6.85           7.17     6.53

    41                    3.88     3.67          3.82     3.64                                                                 77                    7.66     7.04           7.38     6.72

    42                    3.92     3.70          3.86     3.67                                                                 78                    7.83     7.24           7.60     6.93

    43                    3.97     3.74          3.90     3.71                                                                 79                    8.00     7.44           7.83     7.15

    44                    4.01     3.78          3.94     3.74

                                                                                                                                             80                    8.17     7.64           8.07     7.38

                                                                                                                                             and over

- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(VALA--88)                                                                           Page 27

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

ENDORSEMENTS

(Only we can endorse this contract.)

VOTING RIGHTS

        We are a mutual life insurance company. Our principal office is in Newark, New Jersey, and we are incorporated in that State. By law, we have 24 directors. This includes 16 elected by our policyholders (four each year for four year terms), two of our officers, and six public directors named by New Jersey's Chief Justice.

        The election is held on the first Tuesday in April from 10:00 A.M. to 2:00 P.M. in our office at Prudential Plaza, Newark, N.J. After this contract has been in force for one year, you may vote either in person or by mail. We will send you a ballot if you ask for one. Just write to the Secretary at Prudential Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By law, your request must show your name, address, policy number and date of birth. Only individuals at least 18 years old may vote.

HOME OFFICE LOCATIONS

        When we use the term Home Office, we mean any of these Prudential offices:

Corporate Office, Newark, N.J.                                                                           North Central Home Office,

Minneapolis, Minn.

Eastern Home Office,                                                                South-Central Home Office,

Fort Washington, Pa.                                                                Jacksonville, Fla.

   The Prudential Insurance Company of America,

    By     /s/  SPECIMEN

       ------------------------

              Secretary

COMB 86184-88

(VALA--88)                                                                           Page 28

ENDORSEMENTS

(Only we can endorse this contract

BASIS OF COMPUTATiON

MORTALITY TABLES DESCRIBED

     Except as we state in the next paragraph, (1) we base all net premiums and net values to which we refer in this contract on the Insured's issue age and sex and on the length of time since the contract date; (2) we use the Commissioners 1980 Standard Ordinary Non-Smokers Mortality Table; and (3) we use continuous functions based on age last birthday.

     For extended insurance, we base net premiums and net values on the Commissioners 1980 Non-Smokers Extended Term Insurance Table.

INTEREST RATE

     For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year.

EXCLUSIONS

     When we compute net values, tabular values, reduced paid-up insurance and extended insurance, we exclude the value of any supplementary benefits and any other extra benefits added by rider to this contract.

VALUES AFTER 20 CONTRACT YEARS

     Tabular values not shown on page 4 will be computed using the standard nonforfeiture method and the mortality tables and interest rate we describe above. We show the nonforfeiture factors in the contract data pages.

MINIMUM LEGAL VALUES

     The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required we have given the insurance regulator a detailed statement of how we compute values and benefits.

     The Prudential Insurance Company of America,

                        By  [SPECIMEN SIGNATURE]

                            Secretary

ORD 86185--88

- ----------------------------------------------------===============================================================================

                                              Part 1 Application for Life Insurance to

[LOGO]                                        [X] The Prudential Insurance Company of America

                                              [ ] Pruco Life Insurance Company

                                                  A Subsidiary of The Prudential Insurance Company of America

                                               No. XX XXX XXX

- ------------------------------------------------------------------------------------------------------------

1a. Proposed Insured's name--first, initial, last (Print)              1b. Sex     2a. Date of birth     2b. Age      2c. Place of birth

                                                                                                     M   F            Mo.  Day  Yr.

                                                                                                     [X] [ ]             7      10    52         35         (Name of State)

    JOHN DOE

- ---------------------------------------------------------------------------------------------------------

3. [ ] Single  [X] Married  [ ] Widowed  [ ] Separated  [ ] Divorced   4. Social Security No. XXX/XX/XXXX

- ------------------------------------------------------------------------------------------------------------

5a. Occupation(s)  Clerk                                       5b. Duties        Clerical Duties

- -----------------------------------------------------------------------------------------------------------

6. Address for mail    No.            Street                 City                 State                    Zip

                                  15            Blank Street    (Name of City)   (Name of State)   XXXXX

- ------------------------------------------------------------------------------------------------------------

7a. Kind of policy  Variable Appreciable Life         7b. Initial amount                                   8. Accidental death coverage

             (Level Death Benefit)                                     $50,000 initial amount                           $

 ------------------------------------------------------------------------------------------------------------

9. Beneficiary: (Include name, age and relationship.)   10.List all life insurance on proposed Insured.    Check here if None [ ]

   a. Primary (Class 1):                       Company           Initial               Yr.           Kind                      Medical

      Mary Doe, 35, Spouse                                             amt.            issued    (Indiv., Group)          Yes   No

   ______________________________________                                                                             [ ]   [ ]

   _____________________________________________________________                               [ ]   [ ]

   ______________________________________________________________

    b. Contingent (Class 2) if any:                                                                                                         [ ]   [ ]

       Robert Doe, 10, Son                                 _______________________________                      [ ]   [ ]

___________________________________________________________________                       [ ]   [ ]

- -----------------------------------------------------------------------------------------------------

11. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP)

                                                       Relationship to   Date of birth                       Total life insurance

    Name--first, initial, last                  Sex    proposed Insured  Mo.  Day  Yr.  Age  Place of birth  in all companies

a.                                                          Spouse                                           $

______________________________________________________________________________________________________________

b.                                                                                                           $

______________________________________________________________________________________________________________

c.                                                                                                           $

______________________________________________________________________________________________________________

d.                                                                                                           $

______________________________________________________________________________________________________________

e.                                                                                                           $

_________________________________________________ ____________________________________________________________

f.                                                                                                           $

- ------------------------------------------------------------------------------------------------------------

12. Supplementary benefits and riders:

a. For proposed Insured                               b. For spouse, children, Applicant for AWP

Type and duration of benefit       Amount             Type and duration of benefit                Amount

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

[ ] Option to Purchase Additional Ins. $                           [ ] Applicant's Waiver of Premium benefit

- ------------------------------------------------------------------------------------------------------------

13. State any special request.

- ------------------------------------------------------------------------------------------------------------

14. Has any person named in 1a or 11, within the last 12 months:

    a. been treated by a doctor for or had a known heart attack, stroke or cancer (including melanoma) otherYes   No

       than of the skin? .............................................................................................  [ ]      [X]

    b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? .............................................................................................  [ ]  [X]

- ------------------------------------------------------------------------------------------------------------

15. Premiums payable  [X] Ann.  [ ] Semi-Ann.  [ ] Quar.  [ ] Mon.  [ ] Pay. Budg.  [ ] Pru-Matic  [ ] Gov't. Allot.

- ------------------------------------------------------------------------------------------------------------

16. Amount paid $454.59                                   [ ] None (Must be "None" if either 14a or b is answered "Yes".)

- -----------------------------------------------------------------------------------------------------------

17. Is a medical examination to be made on:                                                Yes   No

    a. the proposed Insured? .........................................................................................  [ ]  [X]

    b. spouse (if proposed for coverage)? .........................................................................................  [ ]  [ ]

- ------------------------------------------------------------------------------------------------------------

18. If 17a or b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until         Yes   No

    the person(s) indicated in 17 have been examined, even if 16 shows that an amount has been paid? .................  [ ]  [ ]

- ------------------------------------------------------------------------------------------------------------

 ORD 84376-86                                     Page 1 (Continued on page 2)

<PAGE>

- -----------------------------------------------------------------------------------------------------------------------------------

Continuation of Part 1 of Application

- -----------------------------------------------------------------------------------------------------------------------------------

19. Will this insurance replace or change any existing insurance or annuity in any company on any person named  in 1a or 11?

If "Yes", give their names, name of company, plan, amount, policy numbers and enclose any  required state replacement form(s).        Yes   No

                                                                                                                                              0;                                                                         [ ]   [X]

----------------------------------------------------------------------------------------

20. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 11 in this or any company?

If "Yes", give amount, details and company.           Yes   No                                                   [ ]   [X]

- -------------------------------------------------------------------------------------

21. Does any person named in 1a or 11 plan to live or travel outside the United States and Canada within the  next 12 months? If "Yes", give country(ies), purpose and duration of trip.  Yes   No

                                                                       [ ]   [X]

- --------------------------------------------------------------------------------------

22. Has any person named in 1a or 11 operated or had any duties aboard an aircraft, glider, balloon, or like device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", complete Aviation Questionnaire.              Yes  No

                                                                                                                                              0;                       [ ]  [X]

----------------------------------------------------------------------------------------

23. Has any person named in 1a or 11 engaged in hazardous sports such as: auto, motorcycle or power boat sports; bobsledding, scuba or skin diving; mountain climbing; parachuting or sky diving; snowmobile racing or any other hazardous sport or hobby within the last 2 years or does any such person plan to do so in the future? If "Yes", complete Avocation Questionnaire.               Yes  No

                                                                                                                                              0;         [ ]  [X]

----------------------------------------------------------------------------------------

24. Has any person (age 15 or over) named in 1a or 11 in the last 3 years:                                       Yes  No

    a. had a driver's license denied, suspended or revoked?         .........................................................                    [ ]  [X]

    b. been convicted of three or more moving violations of any motor vehicle law or of driving while under

       the influence of alcohol or drugs? ...........................................................................  [ ]  [X]

    c. been involved as a driver in 2 or more auto accidents? .......................................................                      [ ]  [X]

    If "Yes", give name, driver's license number and state of issue, type of violation and reason for license

    denial, suspension or revocation.

----------------------------------------------------------------------------------------

25. a. Has the proposed Insured smoked cigarettes within the past twelve months? ..............................   Yes [ ]  No [ ]

    b. Has the spouse (if proposed for coverage) smoked cigarettes within the past twelve months? .............   Yes [ ]  No [ ]

    c. If the proposed Insured or spouse has ever smoked cigarettes, cigars or a pipe, show date(s) last smoked:

                                  Cigarettes                                  Cigars                                       Pipe

Proposed Insured      Mo. _______     Yr. _______     Mo. _______     Yr. _______    Mo._______   Yr. _______

Spouse                      Mo. _______     Yr. _______     Mo. _______     Yr. _______    Mo._______   Yr. _______

- -------------------------------------------------------------------------------------

26. Changes made by the Company. (Not applicable in West Virginia)

----------------------------------------------------------------------------------------

To the best of the knowledge and belief of those who sign below, the statements in this application are complete and true. It is understood that, if any of the above statements (for example, the smoking data) is a material misrepresentation, coverage could be invalidated as a result. The beneficiary named in the application is for insurance payable upon death of (1) the Insured,and (2) an insured child after the death of the Insured if there is no insured spouse.

When the Company gives a Limited Insurance Agreement form, ORD 84376A-86, of the same date as this Part 1, coverage will start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the full first

premium is paid while all persons to be covered are living and their health remains as stated in Parts 1 and 2. If all these take place, coverage will start on the contract date. If the Company makes a change as indicated in 26 it will be approved by acceptance

of the contract. But where the law requires written consent for any change in the application, such change can be made only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the Company's rights or needs.

Ownership: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured, otherwise (2) the proposed Insured. But this is subject to any automatic transfer of ownership stated in the contract.

                      JOHN DOE

                    --------------------------------------------------------------------

                      Signature of Proposed Insured (If age 8 or over)

Dated at (Name of City/State)   on    Aug. 3, 1987

----------------    --------------------------------------------------------------------

          (City/State)                                         Signature of Applicant (If other than proposed Insured --

                                                               If applicant is a firm or corporation, show that company's name

Witness       JOHN ROE                                         By

- -----------------------------------------------------------    -----------------------

(Licensed agent must witness where required by law)            (Signature and title of officer signing for that company)

- -------------------------------------------------------------------------------------

ORD 84376-86

                                                       Page 2

The Prudential Insurance Company of America                      No. xx xxx xxx

A Supplement to the Life Insurance Application for a variable contract in which

John Doe is named as the proposed insured.

- -------------------------------------------------------------------------------

I BELIEVE THIS CONTRACT MEETS MY INSURANCE NEEDS AND FINANCIAL OBJECTIVES. I

ACKNOWLEDGE RECEIPT OF A CURRENT PROSPECTUS FOR THE CONTRACT. I UNDERSTAND THAT

THE CONTRACT'S VALUE AND DEATH BENEFIT MAY VARY DEPENDING ON THE CONTRACT'S

INVESTMENT EXPERIENCE .......................................   YES [X]  NO [ ]

     NOTE: Upon request, we will furnish illustrations of benefits, including death benefits and cash values, for (a) the variable life insurance contract applied for and (b) a fixed benefit life insurance contract for the same premium

Date                                    Signature of Applicant

            Aug. 3, 1987                  JOHN DOE

- --------------------------------        -----------------------------------

 ORD 86189--88

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

ENDORSEMENTS

(Only we can endorse this contract

(VALA--88)                                                                           Page 29

- --------------------------------------------------------------------------------

     Modified Premium Variable whole Life Insurance Policy. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime.  Provisions for optional additional premiums. Cash values reflect premium payments, investment results and charges. Death benefit guaranteed if scheduled premiums duly paid and no contract debt or withdrawals. Increase in face amount at attained age 21 if contract issued at age 14 or lower. Eligible for annual dividends as stated under Dividends.

VALA—88                                                                           Page 30

EXHIBIT 26(d)(i)(b)

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                                                           The Prudential Insurance Company of America

[Prudential Logo]                                                                                                            a mutual life insurance company

                                                                                                           Prudential Plaza, Newark, New Jersey 07101

               Insured   JOHN DOE                                                                                                                     XX XXX XXX   Policy Number

                                                                                                           SEP 10, 1988   Contract Date

           Face Amount   $50,000--

        Premium Period   LIFE

                Agency   R-NK 1

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

     We will pay the beneficiary the proceeds of this contract promptly if we receive due proof that the Insured died. We make this promise subject to all the provisions of the contract.

     The proceeds arising from the Insured's death will be the insurance amount,plus the amount of any extra benefit arising from the Insured's death (unless the contract is in default or there is contract debt). The insurance amount may be fixed or variable depending on the payment of premiums, the investment experience of the variable investment options, any excess interest credited to the fixed investment options, and the charges made. But it will not be less than the face amount. (We describe the insurance amount on page 16.)

     The cash value may increase or decrease daily depending on the payment of premiums, the investment experience of the variable investment options, any excess interest credited to the fixed investment options, and the charges made.  There is no guaranteed minimum.

     We specify a schedule of premiums. Additional premiums may be paid at your option subject to the limitations in the contract.

     Please read this contract with care. A summary is on page 5. If there is ever a question about it, or if there is a claim, just see one of our agents or get in touch with one of our offices.

        Right to Cancel contract.--You may return this contract to us within: (1) 10 days after you get it, or (2) 45 days after Part 1 of the application was signed, or (3) 10 days after we mail or deliver to you any withdrawal right notice required by the Securities and Exchange Commission, whichever is latest.  All you have to do is take the contract or mail it to one of our offices or to the agent who sold it to you. It will be canceled from the start and we will promptly give you the value of your contract fund on the date you return the contract to us. We will also give back any charges we made in accord with this contract.

Signed for Prudential.

        /s/  SPECIMEN                             /s/  SPECIMEN

        ------------------------                 -------------------------

            Secretary                                  President

     Modified Premium Variable Whole Life Insurance Policy with variable insurance amount. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums.  Benefits reflect premium payments, investment results and charges. Death benefit guaranteed if scheduled premiums duly paid and no contract debt or withdrawals.  Increase in face amount at attained age 21 if contract issued at age 14 or lower. Eligible for annual dividends as stated under Dividends.

- --------------------------------------------------------------------------------

VALB--88

GUIDE TO CONTENTS

                                                                                                                                              0;        Page

Contract Data ..............................................................................................................................  3

  List of Contract Minimums;

  List of Supplementary Benefits, if any; Summary

  of Face Amount; Schedule of Premiums; Schedule

  of Expense Charges from Premium Payments; Schedule

  of Monthly Deductions from the Contract Fund;

  Schedule of Maximum Surrender Charges;

  List of Subaccounts and Portfolios; List of fixed

  Account Options; Schedule of Initial Allocation of

  New Premimums;

Tabular Values ...........................................................................................................................  4

Contract Summary .....................................................................................................................  5

  Table of Basic Amounts

General Provisions......................................................................................................................  6

  Definitions; The Contract; Contract

  Modifications; Ownership and Control;

  Suicide Exclusion; Currency; Misstatement

  of Age or Sex; Incontestability; Assignment;

  Annual Report; Increase in Face Amount

  at Age 21 for Contracts Issued at Age 14

  or Lower; Payment of Death Claim; Change in Plan

Beneficiary.................................................................................................................................  8

Premium Payment and Reinstatement......................................................................................  8

  Payment of Premiums; Basic Premiums; Charge

  for Applicable Taxes; Scheduled Premiums;

  Unscheduled Premiums; Invested Premium

  Amount; Contract Change Date(s); Allocations;

  Premium Account; Default; Grace Period;

  Reinstatement

Face Amount Changes and Withdrawals ................................................................................ 12

  Face Amount; Increase in Face.

  Amount; Decrease in Face Amount;

  Withdrawals

Dividends ............................................................................................................................... 14

  Participation; Dividend Options; Dividend Credits

  Described; Settlement

Separate Account .................................................................................................................. 15

  Separate Account; Variable Investment Options;

  Separate Account Investments;

Fixed Investment Options ...................................................................................................... 16

Transfers ................................................................................................................................ 16

Insurance Amount .................................................................................................................. 16

Contract Fund ........................................................................................................................ 16

  Contract Fund Defined; Guaranteed Interest;

  Excess Interest; Charge for Extra Rating Class;

  Charge for Extra Benefits; Monthly Deduction

Contract Value Options ......................................................................................................... 18

  Benefit After the Grace Period; Extended

  Insurance; Fixed Reduced Paid-up

  Insurance; Variable Reduced Paid-up Insurance;

  Computations; Optional Benefit; Cash Value

  Option; Tabular Values

Loans ..................................................................................................................................... 20

  Loan Requirements; Contract Debt; Loan

  Value; Interest Charge; Fixed Loan Rate Option;

  Variable Loan Rate Option; Repayment; Effect

  of a Loan; Excess Contract Debt; Postponement

  of Loan

Settlement Options ................................................................................................................ 22

  Payee Defined; Choosing an Option;

  Options Described; First Payment Due Date;

  Residue Described;

  Withdrawal of Residue; Designating

  Contingent Payee(s);

  Changing Options; Conditions;

  Death of Payee

Automatic Mode of Settlement ............................................................................................. 24

   Applicability; Interest on Proceeds;

   Settlement at Payee's Death; Spendthrift and

   Creditor

Income Tables ...................................................................................................................... 25

Voting Rights ........................................................................................................................ 26

Home Office Location ........................................................................................................... 26

    Any supplementary benefits and a copy of the application follow page 26.

(VALB--88)                                                                           Page 2H

CONTRACT DATA

Insured's Sex and Issue Age                                                          M-35

                    Insured                                                                           JOHN DOE      XX XXX XXX         Policy Number

                Face Amount                                                                    $50,000--     SEP 10, 1988       Contract Date

             Premium Period                                                                    LIFE

                     Agency                                                                         R-NK 1

                Beneficiary                                                                        CLASS 1     MARY DOE, WIFE

                                                                                                            CLASS 2     ROBERT DOE, SON

  Fixed Loan Interest Rate

LIST OF CONTRACT MINIMUMS

The minimum unscheduled premium is $25.

The minimum increase in face amount is $25,000.

The minimum decrease in face amount is $10,000.

The minimum face amount is $50,000.

***** END OF LIST *****

LIST OF SUPPLEMENTARY BENEFITS

***** NONE *****

SUMMARY OF FACE AMOUNT

                                          EFFECTIVE                                           RATING                                           CONTRACT CHANGE

           AMOUNT            DATE                                                     CLASS                                              DATE

Initial    $50,000--            SEP 10, 1988                                           NONSMOKER                                 SEP 10, 2018

***** END OF SUMMARY *****

SCHEDULE OF PREMIUMS

Scheduled premiums are equal to the basic premium plus the charge for applicable taxes. The initial scheduled premium due on the contract date is $454.59. Due dates of scheduled premiums occur on the contract date and at intervals of 12 months after that date.

              Basic Premiums are                                             $ 445.50 each

              Changing on SEP 10, 2018 to                          $ 2299.00 each

***** END OF SCHEDULE *****

VAL—88                                                                           PAGE 3

POLICY NO. XX XXX XXX

SCHEDULE OF DEDUCTIONS FROM PREMIUM PAYMENTS

From each premium paid, we first deduct a charge for applicable taxes (other than taxes discussed on page 17) of 2%. We reserve the right to change this percentage to conform to changes in the law or if the insured changes residence.

From the remainder, we deduct a charge for payment processing of up to $2.00.

After deduction of this amount, the balance is the invested premium amount.

***** END OF SCHEDULE *****

SCHEDULE OF MONTHLY DEDUCTIONS FROM THE CONTRACT FUND

The maximum monthly deduction, which provides for administration expenses, sales expenses, the guaranteed minimum death benefit and the expected cost of mortality, is equal to:

     (a)  $6.56, changing on Sep 10, 2018 to $15.83, plus

     (b)  an amount equal to the maximum monthly rate (see Table of Maximum Monthly Rates) multiplied by the coverage amount (described on page 18).

***** END OF SCHEDULE *****

***** SCHEDULE OF OTHER CHARGES *****

There is a charge of up to $15 for any withdrawal or decrease in face amount.

***** END OF SCHEDULE *****

SCHEDULE OF MAXIMUM SURRENDER CHARGES

For full surrender at the beginning of the contract year indicated, the maximum charge we will deduct from the contract fund is shown below. For surrender at other times, the amount of the charge will reflect the number of days since the beginning of the contract year. For any decrease in face amount, we will deduct a proportionate part of the surrender charge.

 Year of                                    Surrender                           Year of                                Surrender

Surrender                                Charge                                Surrender                           Charge

- ---------                                  ---------                                    ---------                                ---------

   1                                           457.00                                           6                                       457.00

   2                                           457.00                                           7                                       365.50

   3                                           457.00                                           8                                       274.00

   4                                           457.00                                           9                                       183.00

   5                                           457.00                                           10                                      91.50

                                                                                                      11  And Later                   Zero

***** END OF SCHEDULE *****

VAL--88(H)                                                                            PAGE 3A

POLICY NO. XX XXX XXX

                    TABLE OF MAXIMUM MONTHLY RATES PER $1000

                       FOR MONTHLY DEDUCTION (SEE PAGE 18)

  Insured's                       Maximum       Insured's              Maximum

Attained Age                  Rate               Attained Age        Rate

- ------------                       -------              ------------               ---------

      35                                0.1439                   68                  2.4893

      36                                0.1514                   69                  2.7438

      37                                0.1614                   70                  3.0317

      38                                0.1722                   71                  3.3603

      39                                0.1839                   72                  3.7397

      40                                0.1980                   73                  4.1690

      41                                0.2130                   74                  4.6407

      42                                0.2288                   75                  5.1449

      43                                0.2463                   76                  5.6774

      44                                0.2654                   77                  6.2340

      45                                0.2870                   78                  6.8180

      46                                0.3103                   79                  7.4478

      47                                0.3353                   80                  8.1434

      48                                0.3627                   81                  8.9229

      49                                0.3927                   82                  9.8023

      50                                0.4268                   83                 10.7774

      51                                0.4659                   84                 11.8290

      52                                0.5108                   85                 12.9330

      53                                0.5624                   86                 14.0753

      54                                0.6198                   87                 15.2384

      55                                0.6839                   88                 16.4173

      56                                0.7538                   89                 17.6287

      57                                0.8278                   90                 18.8899

      58                                0.9102                   91                 20.2303

      59                                1.0025                   92                 21.6995

      60                                1.1057                   93                 23.4408

      61                                1.2205                   94                 25.7770

      62                                1.3528                   95                 29.2738

      63                                1.5025                   96                 35.0252

      64                                1.6689                   97                 45.0097

      65                                1.8511                   98                 61.9945

      66                                2.0483                   99                 83.1973

      67                                2.2596

VAL--88(H)                                                                PAGE 3B

POLICY NO. XX XXX XXX

LIST OF INVESTMENT OPTIONS

I. THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

This account is registered with the SEC under the Investment Company Act of 1940. Each investment option of this account invests in a specific portfolio of The Prudential Series Fund. The fund is registered with the SEC under the Investment Company Act of 1940 as an open-end diversified management investment company. The fund has several portfolios. We show below the available investment options and the fund portfolios they invest in.

              INVESTMENT                                            FUND

               OPTION                                                      PORTFOLIO

              ----------                                                      ---------

           Money Market                                           Money Market

           Bond                                                            Bond

           Common Stock                                           Common Stock

           Aggressively Managed Flx                     Aggressively Managed Flx

           Conservative Managed Flx                      Conservative Managed Flx

           High Yield Bond                                        High Yield Bond

II. THE PRUDENTIAL REAL PROPERTY ACCOUNT

This account is not registered with the SEC under the Investment Company Act of 1940. The following investment option is available.

                                   INVESTMENT

                                     OPTION

                                    --------

                                   Real Estate

III. FIXED INVESTMENT OPTIONS

The fixed investment options are funded by the general account of the Company. The following investment option is available.

                                   INVESTMENT

                                     OPTION

                                    --------

                               Fixed Interest Rate

********* END OF LIST *********

           SCHEDULE OF INITIAL ALLOCATION OF INVESTED PREMIUM AMOUNTS

                      Money Market                                                                20%

                      Common Stock                                                                60%

                      Fixed Interest Rate                                                          20%

********* END OF SCHEDULE *********

VAL—88                                                                           PAGE 3C

POLICY NO. XX XXX XXX

TABULAR VALUES

Tabular values are calculated based on the scheduled premiums, guaranteed charges, assumed rate of return, no contract debt and no dividends credited. Actual values may be different than the tabular amounts shown below.

                                                    Tabular

                                                                                   Extended

    End of                  Tabular                                                            Tabular                  Tabular                          Insurance*

   Contract                 Contract                                                         Cash                       Reduced                       ---------------

     Year                     Fund                                                                 Value                     Paid-up                       Years      Days

                                                                                                                                          Insurance

 --------                 --------                                                                -------                        - ---------                                 -----      ----

      1                      292.00                                                                0.00                                    0.00                              0        0

      2                      591.50                                                                134.50                                531.00              
60;           1        7

      3                      898.00                                                                441.00                                1682.00              &# 160;         3       58

      4                     1210.50                                                                753.50                                2779.00               & #160;       4       360

      5                     1529.00                                                                1072.00                                3824.00                      6       170

      6                     1853.0                                                                1487.00                                5132.00               & #160;       8        41

      7                     2182.00                                                                1908.00                                6369.00                      9       151

      8                     2515.50                                                                2332.50                                7533.00                      10154

      9                     2853.00                                                                2761.50                                8632.00                      1163

     10                     3194.00                                                                3194.00                                9663.00                 ;    11262

     11                     3537.50                                                                3537.50                                10361.00                0;  11316

     12                     3882.50                                                                3882.50                                11012.00                0;  11338

     13                     4229.00                                                                4229.00                                11617.00                0;  11329

     14                     4575.00                                                                4575.00                                12174.00                0;  11294

     15                     4919.50                                                                4919.50                                12684.00                0;  11236

     16                     5261.00                                                                5261.00                                13146.00                0;  11158

     17                     5596.00                                                                5596.00                                13556.00                0;  1162

     18                     5922.00                                                                5922.00                                13913.00                0;  10314

     19                     6235.00                                                                6235.00                                14211.00                0;  10185

     20                     6532.00                                                                6532.00                                14449.00                0;  1046

   ATTAINED

     AGE

   --------

     60                      7635.00                                                                7635.00                                14635.00               0;    7     290

     62                      7796.50                                                                7796.50                                14158.00               0;    6     263

     65                      7500.00                                                                7500.00                                12612.00                   5         2

*There may be extra days of term insurance. We explain this under the Extended Insurance provision.

                  Nonforfeiture Factors, applicable during premium period, per $1,000 of initial face amount

                  Contract Years 1 through 30                  7.45334

                  Contract Years 31 and later                 43.02598

VAL—88                                                                           PAGE 4

- -------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT SUMMARY

     This life insurance contract will provide benefits while the Insured is living and upon the Insured's death as described below.

     Unless we endorse the contract to say otherwise, it gives you the following rights, among others, subject to certain limitations and requirements:

·   You may change the beneficiary.

·   You may borrow on it up to its loan value.

·   You may change the allocation of future invested premium amounts among the investment options.

·   You may transfer amounts among the investment options.

·   You may change the face amount.

·   You may withdraw a portion of the contract's value.

·   You may surrender the contract. If you do, the proceeds will be the net cash value.

     To compute the proceeds payable upon the Insured's death, we start with a basic amount and adjust that amount as described in the table below.

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

TABLE OF BASIC AMOUNTS

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

 If the contract is in force:                                 Then the basic amount is:                       And we adjust the basic amount  for:

- ---------------------------------------------------------------------------------------------------------------------------------------------------------------

and not in default past its days                      the insurance amount (see page                      contract debt (see page 20),

of grace                                                               16) plus the amount of any extra                     dividend credits (see page

                                                                             benefits arising from the                                   14), and any charges due in

                                                                             Insured's death                                                   the days of grace (see page 11).

- ----------------------------------------------------------------------------------------------------------------------------------------------------------------

as reduced paid-up insurance                         the amount of reduced paid-up                        contract debt and dividend

(see pages 18 & 19)                                           insurance (see pages 18 & 19)                         credits since the reduced

                                                                                                                                              0;              paid-up insurance began.

- ----------------------------------------------------------------------------------------------------------------------------------------------------------------

as extended insurance (see                              the amount of term insurance, if                       nothing.

page 18)                                                                the Insured dies in the term (see

                                                                              page 18); otherwise zero

- -------------------------------------------------------------------------------------------------------------------------------------------------------------------

     The contract may have extra benefits that we call supplementary benefits.  If it does, we list them under Supplementary Benefits on the contract data pages and describe them after page 26. The contract may have other extra benefits. If it does, we add them by rider. Any extra benefit ends as soon as the contract is in default past its days of grace, unless the form that describes it states otherwise.

     Proceeds need not be taken in one sum. For instance, on surrender, you may be able to choose a settlement option to provide retirement income or for some other purpose. If a death benefit becomes payable the beneficiary may also be able to make such a choice. We will automatically pay interest under Option 3 from the date of death on any death benefit to which no other manner of payment applies. This will be automatic as we state on page 24.

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

(VALB--88)                                                                           Page 5

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

GENERAL PROVISIONS

DEFINITIONS

     We define here some of the words and phrases used all through this contract. We expIain others, not defined here, in other parts of the text.

     We, Our, Us and Company.--Prudential.

     You and Your.--The owner of the contract.

     Insured.--The person named as the Insured on the first page. He or she need not be the owner.

     Example: Suppose we issue a contract on the life of your spouse. You applied for it and named no one else as owner. Your spouse is the Insured and you are the owner.

     SEC.--The Securities and Exchange Commission.

     Issue Date.--The contract date.

     Monthly Date.--The contract date and the same day as the contract date in each later month.

     Example: If the contract date is May 9, 1988, the monthly dates are each May 9, June 9, July 9 and so on.

     Anniversary or Contract Anniversary.--The same day and month as the contract date in each later year.

     Example: If the contract date is May 9, 1988, the first anniversary is May 9, 1989. The second is May 9, 1990, and so on.

     Contract Year.--A year that starts on the contract date or on an anniversary.

     Example: If the contract date is May 9, 1988, the first contract year starts then and ends on May 8, 1989. The second starts on May 9, 1989 and ends on May 8, 1990, and so on.

     Contract Month.--A month that starts on a monthly date.

     Example: If May 9, 1988 is a monthly date, a contract month starts then and ends on June 8, 1988. The next contract month starts on June 9, 1988 and ends on July 8, 1988, and so on.

     Attained Age.--The Insured's attained age at any time is the issue age plus the length of time since the contract date. You will find the issue age near the top of page 3.

     Assumed Rate of Return.--The assumed rate of return is an effective rate of 4% a year. This is the same as 0.01074598% a day compounded daily.

THE CONTRACT

     This policy, and the attached copy of the initial application, together with copies of any subsequent applications to change the policy, and any additional contract data pages added to the policy, form the whole contract. We assume that all statements in an application are made to the best of the knowledge and belief of the person(s) who make them; in the absence of fraud they are deemed to be representations and not warranties. We rely on those statements when we issue or change the contract. We will not use any statement, unless made in an application, to try to void the contract or to deny a claim.

CONTRACT MODIFICATIONS

     Only a Prudential officer with the rank or title of vice president or above may agree to modify this contract, and then only in writing.

OWNERSHIP AND CONTROL

     Unless we endorse this contract to say otherwise: (1) the owner of the contract is the Insured; and (2) while the Insured is living the owner alone is entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us.

(VALA--88)                                                                           Page 6

SUICIDE EXCLUSION

     If the Insured, whether sane or insane, dies by suicide within two years from the issue date, we will pay no more under this contract than the sum of the premiums paid.

     Also, for any increase in the face amount, if the Insured, whether sane or insane, dies by suicide within two years from the effective date of the increase, we will pay, as to the increase in amount, no more than the sum of the scheduled premiums that were due for the increase.

CURRENCY

     Any money we pay, or that is paid to us, must be in United States currency.  Any amount we owe will be payable at our Corporate Office.

MISSTATEMENT OF AGE OR SEX

     If the Insured's stated age or sex or both are not correct, we will adjust each benefit and any amount to be paid to reflect the correct age and sex.  Any death benefit will be based on what item (b) of the most recent monthly deduction (see pages 3A and 18), would have provided at the correct age and sex. Where required, we have given the insurance regulator a detailed statement of how we will make these adjustments.

     The Schedule of Premiums may show that basic premiums change or stop on a certain date. We may have used that date because the Insured would attain a certain age on that date. If we find that the issue age was wrong, we will correct that date and, if necessary, the amount of any changed premiums.

INCONTESTABILITY

     Except as we state in the next sentence, we will not contest this contract after it has been in force during the Insured's lifetime for two years from the issue date. There are two exceptions: (1) non-payment of enough premium to provide the required charges; and (2) any change in the contract that requires our approval and that would increase our liability. For any such change, we will not contest the change after it has been in effect during the Insured's lifetime for two years from the date it takes effect.

ASSIGNMENT

     We will not be deemed to know of an assignment unless we receive it, or a copy of it, at our Home Office. We are not obliged to see that an assignment is valid or sufficient. This contract may not be assigned to another insurance company or to any employee benefit plan without our consent. This contract may not be assigned if such assignment would violate any federal, state, or local law or regulation prohibiting sex distinct rates for insurance.

ANNUAL REPORT

     Each year we will send you a report. It will show: (1) the current death benefit; (2) the amount of the contract fund in each investment option; (3) the net cash value; (4) premiums paid, investment results, and charges deducted since the last report; (5) any withdrawals since the last report; and (6) any contract debt and the interest on the debt for the prior year. The report will also include any other data that may be currently required where this contract is delivered. No report will be sent if this contract is being continued under fixed reduced paid-up insurance or extended term insurance.

     You may ask for a similar report at some other time during the year. Or you may request from time to time a report projecting results under your contract on the basis of premium payment assumptions and assumed investment results. We have the right to make a reasonable charge for reports such as these that you ask for and to limit the scope and frequency of such requests.

INCREASE IN FACE AMOUNT AT AGE 21 FOR CONTRACTS ISSUED AT AGE 14 OR LOWER

     If this contract was issued at age 14 or lower, it shows on page 3 an increase in face amount at attained age 21 which applies if the contract is not then in default beyond its days of grace. In that case, any references in the contract to face amount or death benefit which apply at or after attained age 21 will be based on the increased face amount, unless otherwise stated.

PAYMENT OF DEATH CLAIM

     If we settle this contract in one sum as a death claim, we will usually pay the proceeds within seven days after we receive at our Home Office proof of death and any other information we need to pay the claim. But we have the right to postpone paying the part of the proceeds in excess of the face amount that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying the remainder of any excess for up to six months.

CHANGE IN PLAN

     You may be able to have this contract changed to another plan of life insurance either with us or with a subsidiary of ours. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

(VALA--88)                                                                           Page 7H

- --------------------------------------------------------------------------------------------------------------------------------------------------------

BENEFICIARY

     You may designate or change a beneficiary. Your request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office; this will be after you send the contract to us to be endorsed, if we ask you to do so. Then any previous beneficiary's interest will end as of the date of the request. It will end then even if the Insured is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know.

     When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. To show priority, we may use numbered classes, so that the class with first priority is called class 1, the class with next priority is called class 2, and so on. When we use numbered classes, these statements apply to beneficiaries unless the form states otherwise:

     1. One who survives the Insured will have the right to be paid only if no one in a prior class survives the Insured.

     2. One who has the right to be paid will be the only one paid if no one else in the same class survives the Insured.

     3. Two or more in the same class who have the right to be paid will be paid in equal shares.

     4. If none survives the Insured, we will pay in one sum to the Insured's estate.

     Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. We owe Jane the proceeds if she is living at the Insured's death. We owe Paul and John the proceeds if they are living then but Jane is not. But if only one of them is living, we owe him the proceeds. If none of them is living we owe the Insured's estate.

     Beneficiaries who do not have a right to be paid under these terms may still have a right to be paid under the Automatic Mode of Settlement.

     Before we make a payment, we have the right to decide what proof we need of the identity, age or any other facts about any persons designated as beneficiaries. If beneficiaries are not designated by name and we make payment(s) based on that proof, we will not have to make the payment(s) again.

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

PREMIUM PAYMENT AND REINSTATEMENT

PAYMENT OF PREMIUMS

     Premiums may be paid at our Home Office or to any of our authorized agents.  If we are asked to do so, we will give a signed receipt.

     Premium payments will in most cases be credited as of the date of receipt at our Home Office. In the following cases, part or all of a premium payment will be credited as of a date other than the date of receipt:

     1. If the first premium payment is received after the contract date, the scheduled portion will be credited as of the contract date.

(VALA--88)                                                                           Page 8

     2. If the first premium payment is received before the contract date, it will be credited as of the contract date.

     3. If a premium payment is received during the 61-day period after a scheduled premium due date and the premium account is negative by no more than the scheduled premium then due, the portion of the payment needed to bring the premium account up to zero will be credited to the premium account, but not the contract fund, as of the due date.

     4. If the contract is in default and premium payments are received during the days of grace while the contract is in default, we will credit to the contract fund and the premium account those parts of the premium payments needed to end the default status as of the applicable monthly dates.

BASIC PREMIUMS

     We show the amount and frequency of the basic premiums in the Schedule of Premiums in the contract data pages. An increase or decrease in the face amount will change the basic premiums.

CHARGE FOR APPLICABLE TAXES

     The charge for applicable taxes is a percentage of each premium paid that we set from time to time. It will change only on a contract anniversary.

     At least sixty days before the start of each contract year, we will determine the rate we will charge for that contract year. The rate will be based on the rates of any federal, state or local premium taxes that apply at the last known address of the Insured.

SCHEDULED PREMIUMS

     The scheduled premiums are equal to the basic premiums plus the charge for applicable taxes. The scheduled premiums will change if the basic premiums change or the charge for applicable taxes changes. We show the amount of the first scheduled premium in the Schedule of Premiums. It is due on the contract date. There is no insurance under this contract unless an amount at least equal to the first scheduled premium is paid.

     The scheduled premium is the minimum premium required, at the frequency chosen, to continue the contract in full force if you pay all scheduled premiums when due, you make no withdrawals, and any contract debt does not exceed the cash value.

     If you wish to pay, on a regular basis, premiums that are higher than the scheduled premiums, we will bill you for the higher amount you choose. Or if you wish, you may from time to time make a premium payment smaller than the scheduled amount, subject to the minimum premium amount shown on page 3.

     If scheduled premiums that are due are not paid, or if smaller payments are made, the contract may then or at some future time go into default. Payment of less than the scheduled premium increases the risk that the contract will end if investment results are not favorable. The conditions under which the contract will be in default are described below.

UNSCHEDULED PREMIUMS

     Except as we state in the next paragraph, unscheduled premiums may be paid at any time during the Insured's lifetime as long as the contract is not in default beyond its days of grace. We show on page 3 the minimum premium we will accept.

     We have the right to limit unscheduled premiums to a total of $10,000 in any contract year. We also have the right to refuse any payment that increases the insurance amount by more than it increases the contract fund.

INVESTED PREMIUM AMOUNT

     This is the portion of each premium paid that we will add to the premium account and the contract fund. It is equal to the premium paid minus the charges described in the contract data pages under Schedule of Deductions from Premium Payments.

CONTRACT CHANGE DATE(S)

     We show the contract change date(s) in the contract data pages. We also show in the Schedule of Premiums on these pages that the amount of each basic premium will change on each contract change date and what the new premium will be. However, when a contract change date arrives we will compute a new premium amount to be used in calculating the premium account. The new premium that we compute will be no greater than the new premium for that date which we show in the contract data pages. In addition, if the premium account is less than zero, we will set the premium account to zero.

(VALA--88)                                                                           Page 9

     The Schedule of Premiums may show that the premium changes at times other than contract change dates. This may occur, for example, with a contract issued with extra benefits or in an extra rating class.

ALLOCATIONS

     You may allocate all or a part of your invested premium amount to one or more of the investment options listed in the contract data pages. You may choose to allocate nothing to a particular investment option. But any allocation you make must be at least 10%; you may not choose a fractional percent.

     Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or any percentage that is not a whole number. The total for all investment options must be 100%.

     The initial allocation of invested premium amounts is shown in the contract data pages. You may change the allocation for future invested premium amounts at any time if the contract is not in default. To do so, you must notify us in a form that meets our needs. The change will take effect on the date we receive your notice at our Home Office.

     A premium might be paid when the contract fund is less than zero. In that case we first use as much of the invested premium amount as we need to bring the fund up to zero. We will then allocate any remainder of the invested premium amount in accord with your most recent request.

PREMIUM ACCOUNT

     On the contract date, the premium account is equal to the invested premium amount credited on that date, minus the basic premium then due, plus the charge for payment processing. On any other day, the premium account is equal to:

     1. what it was on the prior day; plus

     2. if the premium account was greater than zero on the prior day, interest on the excess at 4% a year; minus

     3. if the premium account was less than zero on the prior day, interest on the deficit at 4% a year; plus

     4. any invested premium amount credited on that day; minus

     5. any basic premium due on that day less the charge for payment processing; minus

     6. any withdrawals on that day.

     If we credit a part of a payment as of an earlier date, as we describe under Payment of Premiums, the premium account for all days from the crediting date to the date of receipt will be recalculated.

DEFAULT

     Unless the contract is already in the grace period, we will determine on each monthly date whether the contract is in default. To do so, we will first deduct any applicable charges from the contract fund and add any applicable credits to it (the contract fund is described on page 16). We will then compute the amount which will grow to equal the tabular contract fund on the next monthly date if, during the current contract month: (1) any investment results are at the assumed rate and (2) we receive no premiums or loan repayments, make no loans and grant no withdrawals. We will compare this amount to the contract fund.

     If this amount is more than the contract fund, the difference is the fund deficit. In this case the contract is in default if the premium account is also less than zero.

(VALA--88)                                                                           Page 10

GRACE PERIOD

     The days of grace begin on any monthly date, other than the contract date, on which the contract goes into default. Within 30 days after any default we will send you a notice that your contract is in default. We will indicate the minimum payment required to bring the contract out of default and the length of the grace period for making that payment.

     We grant at least 61 days of grace from the date we mail you a notice of default. During the days of grace we will continue to accept premiums and make the charges we have set.

     If at any time during the days of grace we have received payments that in total are at least equal to the lesser of (a) the sum of the fund deficit on the date of default and any additional fund deficits on any subsequent monthly dates since the date of default, and (b) the sum of the amount by which the premium account is negative on the date of default and any scheduled premiums due since the date of default, the default will end.

     If at any time during the days of grace we have received payments that in total are at least equal to the lesser of (a) the fund deficit on the date of default, and (b) the amount by which the premium account is negative on the date of default, but that are insufficient to end the default, here is what we will do. We will determine a new default date which is the monthly date after the old default date. We will grant at least 61 days of grace from the new default date.

     If the contract is still in default when the days of grace are over, it will end and have no value, except as we state under Contract Value Options (see page 18). Any premiums paid during the days of grace will remain in the contract fund.

     The Insured might die in the days of grace while the contract is in default. If so, the amount needed to bring the contract out of default is due us. We will make an adjustment so that the proceeds will not include that amount.

     This contract might have an extra benefit that insures someone other than the Insured. And there might be a claim under that benefit while the Insured is living and in the days of grace while the contract is in default. In this case, we will subtract the amount needed to bring the contract out of default before we settle the claim.

REINSTATEMENT

     If this contract is still in default after the last day of grace, you may reinstate it. All these conditions must be met:

     1. The contract must not be in default more than five years.

     2. You must not have surrendered the contract for its net cash value.

     3. You must give us any facts we need to satisfy us that the Insured is insurable for the contract.

     4. We must be paid a premium at least equal to the amount required to bring the premium account up to zero on the first monthly date on which a scheduled premium is due after the date of reinstatement.

     5. If before reinstatement the contract is in force as reduced paid-up insurance (see pages 18 & 19), any contract debt under reduced paid-up insurance must be repaid with interest or carried over to the reinstated contract.

(VALB--88)                                                                           Page 11

     If we approve the reinstatement, these statements apply. The date of reinstatement will be the date of your request or the date the required premium is paid, if later. We will start to make daily and monthly charges and credits again as of the date of reinstatement. We will deduct from the premium paid the charges from premium payments described in the contract data pages, and any charges in arrears, other than item (b) of the monthly deduction (see pages 3A and 18), with 4% interest to the date of reinstatement. The contract fund will be equal to the remainder, plus the cash value of the contract immediately before reinstatement, plus a refund of that part of any surrender charge deducted at the time of default which would be charged if the contract were surrendered immediately after reinstatement.

     If we consent, you may be able to reinstate the contract for a premium less than that described above. We will deduct the same charges and adjust the contract fund in the same manner. In that case, the premium account will be less than zero and you may need to pay more than the scheduled premiums to guarantee that the contract will not go into default again at some future time.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

FACE AMOUNT CHANGES AND WITHDRAWALS

FACE AMOUNT

     The face amount is shown on page 3. It will change if: (1) you increase or decrease it, or (2) you make a withdrawal.

INCREASE IN FACE AMOUNT

     After the first contract year, you may increase the face amount once each contract year. You may do so subject to all these conditions and the paragraph that follows:

     1. You must ask for the increase in writing in a form that meets our needs; if you are not the Insured and the Insured is age 8 or over, he or she must sign the form too.

     2. The amount of the increase must be at least equal to the minimum increase in face amount, which we show on page 3.

     3. You must give us any facts we need to satisfy us that the Insured is insurable for the amount of the increase.

     4. If we ask you to do so, you must send us the contract to be endorsed.

     5. The contract must not be in default.

     6. We must not since the issue date, have changed the basis on which benefits and charges are calculated under newly issued contracts.

     7. You must make any required payment.

     8. The Insured must be eligible for the same rating class and benefits as shown on page 3.

     9. We must not be waiving premiums in accord with any waiver of premium benefit that may be included in the contract.

     An increase will take effect only if we approve your request for it at our Home Office. If we approve the increase, we will recompute the contract's basic premiums, maximum surrender charges, tabular values, monthly deductions, and expense charges. We will send you new contract data pages showing the amount and effective date of the increase and the recomputed values. If the Insured is not living on the effective date, the increase will not take effect.

(VALA--88)                                                                           Page 12H

DECREASE IN FACE AMOUNT

     After the first contract year, you may decrease the face amount. You may do so subject to all these conditions and the paragraphs that follow:

     1 . You must ask for the decrease in writing in a form that meets our needs.

     2. The amount of the decrease must be at least equal to the minimum decrease in face amount, which we show on page 3.

     3. The face amount after the decrease must be at least equal to the minimum face amount, which we show on page 3.

     4. If we ask you to do so, you must send us the contract to be endorsed.

     A decrease will take effect only if we approve your request for it at our Home Office. If we approve the decrease, we will recompute the contract's basic premiums, maximum surrender charges, tabular values, monthly deductions and

expense charges. A decrease in face amount may also affect the amount of any extra benefits this contract might have. We will send you new contract data pages showing the amount and effective date of the decrease and the recomputed

values. If the Insured is not living on the effective date, the decrease will not take effect.

     We may deduct an administrative fee of up to $15.00, and a proportionate part of any then applicable surrender charge from the contract fund.

WITHDRAWALS

     You may make withdrawals from the contract. You may do so subject to all these conditions and the paragraphs that follow:

     1. You must ask for the withdrawal in writing in a form that meets our needs.

     2. The amount withdrawn, plus the net cash value after withdrawal, may not be more than the net cash value before withdrawal.

     3. The contract fund after withdrawal must not be less than the tabular contract fund.

     4. The amount you withdraw must be at least $500.

     5. You may make up to four withdrawals in any contract year.

     6. If we ask you to do so, you must send us the contract to be endorsed.

     We may deduct an administrative fee of up to $15.00.

     We will normally pay any withdrawal within seven days after we receive your request at our Home Office. But we have the right to postpone paying the part of the proceeds that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year.

     An amount withdrawn may not be repaid, except as a premium subject to charges.

     We will tell you how much you may withdraw if you ask us.

(VALB--88)                                                                           Page 13

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

DIVIDENDS

PARTICIPATION

     We will decide each year what part, if any, of our surplus to credit to this contract as a dividend.

     While the contract is in force other than as extended or reduced paid-up insurance, it will be eligible for such a dividend if the Insured is living. We will credit any such dividend on the anniversary. We do not expect to credit any dividends to this contract.

DIVIDEND OPTIONS

     If you ask us in writing and in a form that meets our needs, you may choose any of these uses for any such dividend:

     1. Cash.--We will pay it to you in cash.

     2. Premium Reduction.--We will use it to reduce any premium then required. If no premium is then required, we will apply the dividend under dividend option 3.

     3. Dividend Addition.--We will use it at the net single premium rate as of the anniversary to provide a dividend addition, which is paid-up life insurance on the Insured's life.

     4. Accumulation.--We will hold it at interest. The rate will be at least 3% a year. We may use a higher rate.

     If you have not made another choice by 31 days after the anniversary, we will use the dividend as we state under dividend option 3. But if the contract is in default at the end of the last day of grace, we will use the dividend as we state under Contract Value Options. You may surrender any of the above additions or accumulations for their net value if: (1) we have not included them in the net cash value used to provide extended or reduced paid-up insurance; (2) we do not need them as security for contract debt; and (3) we have your request in writing in a form that meets our needs. The surrender value of those additions will not be less than the dividends we used to provide them.

     While the contract is in force as reduced paid-up insurance, it will be eligible for a dividend if the Insured is living. We will credit any such dividend on the anniversary as a paid-up life insurance addition on the Insured's life.

DIVIDEND CREDITS DESCRIBED

     The phrase dividend credits means the total of: (1) either the amount or value, as we explain in the next sentence, of any dividend additions under dividend option 3 or on reduced paid-up insurance; (2) any dividends and interest we hold under dividend option 4; and (3) any other dividends we have credited to the contract but have not yet used or paid. For dividend additions, the phrase means the amount of any of those additions when we set the amount of any extended insurance and when we refer to the proceeds that arise from the Insured's death; the phrase means the net value of any of those additions when we refer to loans, net cash values, or the proceeds that arise on surrender.

SETTLEMENT

     We will include any dividend credits in the amount payable when we settle the contract.

(VALB--88)                                                                           Page 14

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

SEPARATE ACCOUNTS

SEPARATE ACCOUNT

     The words separate account, when we use them in this contract without qualification, mean any separate account we establish to support variable life insurance contracts like this one. We list the separate accounts available to you in the contract data pages. We may establish additional separate accounts.  We will notify you within one year if we do so.

     A separate account may or may not be registered with the SEC under the Investment Company Act of 1940. The contract data pages will tell you whether or not a particular separate account is so registered.

VARIABLE INVESTMENT OPTIONS

     A separate account may offer one or more variable investment options. We list them in the contract data pages. We may establish additional variable investment options. We will notify you within one year if we do so.

     Income and realized and unrealized gains and losses from assets in each variable investment option are credited to, or charged against, that variable investment option. This is without regard to income, gains, or losses in our other investment accounts.

SEPARATE ACCOUNT INVESTMENTS

     We may invest the assets of different separate accounts in different ways. But we will do so only with the consent of the SEC and, where required, of the insurance regulator where this contract is delivered.

     We will always keep assets in the separate accounts with a total value at least equal to the amount of the variable investment options under contracts like this one. To the extent those assets do not exceed that amount, we use them only to support those contracts; we do not use those assets to support any other business we conduct. We may use any excess over that amount in any way we choose.

     We will determine the value of the assets in each separate account and any variable investment option at regular intervals.

(VALB--88)                                                                           Page 15

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

FIXED INVESTMENT OPTIONS

     You may allocate all or part of your invested premium amount to a fixed investment option. Fixed investment options are credited with interest as described under Guaranteed Interest and Excess Interest on page 17.

     We may establish additional fixed investment options. We will notify you within one year if we do so.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

TRANSFERS

     Four transfers may be made in a policy year. There is no charge for these transfers.

     You may transfer amounts into or out of variable investment options of separate accounts registered under the Investment Company Act of 1940 and into the fixed investment options at any time if the contract is not in default or if the contract is being continued under the variable reduced paid-up option. Other transfers are allowed only with our consent.

     In addition, the entire amount in all investment options may be transferred to a fixed investment option at any time within the first two contract years.

     To make a transfer, you must notify us in a form that meets our needs. The transfer will take effect on the date we receive your notice at our Home Office.

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

INSURANCE AMOUNT

     The insurance amount on any date is equal to the greatest of: (1) the face amount, (2) the face amount, plus the contract fund before deduction of any monthly charges due on that date, minus the tabular contract fund, and (3) the contract fund before deduction of any monthly charges due on that date, divided by the net single premium per $1 at the Insured's attained age.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT FUND

CONTRACT FUND DEFINED

     On the contract date the contract fund is equal to the invested premium amounts credited on that date, minus any of the charges described below which may be due on that date. On any day after that the contract fund is equal to what it was on the previous day, plus any invested premium amounts credited that day, plus these items:

     (a) any increase due to investment results in the value of the variable investment options;

     (b) guaranteed interest on that portion of the contract fund that is not in a variable investment option; and

     (c) any excess interest on that portion of the contract fund that is not in a variable investment option;

(VALB--88)                                                                           Page 16

and minus any of these items applicable on that day:

     (d) any decrease due to investment results in the value of the variable investment options;

     (e} a charge against the variable investment options at a rate of not more than 0.00245475% a day (0.90% a year) for mortality and expense risks that we assume;

     (f) any amount charged against the variable investment options for federal or state income taxes;

     (g) any monthly deduction;

     (h) any charge for extra rating class;

     (i) any charge for extra benefits;

     (j) any withdrawals; and

     (k) any surrender charges, administrative charges, or contract debt cancelled that may result from a withdrawal, a decrease in face amount or a change in status to variable reduced paid-up insurance.

     We describe under Reinstatement on page 11 what the contract fund will be on any reinstatement date. There is no contract fund for a contract in force as extended insurance or fixed reduced paid-up insurance.

GUARANTEED INTEREST

     We will credit interest each day on any portion of the contract fund not in a variable investment option. We will credit 0.01074598% a day, which is equivalent to an effective rate of 4% a year.

EXCESS INTEREST

     We may credit excess interest, that is, interest in addition to the guaranteed interest, on any portion of the contract fund not in a variable investment option. The rate of any excess interest will be determined from time to time and will continue thereafter until a new rate is determined. We may use different rates of excess interest for different portions of the contract fund.  We may from time to time guarantee rates of excess interest on some portions of the contract fund.

CHARGE FOR EXTRA RATING CLASS

     If the contract is not in default past its days of grace and there is an extra charge because of the rating class of the Insured, we will deduct it from the contract fund on each monthly date. The maximum amount of any charge is included in the amount shown in the contract data pages under Schedule of Monthly Deductions from the Contract Fund.

CHARGE FOR EXTRA BENEFITS

     If the contract has extra benefits, we will deduct the charges for them from the contract fund on each monthly date. The maximum amount of any such charges are included in the amount shown in the contract data pages under Schedule of Monthly Deductions from the Contract Fund.

(VALB--88)                                                                           Page 17H

MONTHLY DEDUCTION

     On each monthly date, we will make a deduction. We show the maximum amount of this deduction in the contract data pages. We may deduct less than the maximum amount. The coverage amount (referred to on page 3A) is the difference between the insurance amount and the adjusted contract fund. The adjusted contract fund is equal to the tabular contract fund at the end of the contract year multiplied by 0.98051782 plus the contract fund before deduction of any monthly charges due on the monthly date, minus the tabular contract fund on the monthly date.

     The maximum monthly rates are based on the Insured's sex, rating class and attained age and are shown in the contract data pages. At least once every five years, but not more often than once a year; we will consider the need to change the rates based on actual or anticipated mortality and expense experience under contracts like this one. We will change them only if we do so for all contracts like this one dated in the same year as this one.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT VALUE OPTIONS

BENEFIT AFTER THE GRACE PERIOD

     If the contract is in default beyond its days of grace, we will use any net cash value to keep the contract in force as one of three kinds of insurance:

     1. Extended insurance applies to most contracts.

     2. Fixed reduced paid-up insurance always applies if we issued the contract in a rating class for which we do not provide extended insurance; in this case, the phrase No Extended Insurance will appear under the heading Rating Class in the contract data pages.

     3. Variable reduced paid-up insurance applies if the amount of paid-up insurance would be at least as great as the amount of extended insurance and the contract was issued in a rating class permitting extended insurance.

     We describe each kind of insurance below. Any extra benefit will end as soon as the contract is in default past its days of grace, unless the form that describes the extra benefit states otherwise.

EXTENDED INSURANCE

     This will be term insurance on the Insured's life. We will pay the amount of term insurance if the Insured dies in the term we describe below. Before the end of the term there will be cash values but no loan value.

     The amount of term insurance will be: (1) the insurance amount, plus (2) any dividend credits minus (3) any contract debt. The term is a period of time that will start on the day the contract went into default. The length of the term will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.

     There may be extra days of term insurance. This will occur if, on the day the contract goes into default, the term of extended insurance provided by the net cash value does not exceed 90 days, or the number of days the contract was in force before the default began, if less. The number of extra days will be: (1) 90, or the number of days the contract was in force before the default began, if less, minus (2) the number of days of extended insurance that would be provided by the net cash value if there were no contract debt. The extra days, if any, start on the day after the last day of term insurance provided by the net cash value, if any. If there is no such term insurance, they start on the day the contract goes into default. The term insurance for the extra days has no cash value. There will be no extra days if you replace the extended insurance with reduced paid-up insurance or you surrender the contract before the extra days start.

FIXED REDUCED PAID-UP INSURANCE

     This will be paid-up life insurance on the Insured's life. We will pay the amount of this insurance when the Insured dies. There will be cash values and loan values.

(VALB--88)                                                                           Page 18H

     The amount of this insurance will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.

VARIABLE REDUCED PAID-UP INSURANCE

     This will be paid-up variable life insurance on the Insured's life. We will pay the amount of this insurance when the Insured dies. The death benefit may change from day to day, as we explain below, but if there is no contract debt it will not be less than the minimum guaranteed amount. There will be cash values and loan values.

     The minimum guaranteed amount of insurance will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.  The amount payable in the event of death will be the greater of (a) the minimum guaranteed amount, and (b) the contract fund divided by the net single premium per $1 at the Insured's attained age. In either case the amount will be

adjusted for any contract debt.

     The variable reduced paid-up insurance option will be available only if the minimum guaranteed amount under the option is at least $5,000 and if we issued the contract in a rating class permitting extended insurance.

COMPUTATIONS

     We will make all computations for any of these benefits as of the date the contract goes into default. But we will consider any dividend credits you surrender, any loan you take out or pay back, or any premium payments, withdrawals, or changes in face amount you make in the days of grace.

OPTIONAL BENEFIT

     You may choose to replace any extended insurance that has a cash value by fixed reduced paid-up insurance or by variable reduced paid-up insurance if it is available. To make this choice you must do so in writing in a form that meets our needs not more than three months after the date the contract goes into default. You must also send the contract to us to be endorsed.

CASH VALUE OPTION

     You may surrender this contract for its net cash value. The net cash value at any time is the cash value at that time less any contract debt. To surrender this contract, you must ask us in writing in a form that meets our needs. You must also send the contract to us. Here is how we will compute the net cash value:

     1. If the contract is not in default, the net cash value on any date will be the contract fund, before deduction of any monthly charges due on that date, minus any surrender charge, plus any dividend credits, minus any contract debt.  The Schedule of Maximum Surrender Charges for this contract is in the contract data pages.

     2. If the contract is in default during its days of grace, we will compute the net cash value as of the date the contract went into default. But we will adjust this value for any dividend credits you surrender, any loan you take out or payback and any premium payments, withdrawals or decreases in face amount you make in the days of grace.

     3. If the contract is in default beyond its days of grace, the net cash value will be either: (1) the net value on that date of any extended insurance benefit then in force, or (2) the net value on that date of any reduced paid-up insurance benefit then in force, including any dividend credits, less any contract debt.

     Within thirty days after an anniversary, the net cash value of any extended insurance or fixed reduced paid-up insurance will not be less than the value on that anniversary adjusted for any dividend credits you surrender and any loan you take out or pay back in those thirty days.

     We will usually pay any net cash value within seven days after we receive your request and the contract at our Home Office. But we have the right to defer paying the part of the proceeds that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year.

(VALB--88)                                                                           Page 19

TABULAR VALUES

     We show tabular contract fund values and tabular cash values at the ends of contract years in the contract data pages.

     If we need to compute tabular values at some time during a contract year, we will count the time since the start of the year. We will let you know the tabular values for other durations if you ask for them.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

LOANS

LOAN REQUIREMENTS

     You may borrow from us on the contract. All these conditions must be met:

     1. The Insured must be living.

     2. The contract must be in force other than as extended insurance.

     3. The contract debt will not be more than the loan value.

     4. As sole security for the loan, you assign the contract to us in a form that meets our needs.

     5. Except to pay premiums on this contract, you may not borrow less than $200 at any one time.

     If there is already contract debt when you borrow from us, we will add the new amount you borrow to that debt.

CONTRACT DEBT

     Contract debt at any time means the loan on the contract, plus the interest we have charged that is not yet due and that we have not yet added to the loan.

     Example 1: Suppose the contract has a loan value of $6,000. A few months ago you borrowed $1,500. By now there is interest of $55 charged but not yet due. The contract debt is now $1,555, which is made up of the $1,500 loan and the $55 interest.

LOAN VALUE

     You may borrow any amount up to the difference between the loan value and any existing contract debt. Except as we state in the next paragraph, the loan value at any time is equal to the sum of (a) 90% of the portion of the cash value that is attributable to the variable investment options, and (b) the balance of the cash value.

     There are two exceptions. The first is that, if the contract is in default, the loan value during the days of grace is what it was on the date of default adjusted for any dividend credits you surrender and any premium payments, withdrawals, or decreases in face amount you make in the days of grace. The second is that, if the contract is in force as fixed reduced paid-up insurance, the loan value is equal to the amount that would grow at interest to equal the cash value on the next anniversary.

     Example 2: Suppose, in example 1, you want to borrow all that you can. We will lend you $4,445 which is the difference between the $6,000 loan value and the $1,555 contract debt. This will increase the contract debt to $6,000. We will add the new amount borrowed to the existing loan and will charge interest on it, too.

INTEREST CHARGE

     You may select either the fixed loan rate option or the variable loan rate option. Both are described below. We show on page 3 the option you have selected. If you request a change from one option to the other and we agree, we will tell you the effective date of the change.

     We charge interest daily on any loan. Interest is due on each contract anniversary, or when the loan is paid back, whichever comes first. If interest is not paid when due, it becomes part of the loan. Then we start to charge interest on it, too.

(VALB--88)                                                                           Page 20

     Example 3: Suppose the contract date is in 1988. Six months before the anniversary in 1997 you borrow $1,600 out of a $4,000 loan value. We charge 5-1/2% a year. Three months later, but still three months before the anniversary, we will have charged about $22 interest. This amount will be a few cents more or less than $22 since some months have more days than others. The interest will not be due until the anniversary unless the loan is paid back sooner. The loan will still be $1,600. The contract debt will be $1,622, since contract debt includes interest charged but not yet due.

     On the anniversary in 1997 we will have charged about $44 interest. The interest will then be due.

     Example 4: Suppose the $44 interest in example 3 was paid on the anniversary. The loan and contract debt each became $1,600 right after the payment.

     Example 5: Suppose the $44 interest in example 3 was not paid on the anniversary. The interest became part of the loan, and we began to charge interest on it, too. The loan and contract debt each became $1,644.

FIXED LOAN RATE OPTION

     The loan interest rate is 5-1/2% a year.

VARIABLE LOAN RATE OPTION

     The loan interest rate is the annual rate we set from time to time. The rate will never be greater than is permitted by law. It will change only on a contract anniversary.

        Before the start of each contract year, we will determine the loan interest rate we can charge for that contract year. To do this, we will first find the rate that is the greater of: (1) The Published Monthly Average (which we describe below) for the calendar month ending two months before the calendar month of the contract anniversary; and (2) 5%.

     If that greater rate is at least 1/2% more than the loan interest rate we had set for the current contract year, we have the right to increase the loan interest rate by at least 1/2%, up to that greater rate. If it is at least 1/2% less, we will decrease the loan interest rate to be no more than the greater rate. We will not change the loan interest rate by less than 1/2%.

     When you make a loan we will tell you the initial interest rate for the loan. We will send you a notice if there is to be an increase in the rate.

     The Published Monthly Average means:

     1. Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc. or any successor to that service; or

     2. If that average is no longer published, a substantially similar average, established by the insurance regulator where this contract is delivered.

REPAYMENT

     All or part of any contract debt may be paid back at any time while the Insured is living. But if there is contract debt at the end of the last day of grace when the contract is in default, it will be deducted from the cash value to determine the net cash value. When we settle the contract, any contract debt is due us. We will make an adjustment so that the proceeds will not include the amount of that debt.

EFFECT OF A LOAN

     When you take a loan, the amount of the loan continues to be part of the contract fund and is credited with interest at the guaranteed rate of 4% a year.  If you have selected the variable loan rate option, we will credit excess interest at an effective rate of not less than the loan interest rate for the contract year less 5%.

     We will reduce the portion of the contract fund allocated to the investment options by the amount you borrow, and by loan interest that becomes part of the loan because it is not paid when due.

(VALB--88)                                                                           Page 21

     On each transaction date, if there is a contract loan outstanding, we will increase the portion of the contract fund in the investment options by interest credits accrued on the loan since the last transaction date. When you repay part or all of a loan we will increase the portion of the contract fund in the investment options by the amount of loan you repay, plus interest credits accrued on the loan since the last transaction date. We will not increase the portion of the contract fund allocated to the investment options by loan interest that is paid before we make it part of the loan.

EXCESS CONTRACT DEBT

     If contract debt ever grows to be equal to or more than the cash value, all the contract's benefits will end 61 days after we mail a notice to you and any assignee we know of. Also, we may send a notice to the Insured's last known address. In the notice we will state the amount that, if paid to us, will keep the contract's benefits from ending for a limited time.

POSTPONEMENT OF LOAN

     We will usually make a loan within seven days after we receive your request at our Home Office. But we have the right to postpone making the part of the loan that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds of a loan for up to six months, unless it will be used to pay premiums on this or other contracts with us.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

SETTLEMENT OPTIONS

PAYEE DEFINED

     In these provisions and under the Automatic Mode of Settlement, the word payee means a person who has a right to receive a settlement under the contract.  Such a person may be the Insured, the owner, a beneficiary, or a contingent

payee.

CHOOSING AN OPTION

     A payee may choose an option for all or part of any proceeds or residue that becomes payable to him or her in one sum. We describe residue on page 23.

     In some cases, a payee will need our consent to choose an option. We describe these cases under Conditions.

OPTIONS DESCRIBED

     Here are the options we offer. We may also consent to other arrangements.

OPTION 1 (INSTALMENTS FOR A FIXED PERIOD)

     We will make equal payments for up to 25 years based on the Option 1 Table.  The payments will include interest at an effective rate of 3-1/2% a year. We may credit more interest. If and while we do so, the payments will be larger.

OPTION 2 (LIFE INCOME)

     We will make equal monthly payments for as long as the person on whose life the settlement is based lives, with payments certain for the period chosen. The choices are either ten years (10-Year Certain) or until the sum of the payments equals the amount put under this option (Instalment Refund). The amount of each payment will be based on the Option 2 Table and on the sex and age, on the due date of the first payment, of the person on whose life the settlement is based. But if a choice is made more than two years after the contract proceeds first become payable, we may use the Option 2 rates in ordinary policies we regularly issue, based on United States currency, on the due date of the first payment. On request, we will quote the payment rates in policies we then issue. We must have proof of the date of birth of the person on whose life the settlement is based. The settlement will share in our surplus to the extent and in the way we decide.

(VALB--88)                                                                           Page 22

OPTION 3 (INTEREST PAYMENT)

     We will hold an amount at interest. We will pay interest at an effective rate of at least 3% a year ($30.00 annually, $14.89 semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more interest.

OPTION 4 (INSTALMENTS OF A FIXED AMOUNT)

     We will make equal annual, semi-annual, quarterly or monthly payments if they total at least $90 a year for each $1,000 put under this option. We will credit the unpaid balance with interest at an effective rate of at least 3-1/2% a year. We may credit more interest. If we do so, the balance will be larger.  The final payment will be any balance equal to or less than one payment.

OPTION 5 (NONPARTICIPATING INCOME)

     We will make payments like those of any annuity we then regularly issue that: (1) is based on United States currency; (2) is bought by a single sum; (3) does not provide for dividends; and (4) does not normally provide for deferral of the first payment. The payment will be at least what we would pay under that kind of annuity with its first payment due on its contract date. At least one of the persons on whose life the Option 5 is based must be a payee. If a life income is chosen, we must have proof of the date of birth of any person on whose life the option is based. Option 5 cannot be chosen more than 30 days before the due date of the first payment. On request, we will quote the payment that would

apply for any amount placed under the option at that time.

FIRST PAYMENT DUE DATE

     Unless a different date is stated when the option is chosen: (1) the first payment for Option 3 will be due at the end of the chosen payment interval; and (2) the first payment for any of the other options will be due on the date the option takes effect.

RESIDUE DESCRIBED

     For Options 1 and 2, residue on any date means the then present value of any unpaid payments certain. We will compute it at an effective interest rate of 3-1/2% a year. But we will use the rate we used to compute the actual Option 2 payments if they were not based on the table in this contract.

     For Options 3 and 4, residue on any date means any unpaid balance with interest to that date.

     For Option 5, it means the then present value of any unpaid payments certain. We will compute it at the interest rate to which we refer in Option 5.

     For Option 2 and 5, residue does not include the value of any payments that may become due after the certain period.

WITHDRAWAL OF RESIDUE

     Unless otherwise stated when the option is chosen: (1) under Options l and 2, the residue may be withdrawn; and (2) under Options 3 and 4 all, or any part not less than $100, of the residue may be withdrawn. If an Option 3 residue is reduced to less than $1,000, we have the right to pay it in one sum. Under Option 2, withdrawal of the residue will not affect any payments that may become due after the certain period; the value of those payments cannot be withdrawn.  Instead, the payments will start again if they were based on the life of a person who lives past the certain period.

     For Option 5, the residue may not be withdrawn while the payee and any other person on whose life the option is based is living. But, unless otherwise stated, when the option is chosen, after the death of the last of them to die any residue not already paid in one sum may be withdrawn.

DESIGNATING CONTINGENT PAYEE(S)

     A payee under an option has the right, unless otherwise stated, to name or change a contingent payee to receive any residue at that payee's death. This may be done only if: (1) the payee has the full right to withdraw the residue, (2) the residue would otherwise have been payable to that payee's estate at death, or (3) a settlement with payments certain is being made in accord with Option 5.

     A payee who has this right may choose, or change the choice of, an option for all or part of the residue. In some cases, the payee will need our consent to choose or change an option. We describe these cases under Conditions.

     Any request to exercise any of these rights must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office. Then the interest of anyone who is being removed will end as of the date of the request, even if the payee who made the request is not living when we file it.

(VALB--88)                                                                           Page 23

CHANGING OPTIONS

     A payee under Option 1, 3, or 4 may choose another option for any sum that the payee could withdraw on the date the chosen option is to start. That date may be before the date the payee makes the choice only if we consent. In some cases, the payee will need our consent to choose or change an option. We describe these cases next.

CONDITIONS

     Under any of these conditions, our consent is needed for an option to be used for any person:

     1. The person is not a natural person who will be paid in his or her own right.

     2. The person will be paid as assignee.

     3. The amount to be held for the person under Option 3 is less than $1,000.  But we will hold any amount for at least one year in accord with the Automatic Mode of Settlement.

     4. Each payment to the person under the option would be less than $20.

     5. The option is for residue arising other than at (a) the Insured's death, or (b) the death of the beneficiary who was entitled to be paid as of the date of the Insured's death.

     6. The option is for proceeds that arise other than from the Insured's death, and we are settling with an owner or any other person who is not the Insured.

DEATH OF PAYEE

     If a payee under an option dies and if no other distribution is shown, we will pay any residue under that option in one sum to the payee's estate.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

AUTOMATIC MODE OF SETTLEMENT

APPLICABILITY

     These provisions apply to proceeds arising from the Insured's death and payable in one sum to a payee who is a beneficiary. They do not apply to any periodic payment.

INTEREST ON PROCEEDS

     We will hold the proceeds at interest under Option 3 of the Settlement Options provisions. The payee may withdraw the residue. We will pay it promptly on request. We will pay interest annually unless we agree to pay it more often.  We have the right to pay the residue in one sum after one year if: (1) the payee is not a natural person who will be paid in his or her own right; (2) the payee will be paid as assignee; or (3) the original amount we hold under Option 3 for the payee is less than $1,000.

SETTLEMENT AT PAYEE'S DEATH

     If the payee dies and leaves an Option 3 residue, we will honor any contingent payee provision then in effect. If there is none, here is what we will do. We will look to the beneficiary designation of the contract; we will see what other beneficiary(ies), if any, would have been entitled to the portion of the proceeds that produced the Option 3 residue if the Insured had not died until immediately after the payee died. Then we will pay the residue in one sum to such other beneficiary(ies), in accord with that designation. But if, as stated in that designation, payment would be due the estate of someone else, we will instead pay the estate of the payee.

     Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. Jane was living when the Insured died. Jane later died without having chosen an option or naming someone other than Paul and John as contingent payee. If Paul and John are living at Jane's death we owe them the residue. If only one of them is living then, and if the contract called for payment to the survivor of them, we owe him the residue. If neither of them is living then, we owe Jane's estate.

SPENDTHRIFT AND CREDITOR

     A beneficiary or contingent payee may not, at or after the Insured's death, assign, transfer, or encumber any benefit payable. To the extent allowed by law, the benefits will not be subject to the claims of any creditor of any beneficiary or contingent payee.

(VALB--88)                                                                           Page 24

                                 OPTION 1 TABLE

MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY

- --------------------------------------------------------------------------------

                   Number of Years               Monthly Payment

- --------------------------------------------------------------------------------

                          1                                                      $84.65

                          2                                                      43.05

                          3                                                      29.19

                          4                                                      22.27

                          5                                                      18.12

                          6                                                      15.35

                          7                                                      13.38

                          8                                                      11.90

                          9                                                      10.75

                          10                                                     9.83

                          11                                                     9.09

                          12                                                     8.46

                          13                                                     7.94

                          14                                                     7.49

                          15                                                     7.10

                          16                                                      6.76

                          17                                                      6.47

                          18                                                      6.20

                          19                                                      5.97

                          20                                                      5.75

                          21                                                      5.56

                          22                                                      5.39

                          23                                                      5.24

                          24                                                      5.09

                          25                                                      4.96

- --------------------------------------------------------------------------------

Multiply the monthly amount by 2.989 for quarterly, 5.952 for semi-annual or 11.804 for annual.

- -------------------------------------------------------------------------------------------------------

                                           OPTION 2 TABLE

- -------------------------------------------------------------------------------------------------------

          MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY

- -------------------------------------------------------------------------------------------------------

KIND OF LIFE INCOME                                                                                      KIND OF LIFE INCOME

-------------------------------                                                                                     -------------------------------

AGE LAST BIRTHDAY	10-Year Certain		Instalment Refund		AGE  LAST BIRTHDAY	10-Year Certain		Instalment Refund
	Male	Female	Male	Female		Male	Female	Male	Female

- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10 and under 11 12 13 14   15 16 17 18 19   20 21 22 23 24   25 26 27 28 29   30 31 32 33 34   35 36 37 38 39   40 41 42 43 44   $3.18   3.19 3.20 3.21 3.22   3.24 3.25 3.27 3.28 3.30   3.31 3.33 3.35 3.36 3.38   3.40 3.42 3.45 3.47 3.49   3.52 3.54 3.57 3.60 3.63   3.66 3.69 3.72 3.76 3.80   3.84 3.88 3.92 3.97 4.01   $3.11   3.12 3.13 3.14 3.15   3.16 3.17 3.19 3.20 3.21   3.22 3.24 3.25 3.26 3.28   3.30 3.31 3.33 3.35 3.37   3.39 3.41 3.43 3.45 3.47   3.50 3.52 3.55 3.58 3.61   3.64 3.67 3.70 3.74 3.78   $3.17   3.18 3.19 3.20 3.21   3.23 3.24 3.25 3.27 3.28   3.30 3.32 3.33 3.35 3.37   3.39 3.41 3.43 3.45 3.47   3.49 3.52 3.54 3.57 3.60   3.63 3.66 3.69 3.72 3.75   3.79 3.82 3.86 3.90 3.94   $3.10   3.11 3.12 3.13 3.14   3.15 3.16 3.18 3.19 3.20   3.21 3.23 3.24 3.25 3.27   3.29 3.30 3.32 3.34 3.35   3.37 3.39 3.41 3.44 3.46   3.48 3.50 3.53 3.56 3.55   3.61 3.64 3.67 3.71 3.74   45 46 47 48 49   50 51 52 53 54   55 56 57 58 59   60 61 62 63 64   65 66 67 68 69   70 71 72 73 74   75 76 77 78 79 80 and over $4.06 4.12 4.17 4.23 4.28   4.35 4.41 4.48 4.55 4.62   4.70 4.78 4.86 4.95 5.05   5.15 5.25 5.36 5.48 5.60   5.73 5.87 6.01 6.15 6.30   6.46 6.62 6.79 6.96 7.13   7.30 7.48 7.66 7.83 8.00 8.17 $3.82 3.86 3.90 3.94 3.99   4.04 4.09 4.15 4.21 4.27   4.33 4.40 4.47 4.54 4.62   4.71 4.79 4.89 4.98 5.09   5.20 5.31 5.43 5.56 5.70   5.84 5.99 6.15 6.31 6.49   6.67 6.85 7.04 7.24 7.44 7.64   $3.99 4.03 4.08 4.13 4.18   4.24 4.29 4.35 4.41 4.48   4.55 4.62 4.69 4.77 4.86   4.94 5.03 5.13 5.23 5.34   5.45 5.57 5.70 5.83 5.97   6.11 6.27 6.43 6.60 6.78   6.97 7.17 7.38 7.60 7.83 8.07 $3.78 3.81 3.85 3.90 3.94   3.98 4.03 4.08 4.13 4.19   4.24 4.30 4.37 4.43 4.50   4.58 4.66 4.74 4.82 4.92   5.01 5.11 5.22 5.34 5.46   5.58 5.72 5.86 6.01 6.18   6.35 6.53 6.72 6.93 7.15 7.38  

(VALB--88)                                                                           Page 25

- -------------------------------------------------------------------------------------------------------------------------------------------------------

ENDORSEMENTS

(Only we can endorse this contract.)

VOTING RIGHTS

        We are a mutual life insurance company. Our principal office is in Newark, New Jersey, and we are incorporated in that State. By law, we have 24 directors. This includes 16 elected by our policyholders (four each year for four year terms), two of our officers, and six public directors named by New Jersey's Chief Justice.

        The election is held on the first Tuesday in April from 10:00 A.M. to 2:00 P.M. in our office at Prudential Plaza, Newark, N.J. After this contract has been in force for one year, you may vote either in person or by mail. We will send you a ballot if you ask for one. Just write to the Secretary at Prudential Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By law, your request must show your name, address, policy number and date of birth. Only individuals at least 18 years old may vote.

HOME OFFICE LOCATIONS

        When we use the term Home Office, we mean any of these Prudential offices:

Corporate Office, Newark, N.J.                                                                           North Central Home Office,

Minneapolis, Minn.

Eastern Home Office,                                                                 South-Central Home Office,

Fort Washington, Pa.                                                                 Jacksonville, Fla.

   The Prudential Insurance Company of America,

    By /s/ SPECIMEN

       ------------------------

       Secretary

COMB 86184--88

(VALB--88)                                                                           Page 26

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

ENDORSEMENTS

(Only we can endorse this contract.)

BASIS OF COMPUTATiON

MORTALITY TABLES DESCRIBED

     Except as we state in the next paragraph, (1) we base all net premiums and net values to which we refer in this contract on the Insured's issue age and sex and on the length of time since the contract date; (2) we use the Commissioners 1980 Standard Ordinary Non-Smokers Mortality Table; and (3) we use continuous functions based on age last birthday.

     For extended insurance, we base net premiums and net values on the Commissioners 1980 Non-Smokers Extended Term Insurance Table.

INTEREST RATE

     For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year.

EXCLUSIONS

     When we compute net values, tabular values, reduced paid-up insurance and extended insurance, we exclude the value of any supplementary benefits and any other extra benefits added by rider to this contract.

VALUES AFTER 20 CONTRACT YEARS

     Tabular values not shown on page 4 will be computed using the standard nonforfeiture method and the mortality tables and interest rate we describe above. We show the nonforfeiture factors in the contract data pages.

MINIMUM LEGAL VALUES

     The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required, we have given the insurance regulator a detailed statement of how we compute values and benefits.

     The Prudential Insurance Company of America,

                        By  [SPECIMEN SIGNATURE]

                            Secretary

ORD 86185--88

- ----------------------------------------------------===============================================================================

                                              Part 1 Application for Life Insurance to

[LOGO]                                        [X] The Prudential Insurance Company of America

                                              [ ] Pruco Life Insurance Company

                                                  A Subsidiary of The Prudential Insurance Company of America

                                               No. XX XXX XXX

- ------------------------------------------------------------------------------------------------------------

1a. Proposed Insured's name--first, initial, last (Print)              1b. Sex     2a. Date of birth     2b. Age      2c. Place of birth

                                                                                                     M   F            Mo.  Day  Yr.

                                                                                                     [X] [ ]             7      10    52         35         (Name of State)

    JOHN DOE

- ---------------------------------------------------------------------------------------------------------

3. [ ] Single  [X] Married  [ ] Widowed  [ ] Separated  [ ] Divorced   4. Social Security No. XXX/XX/XXXX

- ------------------------------------------------------------------------------------------------------------

5a. Occupation(s)  Clerk                                       5b. Duties        Clerical Duties

- -----------------------------------------------------------------------------------------------------------

6. Address for mail    No.            Street                 City                 State                    Zip

                                  15            Blank Street    (Name of City)   (Name of State)   XXXXX

- ------------------------------------------------------------------------------------------------------------

7a. Kind of policy  Variable Appreciable Life         7b. Initial amount                                   8. Accidental death coverage

             (Level Death Benefit)                                     $50,000 initial amount                           $

 ------------------------------------------------------------------------------------------------------------

9. Beneficiary: (Include name, age and relationship.)   10.List all life insurance on proposed Insured.    Check here if None [ ]

   a. Primary (Class 1):                       Company           Initial               Yr.           Kind                      Medical

      Mary Doe, 35, Spouse                                             amt.            issued    (Indiv., Group)          Yes   No

   ______________________________________                                                                             [ ]   [ ]

   _____________________________________________________________                               [ ]   [ ]

   ______________________________________________________________

    b. Contingent (Class 2) if any:                                                                                                         [ ]   [ ]

       Robert Doe, 10, Son                                 _______________________________                      [ ]   [ ]

___________________________________________________________________                       [ ]   [ ]

- -----------------------------------------------------------------------------------------------------

11. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP)

                                                       Relationship to   Date of birth                       Total life insurance

    Name--first, initial, last                  Sex    proposed Insured  Mo.  Day  Yr.  Age  Place of birth  in all companies

a.                                                          Spouse                                           $

______________________________________________________________________________________________________________

b.                                                                                                           $

______________________________________________________________________________________________________________

c.                                                                                                           $

______________________________________________________________________________________________________________

d.                                                                                                           $

______________________________________________________________________________________________________________

e.                                                                                                           $

_________________________________________________ ____________________________________________________________

f.                                                                                                           $

- ------------------------------------------------------------------------------------------------------------

12. Supplementary benefits and riders:

a. For proposed Insured                               b. For spouse, children, Applicant for AWP

Type and duration of benefit       Amount             Type and duration of benefit                Amount

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

[ ] Option to Purchase Additional Ins. $                           [ ] Applicant's Waiver of Premium benefit

- ------------------------------------------------------------------------------------------------------------

13. State any special request.

- ------------------------------------------------------------------------------------------------------------

14. Has any person named in 1a or 11, within the last 12 months:

    a. been treated by a doctor for or had a known heart attack, stroke or cancer (including melanoma) otherYes   No

       than of the skin? .............................................................................................  [ ]      [X]

    b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? .............................................................................................  [ ]  [X]

- ------------------------------------------------------------------------------------------------------------

15. Premiums payable  [X] Ann.  [ ] Semi-Ann.  [ ] Quar.  [ ] Mon.  [ ] Pay. Budg.  [ ] Pru-Matic  [ ] Gov't. Allot.

- ------------------------------------------------------------------------------------------------------------

16. Amount paid $454.59                                   [ ] None (Must be "None" if either 14a or b is answered "Yes".)

- -----------------------------------------------------------------------------------------------------------

17. Is a medical examination to be made on:                                                Yes   No

    a. the proposed Insured? .........................................................................................  [ ]  [X]

    b. spouse (if proposed for coverage)? .........................................................................................  [ ]  [ ]

- ------------------------------------------------------------------------------------------------------------

18. If 17a or b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until         Yes   No

    the person(s) indicated in 17 have been examined, even if 16 shows that an amount has been paid? .................  [ ]  [ ]

- ------------------------------------------------------------------------------------------------------------

 ORD 84376-86                                     Page 1 (Continued on page 2)

<PAGE>

- -----------------------------------------------------------------------------------------------------------------------------------

Continuation of Part 1 of Application

- -----------------------------------------------------------------------------------------------------------------------------------

19. Will this insurance replace or change any existing insurance or annuity in any company on any person named  in 1a or 11?

If "Yes", give their names, name of company, plan, amount, policy numbers and enclose any  required state replacement form(s).        Yes   No

                                                                                                                                              0;                                                                         [ ]   [X]

----------------------------------------------------------------------------------------

20. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 11 in this or any company?

If "Yes", give amount, details and company.           Yes   No                                                   [ ]   [X]

- -------------------------------------------------------------------------------------

21. Does any person named in 1a or 11 plan to live or travel outside the United States and Canada within the  next 12 months? If "Yes", give country(ies), purpose and duration of trip.  Yes   No

                                                                       [ ]   [X]

- --------------------------------------------------------------------------------------

22. Has any person named in 1a or 11 operated or had any duties aboard an aircraft, glider, balloon, or like device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", complete Aviation Questionnaire.              Yes  No

                                                                                                                                              0;                       [ ]  [X]

----------------------------------------------------------------------------------------

23. Has any person named in 1a or 11 engaged in hazardous sports such as: auto, motorcycle or power boat sports; bobsledding, scuba or skin diving; mountain climbing; parachuting or sky diving; snowmobile racing or any other hazardous sport or hobby within the last 2 years or does any such person plan to do so in the future? If "Yes", complete Avocation Questionnaire.               Yes  No

                                                                                                                                              0;         [ ]  [X]

----------------------------------------------------------------------------------------

24. Has any person (age 15 or over) named in 1a or 11 in the last 3 years:                                       Yes  No

    a. had a driver's license denied, suspended or revoked?         .........................................................                    [ ]  [X]

    b. been convicted of three or more moving violations of any motor vehicle law or of driving while under

       the influence of alcohol or drugs? ...........................................................................  [ ]  [X]

    c. been involved as a driver in 2 or more auto accidents? .......................................................                      [ ]  [X]

    If "Yes", give name, driver's license number and state of issue, type of violation and reason for license

    denial, suspension or revocation.

----------------------------------------------------------------------------------------

25. a. Has the proposed Insured smoked cigarettes within the past twelve months? ..............................   Yes [ ]  No [ ]

    b. Has the spouse (if proposed for coverage) smoked cigarettes within the past twelve months? .............   Yes [ ]  No [ ]

    c. If the proposed Insured or spouse has ever smoked cigarettes, cigars or a pipe, show date(s) last smoked:

                                  Cigarettes                                  Cigars                                       Pipe

Proposed Insured      Mo. _______     Yr. _______     Mo. _______     Yr. _______    Mo._______   Yr. _______

Spouse                      Mo. _______     Yr. _______     Mo. _______     Yr. _______    Mo._______   Yr. _______

- -------------------------------------------------------------------------------------

26. Changes made by the Company. (Not applicable in West Virginia)

----------------------------------------------------------------------------------------

To the best of the knowledge and belief of those who sign below, the statements in this application are complete and true. It is understood that, if any of the above statements (for example, the smoking data) is a material misrepresentation, coverage could be invalidated as a result. The beneficiary named in the application is for insurance payable upon death of (1) the Insured,and (2) an insured child after the death of the Insured if there is no insured spouse.

When the Company gives a Limited Insurance Agreement form, ORD 84376A-86, of the same date as this Part 1, coverage will start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the full first

premium is paid while all persons to be covered are living and their health remains as stated in Parts 1 and 2. If all these take place, coverage will start on the contract date. If the Company makes a change as indicated in 26 it will be approved by acceptance

of the contract. But where the law requires written consent for any change in the application, such change can be made only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the Company's rights or needs.

Ownership: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured, otherwise (2) the proposed Insured. But this is subject to any automatic transfer of ownership stated in the contract.

                      JOHN DOE

                    --------------------------------------------------------------------

                      Signature of Proposed Insured (If age 8 or over)

Dated at (Name of City/State)   on    Aug. 3, 1987

----------------    --------------------------------------------------------------------

          (City/State)                                         Signature of Applicant (If other than proposed Insured --

                                                               If applicant is a firm or corporation, show that company's name

Witness       JOHN ROE                                         By

- -----------------------------------------------------------    -----------------------

(Licensed agent must witness where required by law)            (Signature and title of officer signing for that company)

- -------------------------------------------------------------------------------------

ORD 84376-86

                                                       Page 2

The Prudential Insurance Company of America                      No. xx xxx xxx

A Supplement to the Life Insurance Application for a variable contract in which

John Doe is named as the proposed insured.

- -------------------------------------------------------------------------------

I BELIEVE THIS CONTRACT MEETS MY INSURANCE NEEDS AND FINANCIAL OBJECTIVES. I ACKNOWLEDGE RECEIPT OF A CURRENT PROSPECTUS FOR THE CONTRACT. I UNDERSTAND THAT THE CONTRACT'S VALUE AND DEATH BENEFIT MAY VARY DEPENDING ON THE CONTRACT'S

INVESTMENT EXPERIENCE .......................................   YES [X]  NO [ ]

Date                                    Signature of Applicant

            Aug. 3, 1987                  JOHN DOE

- --------------------------------        -----------------------------------

 ORD 86218--88

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

ENDORSEMENTS

(Only we can endorse this contract.)

(VALB--88)                                                                           Page 27

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

     Modified Premium Variable whole Life Insurance Policy with variable insurance amount. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums.  Benefits reflect premium payments, investment results and charges. Death benefit guaranteed if scheduled premiums duly paid and no contract debt or withdrawals.  Increase in face amount at attained age 21 if contract issued at age 14 or

lower. Eligible for annual dividends as stated under Dividends.

VALB—88                                                                           Page 28

EXHIBIT 26(d)(i)(c)

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

                                                                                                The Prudential Insurance Company of America

[Prudential Logo]                                                                                                a mutual life insurance company

                                                                                                Prudential Plaza, Newark, New Jersey 07101

               Insured   JOHN DOE                                                                                                           XX XXX XXX   Policy Number

                                                                                                SEP 10, 1988   Contract Date

           Face Amount   $50,000--

        Premium Period   LIFE

                Agency   R-NK 1

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

     We will pay the beneficiary the proceeds of this contract promptly if we receive due proof that the Insured died. We make this promise subject to all the provisions of the contract.

     The proceeds arising from the Insured's death will be the insurance amount, plus the amount of any extra benefit arising from the Insured's death (unless the contract is in default or there is contract debt). The insurance amount may

be fixed or variable depending on the payment of premiums, the investment experience of the variable investment options, any excess interest credited to the fixed investment options, and the charges made. But it will not be less than

the face amount. (We describe the insurance amount on page 16.)

     The cash value may increase or decrease daily depending on the payment of premiums, the investment experience of the variable investment options, any excess interest credited to the fixed investment options, and the charges made.

There is no guaranteed minimum.

     We specify a schedule of premiums. Additional premiums may be paid at your option subject to the limitations in the contract.

     Please read this contract with care. A summary is on page 5. If there is ever a question about it, or if there is a claim, just see one of our agents or get in touch with one of our offices.

     Right to Cancel contract.--You may return this contract to us within: (1) 10 days after you get it, or (2) 45 days after Part 1 of the application was signed, or (3) 10 days after we mail or deliver to you any withdrawal right notice required by the Securities and Exchange Commission, whichever is latest.  All you have to do is take the contract or mail it to one of our offices or to the agent who sold it to you. It will be canceled from the start and we will promptly give you the value of your contract fund on the date you return the contract to us. We will also give back any charges we made in accord with this contract.

Signed for Prudential.

        /s/ SPECIMEN                         /s/  SPECIMEN

        --------------------                 -----------------------

            Secretary                             President

     Modified Premium Variable Whole Life Insurance Policy. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime.  Provision for optional additional premiums. Cash values reflect premium payments, investment results and charges. Death benefit guaranteed if scheduled premiums duly paid and no contract debt or withdrawals. Increase in face amount at attained age 21 if contract issued at age 14 or lower. Eligible for annual dividends as stated under Dividends.

- --------------------------------------------------------------------------------

VALA--88

GUIDE TO CONTENTS

                                                                                                                                              0;                              Page

Contract Data .....................................................................................................................................................  3

  List of Contract Minimums; List of Supplementary Benefits, if any; Summary

  of Face Amount; Schedule of Premiums; Schedule of Deduction from Premium Payments; Schedule

  of Monthly Deductions from the Contract Fund; Schedule of Other Charges; Schedule of

  Maximum Surrender Charges; Table of Maximum Monthly Mortality Rates; List of Investment Options;

  Schedule of Initial Allocation of Invested Premium Amounts; Home Office

Tabular Values ...................................................................................................................................................  4

Contract Summary .............................................................................................................................................  5

  Table of Basic Amounts

General Provisions..............................................................................................................................................  6

  Definitions; The Contract; Contract

  Modifications; Ownership and Control;

  Suicide Exclusion; Currency; Misstatement

  of Age or Sex; Incontestability; Assignment;

  Annual Report; Increase in Face Amount

  at Age 21 for Contracts Issued at Age 14

  or Lower; Payment of Death Claim; Change in Plan

Beneficiary..........................................................................................................................................................  8

Premium Payment and Reinstatement...............................................................................................................  8

  Payment of Premiums; Basic Premiums; Charge

  for Applicable Taxes; Scheduled Premiums;

  Unscheduled Premiums; Invested Premium

  Amount; Contract Change Date(s); Allocations;

  Premium Account; Default; Grace Period;

  Reinstatement

Face Amount Changes and Withdrawals .......................................................................................................... 12

  Face Amount; Increase in Face

  Amount; Decrease in Face Amount;

  Withdrawals

Dividends ........................................................................................................................................................... 14

  Participation; Dividend Options; Dividend Credits

  Described; Settlement

Separate Account ............................................................................................................................................. 15

  Separate Account; Variable Investment Options;

  Separate Account Investments

Fixed Investment Options ................................................................................................................................. 16

Transfers .......................................................................................................................................................... 16

Insurance Amount ............................................................................................................................................ 16

Contract Fund ................................................................................................................................................... 16

  Contract Fund Defined; Guaranteed Interest;

  Excess Interest, Charge for Expected Mortality;

  Charge for Extra Rating Class; Charge for Extra

  Benefits; Charges for Administration, Sales

  Expenses and Minimum Death Benefit Guarantee

Contract Value Options .................................................................................................................................... 18

  Benefit After the Grace Period; Extended

  Insurance; Fixed Reduced Paid-up

  Insurance; Variable Reduced Paid-up Insurance

  Computations; Optional Benefit; Cash Value

  Option; Tabular Values

Loans ............................................................................................................................................................... 21

  Loan Requirements; Contract Debt; Loan

  Value; Interest Charge; Fixed Loan Rate Option;

  Variable Loan Rate Option; Repayment; Effect

  of a Loan; Excess Contract Debt; Postponement

  of Loan

Settlement Options .......................................................................................................................................... 23

  Payee Defined; Choosing an Option;

  Options Described; First Payment Due Date;

  Residue Described;

  Withdrawal of Residue; Designating

  Contingent Payee(s);

  Changing Options; Conditions;

  Death of Payee

Automatic Mode of Settlement ........................................................................................................................ 26

   Applicability; Interest on Proceeds;

   Settlement at Payee's Death; Spendthrift and

   Creditor

Income Tables ................................................................................................................................................ 27

Voting Rights ................................................................................................................................................... 28

Home Office Locations .................................................................................................................................... 28

    Any supplementary benefits and a copy of the application follow page 28.

(VALA--88)                                                                           Page 2

CONTRACT DATA

Insured's Sex and Issue Age                                                          M-35

                    Insured                                                                           JOHN DOE      XX XXX XXX         Policy Number

                Face Amount                                                                    $50,000--     SEP 10, 1988       Contract Date

             Premium Period                                                                    LIFE

                     Agency                                                                         R-NK 1

                Beneficiary                                                                        CLASS 1     MARY DOE, WIFE

            CLASS 2     ROBERT DOE, SON

  Fixed Loan Interest Rate

LIST OF CONTRACT MINIMUMS

The minimum unscheduled premium is $25.

The minimum increase in face amount is $25,000.

The minimum decrease in face amount is $10,000.

The minimum face amount is $50,000.

***** END OF LIST *****

LIST OF SUPPLEMENTARY BENEFITS

***** NONE *****

SUMMARY OF FACE AMOUNT

                                          EFFECTIVE      RATING                 CONTRACT CHANGE

           AMOUNT            DATE                CLASS                   DATE

Initial    $50,000--           SEP 10, 1988       NONSMOKER      SEP 10, 2018

***** END OF SUMMARY *****

SCHEDULE OF PREMIUMS

Scheduled premiums are equal to the basic premium plus the charge for applicable taxes. The initial scheduled premium due on the contract date is $454.59. Due dates of scheduled premiums occur on the contract date and at intervals of 12 months after that date.

Basic Premiums are                                                                $  445.50 each

Changing on SEP 10, 2018 to                                              $ 2299.00 each

***** END OF SCHEDULE *****

VAL—88                                                                           PAGE 3

POLICY NO. XX XXX XXX

SCHEDULE OF DEDUCTIONS FROM PREMIUM PAYMENTS

From each premium paid, we first deduct a charge for applicable taxes (other than taxes discussed on page 14) of 2%. We reserve the right to change this percentage to conform to changes in the law or if the insured changes residence.

From the remainder, we deduct a charge for payment processing of up to $2.00.  After deduction of this amount, the balance is the invested premium amount.

***** END OF SCHEDULE *****

SCHEDULE OF MONTHLY DEDUCTIONS FROM THE CONTRACT FUND

The monthly charge for administration is no more than $4.00.

The monthly charge to guarantee the minimum death benefit is no more than $0.50.

The monthly charge for sales expenses is no more than $2.06.

***** END OF SCHEDULE *****

***** SCHEDULE OF OTHER CHARGES *****

There is a charge of up to $15 for any withdrawal or decrease in face amount.

***** END OF SCHEDULE *****

SCHEDULE OF MAXIMUM SURRENDER CHARGES

For full surrender at the beginning of the contract year indicated, the maximum charge we will deduct from the contract fund is shown below. For surrender at other times, the amount of the charge will reflect the number of days since the beginning of the contract year. For any decrease in face amount, we will deduct a proportionate part of the surrender charge.

 Year of            Surrender                      Year of                            Surrender

Surrender        Charge                           Surrender                          Charge

- ---------             ---------                           ---------                              ---------

   1                      457.00                                6                                     457.00

   2                      457.00                                7                                     365.50

   3                      457.00                                8                                     274.00

   4                      457.00                                9                                     183.00

   5                      457.00                                10                                     91.50

     11  AND LATER              Zero

***** END OF SCHEDULE *****

VAL—88                                                                           PAGE 3A

POLICY NO. XX XXX XXX

TABLE OF MAXIMUM MONTHLY MORTALITY RATES PER $1000

  Insured's           Maximum        Insured's           Maximum

Attained Age      Rate               Attained Age     Rate

- ------------           -------              ------------            ---------

      35                  0.1439                   68                  2.4893

      36                  0.1514                   69                  2.7438

      37                  0.1614                   70                  3.0317

      38                  0.1722                   71                  3.3603

      39                  0.1839                   72                  3.7397

      40                  0.1980                   73                  4.1690

      41                  0.2130                   74                  4.6407

      42                  0.2288                   75                  5.1449

      43                  0.2463                   76                  5.6774

      44                  0.2654                   77                  6.2340

      45                  0.2870                   78                  6.8180

      46                  0.3103                   79                  7.4478

      47                  0.3353                   80                  8.1434

      48                  0.3627                   81                  8.9229

      49                  0.3927                   82                  9.8023

      50                  0.4268                   83                 10.7774

      51                  0.4659                   84                 11.8290

      52                  0.5108                   85                 12.9330

      53                  0.5624                   86                 14.0753

      54                  0.6198                   87                 15.2384

      55                  0.6839                   88                 16.4173

      56                  0.7538                   89                 17.6287

      57                  0.8278                   90                 18.8899

      58                  0.9102                   91                 20.2303

      59                  1.0025                   92                 21.6995

      60                  1.1057                   93                 23.4408

      61                  1.2205                   94                 25.7770

      62                  1.3528                   95                 29.2738

      63                  1.5025                   96                 35.0252

      64                  1.6689                   97                 45.0097

      65                  1.8511                   98                 61.9945

      66                  2.0483                   99                 83.1973

      67                  2.2596

VAL—88                                                                           PAGE 3B

POLICY NO. XX XXX XXX

LIST OF INVESTMENT OPTIONS

I. THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

This account is registered with the SEC under the Investment Company Act of 1940. Each investment option of this account invests in a specific portfolio of The Prudential Series Fund. The fund is registered with the SEC under the Investment Company Act of 1940 as an open-end diversified management investment company. The fund has several portfolios. We show below the available investment options and the fund portfolios they invest in.

INVESTMENT                                FUND

OPTION                                           PORTFOLIO

              ----------                                                      ---------

           Money Market                                     Money Market

           Bond                                                      Bond

           Common Stock                                     Common Stock

           Aggressively Managed Flx               Aggressively Managed Flx

           Conservative Managed Flx               Conservative Managed Flx

           High Yield Bond                                  High Yield Bond

II. THE PRUDENTIAL REAL PROPERTY ACCOUNT

This account is not registered with the SEC under the Investment Company Act of 1940. The following investment option is available.

                                   INVESTMENT

                                     OPTION

                                    --------

                                   Real Estate

III. FIXED INVESTMENT OPTIONS

The fixed investment options are funded by the general account of the Company.

The following investment option is available.

                                   INVESTMENT

                                     OPTION

                                    --------

                               Fixed Interest Rate

********* END OF LIST *********

SCHEDULE OF INITIAL ALLOCATION OF INVESTED PREMIUM AMOUNTS

                      Money Market                 20%

                      Common Stock                 60%

                      Fixed Interest Rate           20%

********* END OF SCHEDULE *********

VAL—88                                                                           PAGE 3C

POLICY NO. XX XXX XXX

TABULAR VALUES

Tabular values are calculated based on the scheduled premiums, guaranteed charges and assumed rate of interest. Actual values may be different than the tabular amounts shown below.

                                                    Tabular

                                                                                   Extended

    End of                  Tabular                                                            Tabular                  Tabular                          Insurance*

   Contract                 Contract                                                         Cash                       Reduced                       ---------------

     Year                     Fund                                                                 Value                     Paid-up                       Years      Days

                                                                                                                                          Insurance

 --------                 --------                                                                -------                        - ---------                                 -----      ----

      1                      292.00                                                                0.00                                    0.00                              0          0

      2                      591.50                                                                134.50                                531.00              
60;           1          7

      3                      898.00                                                                441.00                                1682.00              &# 160;         3        58

      4                     1210.50                                                                753.50                                2779.00               & #160;       4       360

      5                     1529.00                                                                1072.00                                3824.00                      6       170

      6                     1853.0                                                                1487.00                                5132.00               & #160;       8         41

      7                     2182.00                                                                1908.00                                6369.00                      9       151

      8                     2515.50                                                                2332.50                                7533.00                      10154

      9                     2853.00                                                                2761.50                                8632.00                      1163

     10                     3194.00                                                                3194.00                                9663.00                 ;    11262

     11                     3537.50                                                                3537.50                                10361.00                0;  11316

     12                     3882.50                                                                3882.50                                11012.00                0;  11338

     13                     4229.00                                                                4229.00                                11617.00                0;  11329

     14                     4575.00                                                                4575.00                                12174.00                0;  11294

     15                     4919.50                                                                4919.50                                12684.00                0;  11236

     16                     5261.00                                                                5261.00                                13146.00                0;  11158

     17                     5596.00                                                                5596.00                                13556.00                0;  1162

     18                     5922.00                                                                5922.00                                13913.00                0;  10314

     19                     6235.00                                                                6235.00                                14211.00                0;  10185

     20                     6532.00                                                                6532.00                                14449.00                0;  1046

   ATTAINED

     AGE

   --------

     60                      7635.00                                                                7635.00                                14635.00               0;    7     290

     62                      7796.50                                                                7796.50                                14158.00               0;    6     263

     65                      7500.00                                                                7500.00                                12612.00                   5      

*There may be extra days of term insurance. We explain this under the Extended Insurance provision.

                  Nonforfeiture Factors, applicable during premium period, per $1,000 of initial face amount

                  Contract Years 1 through 30                  7.45334

                  Contract Years 31 and later                 43.02598

VAL—88                                                                           PAGE 4

- ------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT SUMMARY

     This life insurance contract will provide benefits while the Insured is living and upon the Insured's death as described below.

     Unless we endorse the contract to say otherwise, it gives you the following rights, among others, subject to certain limitations and requirements:

·   You may change the beneficiary.

·   You may borrow on it up to its loan value.

·   You may change the allocation of future invested premium amounts among the investment options.

·   You may transfer amounts among the investment options.

·   You may change the face amount.

·   You may withdraw a portion of the contract's value.

·   You may surrender the contract. If you do, the proceeds will be the net cash value.

     To compute the proceeds payable upon the Insured's death, we start with a basic amount and adjust that amount as described in the table below.

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

TABLE OF BASIC AMOUNTS

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

 If the contract is in force:                                 Then the basic amount is:                       And we adjust the basic amount  for:

- ---------------------------------------------------------------------------------------------------------------------------------------------------------------

and not in default past its days                      the insurance amount (see page                      contract debt (see page 20),

of grace                                                               16) plus the amount of any extra                     dividend credits (see page

                                                                             benefits arising from the                                   14), and any charges due in

                                                                             Insured's death                                                   the days of grace (see page 11).

- ----------------------------------------------------------------------------------------------------------------------------------------------------------------

as reduced paid-up insurance                         the amount of reduced paid-up                        contract debt and dividend

(see pages 18 & 19)                                           insurance (see pages 18 & 19)                         credits since the reduced

                                                                                                                                              0;              paid-up insurance began.

- ----------------------------------------------------------------------------------------------------------------------------------------------------------------

as extended insurance (see                              the amount of term insurance, if                       nothing.

page 18)                                                                the Insured dies in the term (see

                                                                              page 18); otherwise zero

- -------------------------------------------------------------------------------------------------------------------------------------------------------------------

     The contract may have extra benefits that we call supplementary benefits.  If it does, we list them under Supplementary Benefits on the contract data pages and describe them after page 28. The contract may have other extra benefits. If it does, we add them by rider. Any extra benefit ends as soon as the contract is in default past its days of grace, unless the form that describes it states otherwise.

     Proceeds need not be taken in one sum. For instance, on surrender, you may be able to choose a settlement option to provide retirement income or for some other purpose. If a death benefit becomes payable the beneficiary may also be able to make such a choice. We will automatically pay interest under Option 3 from the date of death on any death benefit to which no other manner of payment applies. This will be automatic as we state on page 26.

- ----------------------------------------------------------------------------------------------------------------------------------------------------------

(VALA--88)                                                                           Page 5

- ----------------------------------------------------------------------------------------------------------------------------------------------------------

GENERAL PROVISIONS

DEFINITIONS

     We define here some of the words and phrases used all through this contract. We expIain others, not defined here, in other parts of the text.

     We, Our, Us and Company.--Prudential.

     You and Your.--The owner of the contract.

     Insured.--The person named as the Insured on the first page. He or she need not be the owner.

     Example: Suppose we issue a contract on the life of your spouse. You applied for it and named no one else as owner. Your spouse is the Insured and you are the owner.

     SEC.--The Securities and Exchange Commission.

     Issue Date.--The contract date.

     Monthly Date.--The contract date and the same day as the contract date in each later month.

     Example: If the contract date is May 9, 1988, the monthly dates are each May 9, June 9, July 9 and so on.

     Anniversary or Contract Anniversary.--The same day and month as the contract date in each later year.

     Example: If the contract date is May 9, 1988, the first anniversary is May 9, 1989. The second is May 9, 1990, and so on.

     Contract Year.--A year that starts on the contract date or on an anniversary.

     Example: If the contract date is May 9, 1988, the first contract year starts then and ends on May 8, 1989. The second starts on May 9, 1989 and ends on May 8, 1990, and so on.

     Contract Month.--A month that starts on a monthly date.

     Example: If May 9, 1988 is a monthly date, a contract month starts then and ends on June 8, 1988. The next contract month starts on June 9, 1988 and ends on July 8, 1988, and so on.

     Attained Age.--The Insured's attained age at any time is the issue age plus the length of time since the contract date. You will find the issue age near the top of page 3.

     Assumed Rate of Return.--The assumed rate of return is an effective rate of 4% a year. This is the same as 0.01074598% a day compounded daily.

THE CONTRACT

     This policy, and the attached copy of the initial application, together with copies of any subsequent applications to change the policy, and any additional contract data pages added to the policy, form the whole contract. We assume that all statements in an application are made to the best of the knowledge and belief of the person(s) who make them; in the absence of fraud they are deemed to be representations and not warranties. We rely on those statements when we issue or change the contract. We will not use any statement, unless made in an application, to try to void the contract or to deny a claim.

CONTRACT MODIFICATIONS

     Only a Prudential officer with the rank or title of vice president or above may agree to modify this contract, and then only in writing.

OWNERSHIP AND CONTROL

     Unless we endorse this contract to say otherwise: (1) the owner of the contract is the Insured; and (2) while the Insured is living the owner alone is entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us.

(VALA--88)                                                                           Page 6

SUICIDE EXCLUSION

     If the Insured, whether sane or insane, dies by suicide within two years from the issue date, we will pay no more under this contract than the sum of the premiums paid.

     Also, for any increase in the face amount, if the Insured, whether sane or insane, dies by suicide within two years from the effective date of the increase, we will pay, as to the increase in amount, no more than the sum of the scheduled premiums that were due for the increase.

CURRENCY

     Any money we pay, or that is paid to us, must be in United States currency.  Any amount we owe will be payable at our Corporate Office.

MISSTATEMENT OF AGE OR SEX

     If the Insured's stated age or sex or both are not correct, we will adjust each benefit and any amount to be paid to reflect the correct age and sex. Any death benefit will be based on what the most recent charge for mortality would have provided at the correct age and sex. Where required, we have given the insurance regulator a detailed statement of how we will make these adjustments.

     The Schedule of Premiums may show that basic premiums change or stop on a certain date. We may have used that date because the Insured would attain a certain age on that date. If we find that the issue age was wrong, we will correct that date and, if necessary, the amount of any changed premiums.

INCONTESTABILITY

     Except as we state in the next sentence, we will not contest this contract after it has been in force during the Insured's lifetime for two years from the issue date. There are two exceptions: (1) non-payment of enough premium to provide the required charges; and (2) any change in the contract that requires our approval and that would increase our liability. For any such change, we will not contest the change after it has been in effect during the Insured's lifetime for two years from the date it takes effect.

ASSIGNMENT

     We will not be deemed to know of an assignment unless we receive it, or a copy of it, at our Home Office. We are not obliged to see that an assignment is valid or sufficient. This contract may not be assigned to another insurance company or to any employee benefit plan without our consent. This contract may not be assigned if such assignment would violate any federal, state, or local law or regulation prohibiting sex distinct rates for insurance.

ANNUAL REPORT

     Each year we will send you a report. It will show: (1) the current death benefit; (2) the amount of the contract fund in each investment option; (3) the net cash value; (4) premiums paid, investment results, and charges deducted since the last report; (5) any withdrawals since the last report; and (6) any contract debt and the interest on the debt for the prior year. The report will also include any other data that may be currently required where this contract is delivered. No report will be sent if this contract is being continued under fixed reduced paid-up insurance or extended term insurance.

     You may ask for a similar report at some other time during the year. Or you may request from time to time a report projecting results under your contract on the basis of premium payment assumptions and assumed investment results. We have the right to make a reasonable charge for reports such as these that you ask for and to limit the scope and frequency of such requests.

INCREASE IN FACE AMOUNT AT AGE 21 FOR CONTRACTS ISSUED AT AGE 14 OR LOWER

     If this contract was issued at age 14 or lower, it shows on page 3 an increase in face amount at attained age 21 which applies if the contract is not then in default beyond its days of grace. In that case, any references in the contract to face amount or death benefit which apply at or after attained age 21 will be based on the increased face amount, unless otherwise stated.

PAYMENT OF DEATH CLAIM

     If we settle this contract in one sum as a death claim, we will usually pay the proceeds within seven days after we receive at our Home Office proof of death and any other information we need to pay the claim. But we have the right to postpone paying the part of the proceeds in excess of the face amount that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying the remainder of any excess for up to six months.

CHANGE IN PLAN

     You may be able to have this contract changed to another plan of life insurance either with us or with a subsidiary of ours. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

(VALA--88)                                                                           Page 7

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

BENEFICIARY

     You may designate or change a beneficiary. Your request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office; this will be after you send the contract to us to be endorsed, if we ask you to do so. Then any previous beneficiary's interest will end as of the date of the request. It will end then even if the Insured is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know.

     When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. To show priority, we may use numbered classes, so that the class with first priority is called class 1, the class with next priority is called class 2, and so on. When we use numbered classes, these statements apply to beneficiaries unless the form states otherwise:

     1. One who survives the Insured will have the right to be paid only if no one in a prior class survives the Insured.

     2. One who has the right to be paid will be the only one paid if no one else in the same class survives the Insured.

     3. Two or more in the same class who have the right to be paid will be paid in equal shares.

     4. If none survives the Insured, we will pay in one sum to the Insured's estate.

     Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. We owe Jane the proceeds if she is living at the Insured's death. We owe Paul and John the proceeds if they are living then but Jane is not. But if only one of them is living, we owe him the proceeds. If none of them is living we owe the Insured's estate.

     Beneficiaries who do not have a right to be paid under these terms may still have a right to be paid under the Automatic Mode of Settlement.

     Before we make a payment, we have the right to decide what proof we need of the identity, age or any other facts about any persons designated as beneficiaries. If beneficiaries are not designated by name and we make payment(s) based on that proof, we will not have to make the payment(s) again.

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

PREMIUM PAYMENT AND REINSTATEMENT

PAYMENT OF PREMIUMS

     Premiums may be paid at our Home Office or to any of our authorized agents.  If we are asked to do so, we will give a signed receipt.

     Premium payments will in most cases be credited as of the date of receipt at our Home Office. In the following cases, part or all of a premium payment will be credited as of a date other than the date of receipt:

     1. If the first premium payment is received after the contract date, the scheduled portion will be credited as of the contract date.

(VALA--88)                                                                           Page 8

     2. If the first premium payment is received before the contract date, it will be credited as of the contract date.

     3. If a premium payment is received during the 61-day period after a scheduled premium due date and the premium account is negative by no more than the scheduled premium then due, the portion of the payment needed to bring the premium account up to zero will be credited to the premium account, but not the contract fund, as of the due date.

     4. If the contract is in default and premium payments are received during the days of grace while the contract is in default, we will credit to the contract fund and the premium account those parts of the premium payments needed to end the default status as of the applicable monthly dates.

BASIC PREMIUMS

     We show the amount and frequency of the basic premiums in the Schedule of Premiums in the contract data pages. An increase or decrease in the face amount will change the basic premiums.

CHARGE FOR APPLICABLE TAXES

     The charge for applicable taxes is a percentage of each premium paid that we set from time to time. It will change only on a contract anniversary.

     At least sixty days before the start of each contract year, we will determine the rate we will charge for that contract year. The rate will be based on the rates of any federal, state or local premium taxes that apply at the last known address of the Insured.

SCHEDULED PREMIUMS

     The scheduled premiums are equal to the basic premiums plus the charge for applicable taxes. The scheduled premiums will change if the basic premiums change or the charge for applicable taxes changes. We show the amount of the first scheduled premium in the Schedule of Premiums. It is due on the contract date. There is no insurance under this contract unless an amount at least equal to the first scheduled premium is paid.

     The scheduled premium is the minimum premium required, at the frequency chosen, to continue the contract in full force if you pay all scheduled premiums when due, you make no withdrawals, and any contract debt does not

exceed the cash value.

     If you wish to pay, on a regular basis, premiums that are higher than the scheduled premiums, we will bill you for the higher amount you choose. Or if you wish, you may from time to time make a premium payment smaller than the scheduled amount, subject to the minimum premium amount shown on page 3.

     If scheduled premiums that are due are not paid, or if smaller payments are made, the contract may then or at some future time go into default. Payment of less than the scheduled premium increases the risk that the contract will end if investment results are not favorable. The conditions under which the contract will be in default are described below.

UNSCHEDULED PREMIUMS

     Except as we state in the next paragraph, unscheduled premiums may be paid at any time during the Insured's lifetime as long as the contract is not in default beyond its days of grace. We show on page 3 the minimum premium we will accept.

     We have the right to limit unscheduled premiums to a total of $10,000 in any contract year. We also have the right to refuse any payment that increases the insurance amount by more than it increases the contract fund.

INVESTED PREMIUM AMOUNT

     This is the portion of each premium paid that we will add to the premium account and the contract fund. It is equal to the premium paid minus the charges described in the contract data pages under Schedule of Deductions from Premium

Payments.

CONTRACT CHANGE DATE(S)

     We show the contract change date(s) in the contract data pages. We also show in the Schedule of Premiums on these pages that the amount of each basic premium will change on each contract change date and what the new premium will be. However, when a contract change date arrives we will compute a new premium amount to be used in calculating the premium account. The new premium that we compute will be no greater than the new premium for that date which we show in the contract data pages. In addition, if the premium account is less than zero, we will set the premium account to zero.

(VALA--88)                                                                           Page 9

     The Schedule of Premiums may show that the premium changes at times other than contract change dates. This may occur, for example, with a contract issued with extra benefits or in an extra rating class.

ALLOCATIONS

     You may allocate all or a part of your invested premium amount to one or more of the investment options listed in the contract data pages. You may choose to allocate nothing to a particular investment option. But any allocation you make must be at least 10%; you may not choose a fractional percent.

     Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or any percentage that is not a whole number. The total for all investment

options must be 100%.

     The initial allocation of invested premium amounts is shown in the contract data pages. You may change the allocation for future invested premium amounts at any time if the contract is not in default. To do so, you must notify us in a form that meets our needs. The change will take effect on the date we receive your notice at our Home Office.

     A premium might be paid when the contract fund is less than zero. In that case we first use as much of the invested premium amount as we need to bring the fund up to zero. We will then allocate any remainder of the invested premium amount in accord with your most recent request.

PREMIUM ACCOUNT

     On the contract date, the premium account is equal to the invested premium amount credited on that date, minus the basic premium then due, plus the charge for payment processing. On any other day, the premium account is equal to:

     1. what it was on the prior day; plus

     2. if the premium account was greater than zero on the prior day, interest on the excess at 4% a year; minus

     3. if the premium account was less than zero on the prior day, interest on the deficit at 4% a year; plus

     4. any invested premium amount credited on that day; minus

     5. any basic premium due on that day less the charge for payment processing; minus

     6. any withdrawals on that day.

     If we credit a part of a payment as of an earlier date, as we describe under Payment of Premiums, the premium account for all days from the crediting date to the date of receipt will be recalculated.

DEFAULT

     Unless the contract is already in the grace period, we will determine on each monthly date whether the contract is in default. To do so, we will first deduct any applicable charges from the contract fund and add any applicable credits to it (the contract fund is described on page 16). We will then compute the amount which will grow to equal the tabular contract fund on the next monthly date if, during the current contract month: (1) any investment results are at the assumed rate and (2) we receive no premiums or loan repayments, make no loans and grant no withdrawals. We will compare this amount to the contract fund.

     If this amount is more than the contract fund, the difference is the fund deficit. In this case the contract is in default if the premium account is also less than zero.

(VALA--88)                                                                           Page 10

GRACE PERIOD

     The days of grace begin on any monthly date, other than the contract date, on which the contract goes into default. Within 30 days after any default we will send you a notice that your contract is in default. We will indicate the minimum payment required to bring the contract out of default and the length of the grace period for making that payment.

     We grant at least 61 days of grace from the date we mail you a notice of default. During the days of grace we will continue to accept premiums and make the charges we have set.

     If at any time during the days of grace we have received payments that in total are at least equal to the lesser of (a) the sum of the fund deficit on the date of default and any additional fund deficits on any subsequent monthly dates since the date of default, and (b) the sum of the amount by which the premium account is negative on the date of default and any scheduled premiums due since the date of default, the default will end.

     If at any time during the days of grace we have received payments that in total are at least equal to the lesser of (a) the fund deficit on the date of default, and (b) the amount by which the premium account is negative on the date of default, but that are insufficient to end the default, here is what we will do. We will determine a new default date which is the monthly date after the old default date. We will grant at least 61 days of grace from the new default date.

     If the contract is still in default when the days of grace are over, it will end and have no value, except as we state under Contract Value Options (see page 18). Any premiums paid during the days of grace will remain in the contract fund.

     The Insured might die in the days of grace while the contract is in default. If so, the amount needed to bring the contract out of default is due us. We will make an adjustment so that the proceeds will not include that amount.

     This contract might have an extra benefit that insures someone other than the Insured. And there might be a claim under that benefit while the Insured is living and in the days of grace while the contract is in default. In this case, we will subtract the amount needed to bring the contract out of default before we settle the claim.

REINSTATEMENT

     If this contract is still in default after the last day of grace, you may reinstate it. All these conditions must be met:

     1. The contract must not be in default more than five years.

     2. You must not have surrendered the contract for its net cash value.

     3. You must give us any facts we need to satisfy us that the Insured is insurable for the contract.

     4. We must be paid a premium at least equal to the amount required to bring the premium account up to zero on the first monthly date on which a scheduled premium is due after the date of reinstatement.

     5. If before reinstatement the contract is in force as reduced paid-up insurance (see page 19), any contract debt under reduced paid-up insurance must be repaid with interest or carried over to the reinstated contract.

(VALA--88)                                                                           Page 11

     If we approve the reinstatement, these statements apply. The date of reinstatement will be the date of your request or the date the required premium is paid, if later. We will start to make daily and monthly charges and credits again as of the date of reinstatement. We will deduct from the premium paid the charges from premium payments described in the contract data pages, and any charges in arrears, other than the charge for expected mortality, with 4% interest to the date of reinstatement. The contract fund will be equal to the remainder, plus the cash value of the contract immediately before reinstatement, plus a refund of that part of any surrender charge deducted at the time of default which would be charged if the contract were surrendered immediately after reinstatement.

     If we consent, you may be able to reinstate the contract for a premium less than that described above. We will deduct the same charges and adjust the contract fund in the same manner. In that case, the premium account will be less than zero and you may need to pay more than the scheduled premiums to guarantee that the contract will not go into default again at some future time.

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

FACE AMOUNT CHANGES AND WITHDRAWALS

FACE AMOUNT

     The face amount is shown on page 3. It will change if: (1) you increase or decrease it, or (2) you make a withdrawal.

INCREASE IN FACE AMOUNT

     After the first contract year, you may increase the face amount once each contract year. You may do so subject to all these conditions and the paragraph that follows:

     1. You must ask for the increase in writing in a form that meets our needs; if you are not the Insured and the Insured is age 8 or over, he or she must sign the form too.

     2. The amount of the increase must be at least equal to the minimum increase in face amount, which we show on page 3.

     3. You must give us any facts we need to satisfy us that the Insured is insurable for the amount of the increase.

     4. If we ask you to do so, you must send us the contract to be endorsed.

     5. The contract must not be in default.

     6. We must not since the issue date, have changed the basis on which benefits and charges are calculated under newly issued contracts.

     7. You must make any required payment.

     8. The Insured must be eligible for the same rating class and benefits as shown on page 3.

     9. We must not be waiving premiums in accord with any waiver of premium benefit that may be included in the contract.

     An increase will take effect only if we approve your request for it at our Home Office. If we approve the increase, we will recompute the contract's basic premiums, maximum surrender charges, tabular values, monthly deductions, and expense charges. We will send you new contract data pages showing the amount and effective date of the increase and the recomputed values. If the Insured is not living on the effective date, the increase will not take effect.

(VALA--88)                                                                           Page 12

DECREASE IN FACE AMOUNT

     After the first contract year, you may decrease the face amount. You may do so subject to all these conditions and the paragraphs that follow:

     1 . You must ask for the decrease in writing in a form that meets our needs.

     2. The amount of the decrease must be at least equal to the minimum decrease in face amount, which we show on page 3.

     3. The face amount after the decrease must be at least equal to the minimum face amount, which we show on page 3.

     4. If we ask you to do so, you must send us the contract to be endorsed.

     A decrease will take effect only if we approve your request for it at our Home Office. If we approve the decrease, we will recompute the contract's basic premiums, maximum surrender charges, tabular values, monthly deductions, and expense charges. A decrease in face amount may also affect the amount of any extra benefits this contract might have. We will send you new contract data pages showing the amount and effective date of the decrease and the recomputed values. If the Insured is not living on the effective date, the decrease will not take effect.

     We may deduct an administrative fee of up to $15.00, and a proportionate part of any then applicable surrender charge from the contract fund.

WITHDRAWALS

     You may make withdrawals from the contract. You may do so subject to all these conditions and the paragraphs that follow:

     1. You must ask for the withdrawal in writing in a form that meets our needs.

     2. The amount withdrawn, plus the net cash value after withdrawal, may not be more than the net cash value before withdrawal.

     3. The contract fund after withdrawal must not be less than the tabular contract fund for the new face amount.

     4. You may not withdraw less than $2,000 at any one time.

     5. You may make up to four withdrawals in any contract year.

     6. The face amount after the withdrawal must be at least equal to the minimum face amount, which we show on page 3.

     7. If we ask you to do so, you must send us the contract to be endorsed.

     We may deduct an administrative fee of up to $15.00, and a proportionate part of any then applicable surrender charge, based on the reduction in the face amount described below, from the contract fund.

     We will decrease the face amount by not more than the amount of the withdrawal. We will recompute the contract's basic premiums, maximum surrender charges, tabular values, monthly deductions, and expense charges. The decrease in face amount may also affect the amount of any extra benefit this contract might have. We will send you new contract data pages showing the recomputed values.

(VALA--88)                                                                           Page 13

     We will normally pay any withdrawal within seven days after we receive your request and, if we ask for it, the contract at our Home Office. But we have the right to defer paying the part of the withdrawal that is to come from any variable investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the withdrawal for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year.

     An amount withdrawn may not be repaid, except as a premium subject to charges.

     We will tell you how much you may withdraw if you ask us.

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

DIVIDENDS

PARTICIPATION

     We will decide each year what part, if any, of our surplus to credit to this contract as a dividend.

     While the contract is in force other than as extended or reduced paid-up insurance, it will be eligible for such a dividend if the Insured is living. We will credit any such dividend on the anniversary. We do not expect to credit any dividends to this contract.

DIVIDEND OPTIONS

     If you ask us in writing and in a form that meets our needs, you may choose any of these uses for any such dividend:

     1. Cash.--We will pay it to you in cash.

     2. Premium Reduction.--We will use it to reduce any premium then required.  If no premium is then required, we will apply the dividend under dividend option 3.

     3. Dividend Addition.--We will use it at the net single premium rate as of the anniversary to provide a dividend addition, which is paid-up life insurance on the Insured's life.

     4. Accumulation.--We will hold it at interest. The rate will be at least 3% a year. We may use a higher rate.

     If you have not made another choice by 31 days after the anniversary, we will use the dividend as we state under dividend option 3. But if the contract is in default at the end of the last day of grace, we will use the dividend as we state under Contract Value Options. You may surrender any of the above additions or accumulations for their net value if: (1) we have not included them in the net cash value used to provide extended or reduced paid-up insurance; (2) we do not need them as security for contract debt; and (3) we have your request in writing in a form that meets our needs. The surrender value of those additions will not be less than the dividends we used to provide them.

     While the contract is in force as reduced paid-up insurance, it will be eligible for a dividend if the Insured is living. We will credit any such dividend on the anniversary as a paid-up life insurance addition on the Insured's life.

(VALA--88)                                                                           Page 14

DIVIDEND CREDITS DESCRIBED

     The phrase dividend credits means the total of: (1) either the amount or value, as we explain in the next sentence, of any dividend additions under dividend option 3 or on reduced paid-up insurance; (2) any dividends and interest we hold under dividend option 4; and (3) any other dividends we have credited to the contract but have not yet used or paid. For dividend additions, the phrase means the amount of any of those additions when we set the amount of any extended insurance and when we refer to the proceeds that arise from the Insured's death; the phrase means the net value of any of those additions when we refer to loans, net cash values, or the proceeds that arise on surrender.

SETTLEMENT

     We will include any dividend credits in the amount payable when we settle the contract.

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

SEPARATE ACCOUNTS

SEPARATE ACCOUNT

     The words separate account, when we use them in this contract without qualification, mean any separate account we establish to support variable life insurance contracts like this one. We list the separate accounts available to you in the contract data pages. We may establish additional separate accounts.  We will notify you within one year if we do so.

     A separate account may or may not be registered with the SEC under the Investment Company Act of 1940. The contract data pages will tell you whether or not a particular separate account is so registered.

VARIABLE INVESTMENT OPTIONS

     A separate account may offer one or more variable investment options. We list them in the contract data pages. We may establish additional variable investment options. We will notify you within one year if we do so.

     Income and realized and unrealized gains and losses from assets in each variable investment option are credited to, or charged against, that variable investment option. This is without regard to income, gains, or losses in our other investment accounts.

SEPARATE ACCOUNT INVESTMENTS

     We may invest the assets of different separate accounts in different ways.  But we will do so only with the consent of the SEC and, where required, of the insurance regulator where this contract is delivered.

     We will always keep assets in the separate accounts with a total value at least equal to the amount of the variable investment options under contracts like this one. To the extent those assets do not exceed that amount, we use them only to support those contracts; we do not use those assets to support any other business we conduct. We may use any excess over that amount in any way we choose.

     We will determine the value of the assets in each separate account and any variable investment option at regular intervals.

(VALA--88)                                                                           Page 15

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

FIXED INVESTMENT OPTIONS

     You may allocate all or part of your invested premium amount to a fixed investment option. Fixed investment options are credited with interest as described under Guaranteed Interest and Excess Interest on page 17.

     We may establish additional fixed investment options. We will notify you within one year if we do so.

- ----------------------------------------------------------------------------------------------------------------------------------------------------------

TRANSFERS

     Four transfers may be made in a policy year. There is no charge for these transfers.

     You may transfer amounts into or out of variable investment options of separate accounts registered under the Investment Company Act of 1940 and into the fixed investment options at any time if the contract is not in default or if the contract is being continued under the variable reduced paid-up option. Other transfers are allowed only with our consent.

     In addition, the entire amount in all investment options may be transferred to a fixed investment option at any time within the first two contract years.

     To make a transfer, you must notify us in a form that meets our needs. The transfer will take effect on the date we receive your notice at our Home Office.

- ----------------------------------------------------------------------------------------------------------------------------------------------------------

INSURANCE AMOUNT

     The insurance amount on any date is equal to the greater of: (1) the face amount, and (2) the contract fund, before deduction of any monthly charges due on that date, divided by the net single premium per $1 at the Insured's attained

age.

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT FUND

CONTRACT FUND DEFINED

     On the contract date the contract fund is equal to the invested premium amounts credited on that date, minus any of the charges described below which may be due on that date. On any day after that the contract fund is equal to what it was on the previous day, plus any invested premium amounts credited that day, plus these items:

     (a) any increase due to investment results in the value of the variable investment options;

     (b) guaranteed interest on that portion of the contract fund that is not in a variable investment option; and

     (c) any excess interest on that portion of the contract fund that is not in a variable investment option;

(VALA--88)                                                                           Page 16

and minus any of these items applicable on that day:

     (d) any decrease due to investment results in the value of the variable investment options;

     (e} a charge against the variable investment options at a rate of not more than 0.00245475% a day (0.90% a year) for mortality and expense risks that we assume;

     (f) any amount charged against the variable investment options for federal or state income taxes;

     (g) any charge for expected mortality;

     (h) any charge for extra rating class;

     (i) any charge for extra benefits;

     (j) any charge for administration;

     (k) any charge for sales expenses;

     (l) any charge to guarantee the minimum death benefit;

     (m) any withdrawals; and

     (n) any surrender charges, administrative charges, or contract debt cancelled that may result from a withdrawal, a decrease in face amount, or a change in status to variable reduced paid-up insurance.

     We describe under Reinstatement on page 11 what the contract fund will be on any reinstatement date. There is no contract fund for a contract in force as extended insurance or fixed reduced paid-up insurance.

GUARANTEED INTEREST

     We will credit interest each day on any portion of the contract fund not in a variable investment option. We will credit 0.01074598% a day, which is equivalent to an effective rate of 4% a year.

EXCESS INTEREST

     We may credit excess interest, that is, interest in addition to the guaranteed interest, on any portion of the contract fund not in a variable investment option. The rate of any excess interest will be determined from time to time and will continue thereafter until a new rate is determined. We may use different rates of excess interest for different portions of the contract fund.  We may from time to time guarantee rates of excess interest on some portions of the contract fund.

CHARGE FOR EXPECTED MORTALITY

     On each monthly date, we will deduct a charge for expected mortality. The maximum amount we can deduct is computed as the maximum monthly mortality rate multiplied by the coverage amount. The coverage amount is the difference between the insurance amount and the adjusted contract fund. The adjusted contract fund is equal to the tabular contract fund at the end of the contract year multiplied by 0.980517829, plus the contract fund before deduction of any monthly charges due on the monthly date, minus the tabular contract fund on the monthly date.

     The maximum monthly mortality rates are based on the Insured's sex, rating class, and attained age and are shown in the contract data pages. We may use lower rates. At least once every five years, but not more often than once a year, we will consider the need to change to rates. We will change them only if we do so for all contracts like this one dated in the same year as this one.

(VALA--88)                                                                           Page 17

CHARGE FOR EXTRA RATING CLASS

     If the contract is not in default past its days of grace and there is an extra charge because of the rating class of the Insured, we will deduct it from the contract fund on each monthly date. The maximum amount of any charge is included in the amount shown in the contract data pages under Schedule of Monthly Deductions from the Contract Fund.

CHARGE FOR EXTRA BENEFITS

     If the contract has extra benefits, we will deduct the charges for them from the contract fund on each monthly date. The maximum amount of any such charges are included in the amount shown in the contract data pages under Schedule of Monthly Deductions from the Contract Fund.

CHARGES FOR ADMINISTRATION, SALES EXPENSES AND MINIMUM DEATH BENEFIT GUARANTEE

     If the contract is not in default past its days of grace, we will deduct a charge for administration and a charge for sales expenses. We will also deduct a charge for guaranteeing that the investment performance of the variable investment options will not reduce the death benefit below the face amount provided scheduled premiums are paid when due and you make no loans or withdrawals. We show the maximum amount of these charges in the contract data pages under Schedule of Monthly Deductions from the Contract Fund.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT VALUE OPTIONS

BENEFIT AFTER THE GRACE PERIOD

     If the contract is in default beyond its days of grace, we will use any net cash value to keep the contract in force as one of three kinds of insurance:

     1. Extended insurance applies to most contracts.

     2. Fixed reduced paid-up insurance always applies if we issued the contract in a rating class for which we do not provide extended insurance; in this case, the phrase No Extended Insurance will appear under the heading Rating Class in the contract data pages.

     3. Variable reduced paid-up insurance applies if the amount of paid-up insurance would be at least as great as the amount of extended insurance and the contract was issued in a rating class permitting extended insurance.

     We describe each kind of insurance below. Any extra benefit will end as soon as the contract is in default past its days of grace, unless the form that describes the extra benefit states otherwise.

EXTENDED INSURANCE

     This will be term insurance on the Insured's life. We will pay the amount of term insurance if the Insured dies in the term we describe below. Before the end of the term there will be cash values but no loan value.

     The amount of term insurance will be: (1) the insurance amount, plus (2) any dividend credits minus (3) any contract debt. The term is a period of time that will start on the day the contract went into default. The length of the term will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.

(VALA--88)                                                                           Page 18

     There may be extra days of term insurance. This will occur if, on the day the contract goes into default, the term of extended insurance provided by the net cash value does not exceed 90 days, or the number of days the contract was in force before the default began, if less. The number of extra days will be: (1) 90, or the number of days the contract was in force before the default began, if less, minus (2) the number of days of extended insurance that would be provided by the net cash value if there were no contract debt. The extra days, if any, start on the day after the last day of term insurance provided by the net cash value, if any. If there is no such term insurance, they start on the day the contract goes into default. The term insurance for the extra days has no cash value. There will be no extra days if you replace the extended insurance with reduced paid-up insurance or you surrender the contract before the extra days start.

FIXED REDUCED PAID-UP INSURANCE

     This will be paid-up life insurance on the Insured's life. We will pay the amount of this insurance when the Insured dies. There will be cash values and loan values.

     The amount of this insurance will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.

VARIABLE REDUCED PAID-UP INSURANCE

     This will be paid-up variable life insurance on the Insured's life. We will pay the amount of this insurance when the Insured dies. The death benefit may change from day to day, as we explain below, but if there is no contract debt it will not be less than the minimum guaranteed amount. There will be cash values and loan values.

     The minimum guaranteed amount of insurance will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.  The amount payable in the event of death will be the greater of (a) the minimum guaranteed amount, and (b) the contract fund divided by the net single premium per $1 at the Insured's attained age. In either case the amount will be

adjusted for any contract debt.

     The variable reduced paid-up insurance option will be available only if the minimum guaranteed amount under the option is at least $5,000 and if we issued the contract in a rating class permitting extended insurance.

COMPUTATIONS

     We will make all computations for any of these benefits as of the date the contract goes into default. But we will consider any dividend credits you surrender, any loan you take out or pay back, or any premium payments, withdrawals, or changes in face amount you make in the days of grace.

(VALA--88)                                                                           Page 19

OPTIONAL BENEFIT

     You may choose to replace any extended insurance that has a cash value by fixed reduced paid-up insurance or by variable reduced paid-up insurance if it is available. To make this choice, you must do so in writing in a form that meets our needs not more than three months after the date the contract goes into default. You must also send the contract to us to be endorsed.

CASH VALUE OPTION

     You may surrender this contract for its net cash value. The net cash value at any time is the cash value at that time less any contract debt. To surrender this contract, you must ask us in writing in a form that meets our needs. You must also send the contract to us. Here is how we will compute the net cash value:

     1. If the contract is not in default, the net cash value on any date will be the contract fund, before deduction of any monthly charges due on that date, minus any surrender charge, plus any dividend credits, minus any contract debt.  The Schedule of Maximum Surrender Charges for this contract is in the contract data pages.

     2. If the contract is in default during its days of grace, we will compute the net cash value as of the date the contract went into default. But we will adjust this value for any dividend credits you surrender, any loan you take out or pay back, and any premium payments, withdrawals, or decreases in face amount you make in the days of grace.

     3. If the contract is in default beyond its days of grace, the net cash value will be either: (1) the net value on that date of any extended insurance benefit then in force, or (2) the net value on that date of any reduced paid-up insurance benefit then in force, including any dividend credits, less any contract debt.

     Within thirty days after an anniversary, the net cash value of any extended insurance or fixed reduced paid-up insurance will not be less than the value on that anniversary adjusted for any dividend credits you surrender and any loan you take out or pay back in those thirty days.

     We will usually pay any net cash value within seven days after we receive your request and the contract at our Home Office. But we have the right to defer paying the part of the proceeds that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year.

TABULAR VALUES

     We show tabular contract fund values and tabular cash values at the ends of contract years in the contract data pages.

     If we need to compute tabular values at some time during a contract year, we will count the time since the start of the year. We will let you know the tabular values for other durations if you ask for them.

(VALA--88)                                                                           Page 20

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

LOANS

LOAN REQUIREMENTS

     You may borrow from us on the contract. All these conditions must be met:

     1. The Insured must be living.

     2. The contract must be in force other than as extended insurance.

     3. The contract debt will not be more than the loan value.

     4. As sole security for the loan, you assign the contract to us in a form that meets our needs.

     5. Except to pay premiums on this contract, you may not borrow less than $200 at any one time.

     If there is already contract debt when you borrow from us, we will add the new amount you borrow to that debt.

CONTRACT DEBT

     Contract debt at any time means the loan on the contract, plus the interest we have charged that is not yet due and that we have not yet added to the loan.

     Example 1: Suppose the contract has a loan value of $6,000. A few months ago you borrowed $1,500. By now there is interest of $55 charged but not yet due. The contract debt is now $1,555, which is made up of the $1,500 loan and the $55 interest.

LOAN VALUE

     You may borrow any amount up to the difference between the loan value and any existing contract debt. Except as we state in the next paragraph, the loan value at any time is equal to the sum of (a) 90% of the portion of the cash value that is attributable to the variable investment options, and (b) the balance of the cash value.

     There are two exceptions. The first is that, if the contract is in default, the loan value during the days of grace is what it was on the date of default adjusted for any dividend credits you surrender and any premium payments, withdrawals, or decreases in face amount you make in the days of grace. The second is that, if the contract is in force as fixed reduced paid-up insurance, the loan value is equal to the amount that would grow at interest to equal the cash value on the next anniversary.

     Example 2: Suppose, in example 1, you want to borrow all that you can. We will lend you $4,445 which is the difference between the $6,000 loan value and the $1,555 contract debt. This will increase the contract debt to $6,000. We will add the new amount borrowed to the existing loan and will charge interest on it, too.

INTEREST CHARGE

     You may select either the fixed loan rate option or the variable loan rate option. Both are described below. We show on page 3 the option you have selected. If you request a change from one option to the other and we agree, we will tell you the effective date of the change.

     We charge interest daily on any loan. Interest is due on each contract anniversary, or when the loan is paid back, whichever comes first. If interest is not paid when due, it becomes part of the loan. Then we start to charge interest on it, too.

(VALA--88)                                                      Page 21

     Example 3: Suppose the contract date is in 1988. Six months before the anniversary in 1997 you borrow $1,600 out of a $4,000 loan value. We charge 5-1/2% a year. Three months later, but still three months before the anniversary, we will have charged about $22 interest. This amount will be a few cents more or less than $22 since some months have more days than others. The interest will not be due until the anniversary unless the loan is paid back sooner. The loan will still be $1,600. The contract debt will be $1,622, since contract debt includes interest charged but not yet due.

     On the anniversary in 1997 we will have charged about $44 interest. The interest will then be due.

     Example 4: Suppose the $44 interest in example 3 was paid on the anniversary. The loan and contract debt each became $1,600 right after the payment.

     Example 5: Suppose the $44 interest in example 3 was not paid on the anniversary. The interest became part of the loan, and we began to charge interest on it, too. The loan and contract debt each became $1,644.

FIXED LOAN RATE OPTION

     The loan interest rate is 5-1/2% a year.

VARIABLE LOAN RATE OPTION

     The loan interest rate is the annual rate we set from time to time. The rate will never be greater than is permitted by law. It will change only on a contract anniversary.

        Before the start of each contract year, we will determine the loan interest rate we can charge for that contract year. To do this, we will first find the rate that is the greater of: (1) The Published Monthly Average (which we describe below) for the calendar month ending two months before the calendar month of the contract anniversary; and (2) 5%.

     If that greater rate is at least 1/2% more than the loan interest rate we had set for the current contract year, we have the right to increase the loan interest rate by at least 1/2%, up to that greater rate. If it is at least 1/2% less, we will decrease the loan interest rate to be no more than the greater rate. We will not change the loan interest rate by less than 1/2%.

     When you make a loan we will tell you the initial interest rate for the loan. We will send you a notice if there is to be an increase in the rate.

     The Published Monthly Average means:

     1. Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc. or any successor to that service; or

     2. If that average is no longer published, a substantially similar average, established by the insurance regulator where this contract is delivered.

REPAYMENT

     All or part of any contract debt may be paid back at any time while the Insured is living. But if there is contract debt at the end of the last day of grace when the contract is in default, it will be deducted from the cash value to determine the net cash value. When we settle the contract, any contract debt is due us. We will make an adjustment so that the proceeds will not include the amount of that debt.

EFFECT OF A LOAN

     When you take a loan, the amount of the loan continues to be part of the contract fund and is credited with interest at the guaranteed rate of 4% a year.  If you have selected the variable loan rate option, we will credit excess interest at an effective rate of not less than the loan interest rate for the contract year less 5%.

     We will reduce the portion of the contract fund allocated to the investment options by the amount you borrow, and by loan interest that becomes part of the loan because it is not paid when due.

(VALA--88)                                                                           Page 22

     On each transaction date, if there is a contract loan outstanding, we will increase the portion of the contract fund in the investment options by interest credits accrued on the loan since the last transaction date. When you repay all or part of a loan we will increase the portion of the contract fund in the investment options by the amount of loan you repay, plus interest credits accrued on the loan since the last transaction date. We will not increase the portion of the contract fund allocated to the investment options by loan interest that is paid before we make it part of the loan.

EXCESS CONTRACT DEBT

     If contract debt ever grows to be equal to or more than the cash value, all the contract's benefits will end 61 days after we mail a notice to you and any assignee we know of. Also, we may send a notice to the Insured's last known address. In the notice we will state the amount that, if paid to us, will keep the contract's benefits from ending for a limited time.

POSTPONEMENT OF LOAN

     We will usually make a loan within seven days after we receive your request at our Home Office. But we have the right to postpone making the part of the loan that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds of a loan for up to six months, unless it will be used to pay premiums on this or other contracts with us.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

SETTLEMENT OPTIONS

PAYEE DEFINED

     In these provisions and under the Automatic Mode of Settlement, the word payee means a person who has a right to receive a settlement under the contract.  Such a person may be the Insured, the owner, a beneficiary, or a contingent

payee.

CHOOSING AN OPTION

     A payee may choose an option for all or part of any proceeds or residue that becomes payable to him or her in one sum. We describe residue on page 24.

     In some cases, a payee will need our consent to choose an option. We describe these cases under Conditions.

OPTIONS DESCRIBED

     Here are the options we offer. We may also consent to other arrangements.

OPTION 1 (INSTALMENTS FOR A FIXED PERIOD)

     We will make equal payments for up to 25 years based on the Option 1 Table.  The payments will include interest at an effective rate of 3-1/2% a year. We may credit more interest. If and while we do so, the payments will be larger.

OPTION 2 (LIFE INCOME)

     We will make equal monthly payments for as long as the person on whose life the settlement is based lives, with payments certain for the period chosen. The choices are either ten years (10-Year Certain) or until the sum of the payments equals the amount put under this option (Instalment Refund). The amount of each payment will be based on the Option 2 Table and on the sex and age, on the due date of the first payment, of the person on whose life the settlement is based. But if a choice is made more than two years after the contract proceeds first become payable, we may use the Option 2 rates in ordinary policies we regularly issue, based on United States currency, on the due date of the first payment. On request, we will quote the payment rates in policies we then issue. We must have proof of the date of birth of the person on whose life the settlement is based. The settlement will share in our surplus to the extent and in the way we decide.

(VALA--88)                                                                           Page 23

OPTION 3 (INTEREST PAYMENT)

     We will hold an amount at interest. We will pay interest at an effective rate of at least 3% a year ($30.00 annually, $14.89 semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more interest.

OPTION 4 (INSTALMENTS OF A FIXED AMOUNT)

     We will make equal annual, semi-annual, quarterly or monthly payments if they total at least $90 a year for each $1,000 put under this option. We will credit the unpaid balance with interest at an effective rate of at least 3-1/2% a year. We may credit more interest. If we do so, the balance will be larger.  The final payment will be any balance equal to or less than one payment.

OPTION 5 (NON-PARTICIPATING INCOME)

     We will make payments like those of any annuity we then regularly issue that: (1) is based on United States currency; (2) is bought by a single sum; (3) does not provide for dividends; and (4) does not normally provide for deferral of the first payment. The payment will be at least what we would pay under that kind of annuity with its first payment due on its contract date. At least one of the persons on whose life the Option 5 is based must be a payee. If a life income is chosen, we must have proof of the date of birth of any person on whose life the option is based. Option 5 cannot be chosen more than 30 days before the due date of the first payment. On request, we will quote the payment that would

apply for any amount placed under the option at that time.

FIRST PAYMENT DUE DATE

     Unless a different date is stated when the option is chosen: (1) the first payment for Option 3 will be due at the end of the chosen payment interval; and (2) the first payment for any of the other options will be due on the date the option takes effect.

RESIDUE DESCRIBED

     For Options 1 and 2, residue on any date means the then present value of any unpaid payments certain. We will compute it at an effective interest rate of 3-1/2% a year. But we will use the interest rate we used to compute the actual Option 2 payments if they were not based on the table in this contract.

     For Options 3 and 4, residue on any date means any unpaid balance with interest to that date.

     For Option 5, it means the then present value of any unpaid payments certain. We will compute it at the interest rate to which we refer in Option 5.

     For Option 2 and 5, residue does not include the value of any payments that may become due after the certain period.

WITHDRAWAL OF RESIDUE

     Unless otherwise stated when the option is chosen: (1) under Options l and 2, the residue may be withdrawn; and (2) under Options 3 and 4 all, or any part not less than $100, of the residue may be withdrawn. If an Option 3 residue is reduced to less than $1,000, we have the right to pay it in one sum. Under Option 2, withdrawal of the residue will not affect any payments that may become due after the certain period; the value of those payments cannot be withdrawn.  Instead, the payments will start again if they were based on the life of a person who lives past the certain period.

     For Option 5, the residue may not be withdrawn while the payee and any other person on whose life the option is based is living. But, unless otherwise stated, when the option is chosen, after the death of the last of them to die any residue not already paid in one sum may be withdrawn.

(VALA--88)                                                                           Page 24

DESIGNATING CONTINGENT PAYEE(S)

     A payee under an option has the right, unless otherwise stated, to name or change a contingent payee to receive any residue at that payee's death. This may be done only if: (1) the payee has the full right to withdraw the residue, (2) the residue would otherwise have been payable to that payee's estate at death, or (3) a settlement with payments certain is being made in accord with Option 5.

     A payee who has this right may choose, or change the choice of, an option for all or part of the residue. In some cases, the payee will need our consent to choose or change an option. We describe these cases under Conditions.

     Any request to exercise any of these rights must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office. Then the interest of anyone who is being removed will end as of the date of the request, even if the payee who made the request is not living when we file it.

CHANGING OPTIONS

     A payee under Option 1, 3, or 4 may choose another option for any sum that the payee could withdraw on the date the chosen option is to start. That date may be before the date the payee makes the choice only if we consent. In some cases, the payee will need our consent to choose or change an option. We describe these cases next.

CONDITIONS

     Under any of these conditions, our consent is needed for an option to be used for any person:

     1. The person is not a natural person who will be paid in his or her own right.

     2. The person will be paid as assignee.

     3. The amount to be held for the person under Option 3 is less than $1,000.  But we will hold any amount for at least one year in accord with the Automatic Mode of Settlement.

     4. Each payment to the person under the option would be less than $20.

     5. The option is for residue arising other than at (a) the Insured's death, or (b) the death of the beneficiary who was entitled to be paid as of the date of the Insured's death.

     6. The option is for proceeds that arise other than from the Insured's death, and we are settling with an owner or any other person who is not the Insured.

DEATH OF PAYEE

     If a payee under an option dies and if no other distribution is shown, we will pay any residue under that option in one sum to the payee's estate.

(VALA--88)                                                                           Page 25

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

AUTOMATIC MODE OF SETTLEMENT

APPLICABILITY

     These provisions apply to proceeds arising from the Insured's death and payable in one sum to a payee who is a beneficiary. They do not apply to any periodic payment.

INTEREST ON PROCEEDS

     We will hold the proceeds at interest under Option 3 of the Settlement Options provisions. The payee may withdraw the residue. We will pay it promptly on request. We will pay interest annually unless we agree to pay it more often.  We have the right to pay the residue in one sum after one year if: (1) the payee is not a natural person who will be paid in his or her own right; (2) the payee will be paid as assignee; or (3) the original amount we hold under Option 3 for the payee is less than $1,000.

SETTLEMENT AT PAYEE'S DEATH

     If the payee dies and leaves an Option 3 residue, we will honor any contingent payee provision then in effect. If there is none, here is what we will do. We will look to the beneficiary designation of the contract; we will see what other beneficiary(ies), if any, would have been entitled to the portion of the proceeds that produced the Option 3 residue if the Insured had not died until immediately after the payee died. Then we will pay the residue in one sum to such other beneficiary(ies), in accord with that designation. But if, as stated in that designation, payment would be due the estate of someone else, we will instead pay the estate of the payee.

     Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. Jane was living when the Insured died. Jane later died without having chosen an option or naming someone other than Paul and John as contingent payee. If Paul and John are living at Jane's death we owe them the residue. If only one of them is living then, and if the contract called for payment to the survivor of them, we owe him the residue. If neither of them is living then, we owe Jane's estate.

SPENDTHRIFT AND CREDITOR

     A beneficiary or contingent payee may not, at or after the Insured's death, assign, transfer, or encumber any benefit payable. To the extent allowed by law, the benefits will not be subject to the claims of any creditor of any beneficiary or contingent payee.

(VALA--88)                                                                           Page 26

OPTION 1 TABLE

MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY

- --------------------------------------------------------------------------------

           Number of Years               Monthly Payment

- --------------------------------------------------------------------------------

                          1                           $84.65

                          2                            43.05

                          3                            29.19

                          4                            22.27

                          5                            18.12

                          6                            15.35

                          7                            13.38

                          8                            11.90

                          9                            10.75

                          10                            9.83

                          11                            9.09

                          12                            8.46

                          13                            7.94

                          14                            7.49

                          15                            7.10

                          16                            6.76

                          17                            6.47

                          18                            6.20

                          19                            5.97

                          20                            5.75

                          21                            5.56

                          22                            5.39

                          23                            5.24

                          24                            5.09

                          25                            4.96

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

Multiply the monthly amount by 2.989 for quarterly, 5.952 for semi-annual or 11.804 for annual.

- -------------------------------------------------------------------------------------------------------

                                           OPTION 2 TABLE

- -------------------------------------------------------------------------------------------------------

          MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY

- -------------------------------------------------------------------------------------------------------

KIND OF LIFE INCOME                                                                                                                                  &# 160;       KIND OF LIFE INCOME

-------------------------------                                                                                                                                &# 160;           - -------------------------------

AGE LAST BIRTHDAY	10-Year Certain		Instalment Refund		AGE  LAST BIRTHDAY	10-Year Certain		Instalment Refund
	Male	Female	Male	Female		Male	Female	Male	Female

- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10 and under 11 12 13 14   15 16 17 18 19   20 21 22 23 24   25 26 27 28 29   30 31 32 33 34   35 36 37 38 39   40 41 42 43 44   $3.18   3.19 3.20 3.21 3.22   3.24 3.25 3.27 3.28 3.30   3.31 3.33 3.35 3.36 3.38   3.40 3.42 3.45 3.47 3.49   3.52 3.54 3.57 3.60 3.63   3.66 3.69 3.72 3.76 3.80   3.84 3.88 3.92 3.97 4.01   $3.11   3.12 3.13 3.14 3.15   3.16 3.17 3.19 3.20 3.21   3.22 3.24 3.25 3.26 3.28   3.30 3.31 3.33 3.35 3.37   3.39 3.41 3.43 3.45 3.47   3.50 3.52 3.55 3.58 3.61   3.64 3.67 3.70 3.74 3.78   $3.17   3.18 3.19 3.20 3.21   3.23 3.24 3.25 3.27 3.28   3.30 3.32 3.33 3.35 3.37   3.39 3.41 3.43 3.45 3.47   3.49 3.52 3.54 3.57 3.60   3.63 3.66 3.69 3.72 3.75   3.79 3.82 3.86 3.90 3.94   $3.10   3.11 3.12 3.13 3.14   3.15 3.16 3.18 3.19 3.20   3.21 3.23 3.24 3.25 3.27   3.29 3.30 3.32 3.34 3.35   3.37 3.39 3.41 3.44 3.46   3.48 3.50 3.53 3.56 3.55   3.61 3.64 3.67 3.71 3.74   45 46 47 48 49   50 51 52 53 54   55 56 57 58 59   60 61 62 63 64   65 66 67 68 69   70 71 72 73 74   75 76 77 78 79 80 and over $4.06 4.12 4.17 4.23 4.28   4.35 4.41 4.48 4.55 4.62   4.70 4.78 4.86 4.95 5.05   5.15 5.25 5.36 5.48 5.60   5.73 5.87 6.01 6.15 6.30   6.46 6.62 6.79 6.96 7.13   7.30 7.48 7.66 7.83 8.00 8.17 $3.82 3.86 3.90 3.94 3.99   4.04 4.09 4.15 4.21 4.27   4.33 4.40 4.47 4.54 4.62   4.71 4.79 4.89 4.98 5.09   5.20 5.31 5.43 5.56 5.70   5.84 5.99 6.15 6.31 6.49   6.67 6.85 7.04 7.24 7.44 7.64   $3.99 4.03 4.08 4.13 4.18   4.24 4.29 4.35 4.41 4.48   4.55 4.62 4.69 4.77 4.86   4.94 5.03 5.13 5.23 5.34   5.45 5.57 5.70 5.83 5.97   6.11 6.27 6.43 6.60 6.78   6.97 7.17 7.38 7.60 7.83 8.07 $3.78 3.81 3.85 3.90 3.94   3.98 4.03 4.08 4.13 4.19   4.24 4.30 4.37 4.43 4.50   4.58 4.66 4.74 4.82 4.92   5.01 5.11 5.22 5.34 5.46   5.58 5.72 5.86 6.01 6.18   6.35 6.53 6.72 6.93 7.15 7.38  

(VALA--88)                                                                           Page 27

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

ENDORSEMENTS

(Only we can endorse this contract.)

VOTING RIGHTS

        We are a mutual life insurance company. Our principal office is in Newark, New Jersey, and we are incorporated in that State. By law, we have 24 directors. This includes 16 elected by our policyholders (four each year for four year terms), two of our officers, and six public directors named by New Jersey's Chief Justice.

        The election is held on the first Tuesday in April from 10:00 A.M. to 2:00 P.M. in our office at Prudential Plaza, Newark, N.J. After this contract has been in force for one year, you may vote either in person or by mail. We will send you a ballot if you ask for one. Just write to the Secretary at Prudential Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By law, your request must show your name, address, policy number and date of birth. Only individuals at least 18 years old may vote.

HOME OFFICE LOCATIONS

        When we use the term Home Office, we mean any of these Prudential offices:

CORPORATE OFFICE, NEWARK, N.J.                                                                                     NORTH CENTRAL HOME OFFICE,

MINNEAPOLIS, MINN.

EASTERN HOME OFFICE,                                                                           SOUTH-CENTRAL HOME OFFICE,

FORT WASHINGTON, PA.                                                                           JACKSONVILLE, FLA.

   The Prudential Insurance Company of America,

    By   SPECIMEN

       ------------------------

       Secretary

COMB 86184--88

(VALA--88)                                                                           Page 28

ENDORSEMENTS

(Only we can endorse this contract

BASIS OF COMPUTATiON

MORTALITY TABLES DESCRIBED

     Except as we state in the next paragraph, (1) we base all net premiums and net values to which we refer in this contract on the Insured's issue age and sex and on the length of time since the contract date; (2) we use the Commissioners 1980 Standard Ordinary Non-Smokers Mortality Table; and (3) we use continuous functions based on age last birthday.

     For extended insurance, we base net premiums and net values on the Commissioners 1980 Non-Smokers Extended Term Insurance Table.

INTEREST RATE

     For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year.

EXCLUSIONS

     When we compute net values, tabular values, reduced paid-up insurance and extended insurance, we exclude the value of any supplementary benefits and any other extra benefits added by rider to this contract.

VALUES AFTER 20 CONTRACT YEARS

     Tabular values not shown on page 4 will be computed using the standard nonforfeiture method and the mortality tables and interest rate we describe above. We show the nonforfeiture factors in the contract data pages.

MINIMUM LEGAL VALUES

     The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required we have given the insurance regulator a detailed statement of how we compute values and benefits.

     The Prudential Insurance Company of America,

                        By  [SPECIMEN SIGNATURE]

                           ---------------------

                            Secretary

ORD 86185--88

- ----------------------------------------------------===============================================================================

                                              Part 1 Application for Life Insurance to

[LOGO]                                        [X] The Prudential Insurance Company of America

                                              [ ] Pruco Life Insurance Company

                                                  A Subsidiary of The Prudential Insurance Company of America

                                               No. XX XXX XXX

- ------------------------------------------------------------------------------------------------------------

1a. Proposed Insured's name--first, initial, last (Print)              1b. Sex     2a. Date of birth     2b. Age      2c. Place of birth

                                                                                                     M   F            Mo.  Day  Yr.

                                                                                                     [X] [ ]             7      10    52         35         (Name of State)

    JOHN DOE

- ---------------------------------------------------------------------------------------------------------

3. [ ] Single  [X] Married  [ ] Widowed  [ ] Separated  [ ] Divorced   4. Social Security No. XXX/XX/XXXX

- ------------------------------------------------------------------------------------------------------------

5a. Occupation(s)  Clerk                                       5b. Duties        Clerical Duties

- -----------------------------------------------------------------------------------------------------------

6. Address for mail    No.            Street                 City                 State                    Zip

                                  15            Blank Street    (Name of City)   (Name of State)   XXXXX

- ------------------------------------------------------------------------------------------------------------

7a. Kind of policy  Variable Appreciable Life         7b. Initial amount                                   8. Accidental death coverage

             (Level Death Benefit)                                     $50,000 initial amount                           $

 ------------------------------------------------------------------------------------------------------------

9. Beneficiary: (Include name, age and relationship.)   10.List all life insurance on proposed Insured.    Check here if None [ ]

   a. Primary (Class 1):                       Company           Initial               Yr.           Kind                      Medical

      Mary Doe, 35, Spouse                                             amt.            issued    (Indiv., Group)          Yes   No

   ______________________________________                                                                             [ ]   [ ]

   _____________________________________________________________                               [ ]   [ ]

   ______________________________________________________________

    b. Contingent (Class 2) if any:                                                                                                         [ ]   [ ]

       Robert Doe, 10, Son                                 _______________________________                      [ ]   [ ]

___________________________________________________________________                       [ ]   [ ]

- -----------------------------------------------------------------------------------------------------

11. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP)

                                                       Relationship to   Date of birth                       Total life insurance

    Name--first, initial, last                  Sex    proposed Insured  Mo.  Day  Yr.  Age  Place of birth  in all companies

a.                                                          Spouse                                           $

______________________________________________________________________________________________________________

b.                                                                                                           $

______________________________________________________________________________________________________________

c.                                                                                                           $

______________________________________________________________________________________________________________

d.                                                                                                           $

______________________________________________________________________________________________________________

e.                                                                                                           $

_________________________________________________ ____________________________________________________________

f.                                                                                                           $

- ------------------------------------------------------------------------------------------------------------

12. Supplementary benefits and riders:

a. For proposed Insured                               b. For spouse, children, Applicant for AWP

Type and duration of benefit       Amount             Type and duration of benefit                Amount

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

[ ] Option to Purchase Additional Ins. $                           [ ] Applicant's Waiver of Premium benefit

- ------------------------------------------------------------------------------------------------------------

13. State any special request.

- ------------------------------------------------------------------------------------------------------------

14. Has any person named in 1a or 11, within the last 12 months:

    a. been treated by a doctor for or had a known heart attack, stroke or cancer (including melanoma) otherYes   No

       than of the skin? .............................................................................................  [ ]      [X]

    b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? .............................................................................................  [ ]  [X]

- ------------------------------------------------------------------------------------------------------------

15. Premiums payable  [X] Ann.  [ ] Semi-Ann.  [ ] Quar.  [ ] Mon.  [ ] Pay. Budg.  [ ] Pru-Matic  [ ] Gov't. Allot.

- ------------------------------------------------------------------------------------------------------------

16. Amount paid $454.59                                   [ ] None (Must be "None" if either 14a or b is answered "Yes".)

- -----------------------------------------------------------------------------------------------------------

17. Is a medical examination to be made on:                                                Yes   No

    a. the proposed Insured? .........................................................................................  [ ]  [X]

    b. spouse (if proposed for coverage)? .........................................................................................  [ ]  [ ]

- ------------------------------------------------------------------------------------------------------------

18. If 17a or b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until         Yes   No

    the person(s) indicated in 17 have been examined, even if 16 shows that an amount has been paid? .................  [ ]  [ ]

- ------------------------------------------------------------------------------------------------------------

 ORD 84376-86                                     Page 1 (Continued on page 2)

<PAGE>

- -----------------------------------------------------------------------------------------------------------------------------------

Continuation of Part 1 of Application

- -----------------------------------------------------------------------------------------------------------------------------------

19. Will this insurance replace or change any existing insurance or annuity in any company on any person named  in 1a or 11?

If "Yes", give their names, name of company, plan, amount, policy numbers and enclose any  required state replacement form(s).        Yes   No

                                                                                                                                              0;                                                                         [ ]   [X]

----------------------------------------------------------------------------------------

20. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 11 in this or any company?

If "Yes", give amount, details and company.           Yes   No                                                   [ ]   [X]

- -------------------------------------------------------------------------------------

21. Does any person named in 1a or 11 plan to live or travel outside the United States and Canada within the  next 12 months? If "Yes", give country(ies), purpose and duration of trip.  Yes   No

                                                                       [ ]   [X]

- --------------------------------------------------------------------------------------

22. Has any person named in 1a or 11 operated or had any duties aboard an aircraft, glider, balloon, or like device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", complete Aviation Questionnaire.              Yes  No

                                                                                                                                              0;                       [ ]  [X]

----------------------------------------------------------------------------------------

23. Has any person named in 1a or 11 engaged in hazardous sports such as: auto, motorcycle or power boat sports; bobsledding, scuba or skin diving; mountain climbing; parachuting or sky diving; snowmobile racing or any other hazardous sport or hobby within the last 2 years or does any such person plan to do so in the future? If "Yes", complete Avocation Questionnaire.               Yes  No

                                                                                                                                              0;         [ ]  [X]

----------------------------------------------------------------------------------------

24. Has any person (age 15 or over) named in 1a or 11 in the last 3 years:                                       Yes  No

    a. had a driver's license denied, suspended or revoked?         .........................................................                    [ ]  [X]

    b. been convicted of three or more moving violations of any motor vehicle law or of driving while under

       the influence of alcohol or drugs? ...........................................................................  [ ]  [X]

    c. been involved as a driver in 2 or more auto accidents? .......................................................                      [ ]  [X]

    If "Yes", give name, driver's license number and state of issue, type of violation and reason for license

    denial, suspension or revocation.

----------------------------------------------------------------------------------------

25. a. Has the proposed Insured smoked cigarettes within the past twelve months? ..............................   Yes [ ]  No [ ]

    b. Has the spouse (if proposed for coverage) smoked cigarettes within the past twelve months? .............   Yes [ ]  No [ ]

    c. If the proposed Insured or spouse has ever smoked cigarettes, cigars or a pipe, show date(s) last smoked:

                                  Cigarettes                                  Cigars                                       Pipe

Proposed Insured      Mo. _______     Yr. _______     Mo. _______     Yr. _______    Mo._______   Yr. _______

Spouse                      Mo. _______     Yr. _______     Mo. _______     Yr. _______    Mo._______   Yr. _______

- -------------------------------------------------------------------------------------

26. Changes made by the Company. (Not applicable in West Virginia)

----------------------------------------------------------------------------------------

To the best of the knowledge and belief of those who sign below, the statements in this application are complete and true. It is understood that, if any of the above statements (for example, the smoking data) is a material misrepresentation, coverage could be invalidated as a result. The beneficiary named in the application is for insurance payable upon death of (1) the Insured,and (2) an insured child after the death of the Insured if there is no insured spouse.

When the Company gives a Limited Insurance Agreement form, ORD 84376A-86, of the same date as this Part 1, coverage will start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the full first

premium is paid while all persons to be covered are living and their health remains as stated in Parts 1 and 2. If all these take place, coverage will start on the contract date. If the Company makes a change as indicated in 26 it will be approved by acceptance

of the contract. But where the law requires written consent for any change in the application, such change can be made only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the Company's rights or needs.

Ownership: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured, otherwise (2) the proposed Insured. But this is subject to any automatic transfer of ownership stated in the contract.

                      JOHN DOE

                    --------------------------------------------------------------------

                      Signature of Proposed Insured (If age 8 or over)

Dated at (Name of City/State)   on    Aug. 3, 1987

----------------    --------------------------------------------------------------------

          (City/State)                                         Signature of Applicant (If other than proposed Insured --

                                                               If applicant is a firm or corporation, show that company's name

Witness       JOHN ROE                                         By

- -----------------------------------------------------------    -----------------------

(Licensed agent must witness where required by law)            (Signature and title of officer signing for that company)

- -------------------------------------------------------------------------------------

ORD 84376-86

                                                       Page 2

The Prudential Insurance Company of America                      No. xx xxx xxx

A Supplement to the Life Insurance Application for a variable contract in which

John Doe is named as the proposed insured.

- -------------------------------------------------------------------------------

I BELIEVE THIS CONTRACT MEETS MY INSURANCE NEEDS AND FINANCIAL OBJECTIVES. I

ACKNOWLEDGE RECEIPT OF A CURRENT PROSPECTUS FOR THE CONTRACT. I UNDERSTAND THAT

THE CONTRACT'S VALUE AND DEATH BENEFIT MAY VARY DEPENDING ON THE CONTRACT'S

INVESTMENT EXPERIENCE .......................................   YES [X]  NO [ ]

Date                                    Signature of Applicant

            Aug. 3, 1987                  JOHN DOE

- --------------------------------        -----------------------------------

 ORD 86218--88

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

ENDORSEMENTS

(Only we can endorse this contract)

(VALA--88)                                                                           Page 29

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

     MODIFIED PREMIUM VARIABLE WHOLE LIFE INSURANCE POLICY. INSURANCE PAYABLE ONLY UPON DEATH. SCHEDULED PREMIUMS PAYABLE THROUGHOUT INSURED'S LIFETIME.  PROVISION FOR OPTIONAL ADDITIONAL PREMIUMS. CASH VALUES REFLECT PREMIUM PAYMENTS, INVESTMENT RESULTS AND CHARGES. DEATH BENEFIT GUARANTEED IF SCHEDULED PREMIUMS DULY PAID AND NO CONTRACT DEBT OR WITHDRAWALS. INCREASE IN FACE AMOUNT AT ATTAINED AGE 21 IF CONTRACT ISSUED AT AGE 14 OR LOWER. ELIGIBLE FOR ANNUAL DIVIDENDS AS STATED UNDER DIVIDENDS.

VALA—88                                                                           Page 30

EXHIBIT 26(d)(1)(d)

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

The Prudential Insurance Company of America

[Prudential Logo]                                                                                      a mutual life insurance company

Prudential Plaza, Newark, New Jersey 07101

               Insured   JOHN DOE                                                                                                           XX XXX XXX   Policy Number

SEP 10, 1988   Contract Date

           Face Amount   $50,000--

        Premium Period   LIFE

                Agency   R-NK 1

- --------------------------------------------------------------------------------------------------------------------------------------------------------

     We will pay the beneficiary the proceeds of this contract promptly if we receive due proof that the Insured died. We make this promise subject to all the provisions of the contract.

     The proceeds arising from the Insured's death will be the insurance amount, plus the amount of any extra benefit arising from the Insured's death (unless the contract is in default or there is contract debt). The insurance amount may be fixed or variable depending on the payment of premiums, the investment experience of the variable investment options, any excess interest credited to the fixed investment options, and the charges made. But it will not be less than the face amount. (We describe the insurance amount on page 16.)

     The cash value may increase or decrease daily depending on the payment of premiums, the investment experience of the variable investment options, any excess interest credited to the fixed investment options, and the charges made.  There is no guaranteed minimum.

     We specify a schedule of premiums. Additional premiums may be paid at your option subject to the limitations in the contract.

     Please read this contract with care. A summary is on page 5. If there is ever a question about it, or if there is a claim, just see one of our agents or get in touch with one of our offices.

     Right to cancel Contract.--You may return this contract to us within: (1) 10 days after you get it, or (2) 45 days after Part 1 of the application was signed, or (3) 10 days after we mail or deliver to you any withdrawal right notice required by the Securities and Exchange Commission, whichever is latest.  All you have to do is take the contract or mail it to one of our offices or to the agent who sold it to you. It will be canceled from the start and we will promptly give you the value of your contract fund on the date you return the contract to us. We will also give back any charges we made in accord with this contract.

Signed for Prudential.

         /s/ SPECIMEN                          /s/ SPECIMEN

         -----------------------               -----------------------

            Secretary                             President

     Modified Premium Variable Whole Life Insurance Policy with variable insurance amount. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums.

Benefits reflect premium payments, investment results and charges. Death benefit guaranteed if scheduled premiums duly paid and no contract debt or withdrawals.  Increase in face amount at attained age 21 if contract issued at age 14 or lower. Eligible for annual dividends as stated under Dividends.

- ----------------------------------------------------------------------------------------------------------------------------------------------------------

VALB--88

GUIDE TO CONTENTS                                                                                                                   Page

Contract Data ...................................................................................................................................  3

  List of Contract Minimums;

  List of Supplementary Benefits, if any; Summary

  of Face Amount; Schedule of Premiums; Schedule

  of Expense Charges from Premium Payments; Schedule

  of Monthly Deductions from Contract Fund;

  Schedule of Maximum Surrender Charges;

  List of Subaccounts and Portfolios; List

  of Fixed Account Options; Schedule

  of Initial Allocation of Net Premiums; Home Office

Tabular Values ................................................................................................................................  4

Contract Summary ..........................................................................................................................  5

  Table of Basic Amounts

General Provisions...........................................................................................................................  6

  Definitions; The Contract; Contract

  Modifications; Ownership and Control;

  Suicide Exclusion; Currency; Misstatement

  of Age or Sex; Incontestability; Assignment;

  Annual Report; Increase in Face Amount

  at Age 21 for Contracts Issued at Age 14

  or Lower; Payment of Death Claim; Change in Plan

Beneficiary.......................................................................................................................................  8

Premium Payment and Reinstatement............................................................................................  8

  Payment of Premiums; Basic Premiums; Charge

  for Applicable Taxes; Scheduled Premiums;

  Unscheduled Premiums; Invested Premium

  Amount; Contract Change Date(s); Allocations;

  Premium Account; Default; Grace Period;

  Reinstatement

Face Amount Changes and Withdrawals ....................................................................................... 12

  Face Amount; Increase in Face

  Amount; Decrease in Face Amount;

  Withdrawals

Dividends ....................................................................................................................................... 14

  Participation; Dividend Options; Dividend Credits

  Described; Settlement

Separate Account ........................................................................................................................... 15

  Separate Account; Variable Investment Options;

  Separate Account Investments

Fixed Investment Options ............................................................................................................... 16

Transfers ........................................................................................................................................ 16

Insurance Amount ........................................................................................................................... 16

Contract Fund ................................................................................................................................. 16

  Contract Fund Defined; Guaranteed Interest;

  Excess Interest; Charge for Expected Mortality;

  Charge for Extra Rating Class; Charge for Extra

  Benefits; Charges for Administration, Sales

  Expenses and Minimum Death Benefit Guarantee

Contract Value Options ................................................................................................................... 18

  Benefit After the Grace Period; Extended

  Insurance; Fixed Reduced Paid-up

  Insurance; Variable Reduced Paid-up Insurance

  Computations; Optional Benefit; Cash Value

  Option; Tabular Values

Loans .............................................................................................................................................. 20

  Loan Requirements; Contract Debt; Loan

  Value; Interest Charge; Fixed Loan Rate Option;

  Variable Loan Rate Option; Repayment; Effect

  of a Loan; Excess Contract Debt; Postponement

  of Loan

Settlement Options ......................................................................................................................... 22

  Payee Defined; Choosing an Option;

  Options Described; First Payment Due Date;

  Residue Described;

  Withdrawal of Residue; Designating

  Contingent Payee(s);

  Changing Options; Conditions;

  Death of Payee

Automatic Mode of Settlement ....................................................................................................... 24

   Applicability; Interest on Proceeds;

   Settlement at Payee's Death; Spendthrift and

   Creditor

Income Tables ............................................................................................................................... 25

Voting Rights ................................................................................................................................. 26

Home Office Location ................................................................................................................... 26

    Any supplementary benefits and a copy of the application follow page 26.

(VALB--88)                                                                           Page 2H

CONTRACT DATA

Insured's Sex and Issue Age                                               M-35

                    Insured                                                                JOHN DOE                      XX XXX XXX         Policy Number

                Face Amount                                                         $50,000--                        SEP 10, 1988                Contract Date

             Premium Period                                                         LIFE

                     Agency                                                             R-NK 1

                Beneficiary                                                            CLASS 1     MARY DOE, WIFE

                CLASS 2     ROBERT DOE, SON

  Fixed Loan Interest Rate

LIST OF CONTRACT MINIMUMS

The minimum unscheduled premium is $25.

The minimum increase in face amount is $25,000.

The minimum decrease in face amount is $10,000.

The minimum face amount is $50,000.

***** END OF LIST *****

LIST OF SUPPLEMENTARY BENEFITS

***** NONE *****

SUMMARY OF FACE AMOUNT

EFFECTIVE            RATING                                CONTRACT CHANGE

AMOUNT                             DATE                      CLASS                                           DATE

Initial    $50,000--                                  SEP 10, 1988           NONSMOKER                      SEP 10, 2018

***** END OF SUMMARY *****

SCHEDULE OF PREMIUMS

Scheduled premiums are equal to the basic premium plus the charge for applicable taxes. The initial scheduled premium due on the contract date is $454.59. Due dates of scheduled premiums occur on the contract date and at intervals of 12 months after that date.

Basic Premiums are                                                      $  445.50 each

Changing on SEP 10, 2018 to                                    $ 2299.00 each

***** END OF SCHEDULE *****

VAL—88                                                                           PAGE 3

POLICY NO. XX XXX XXX

SCHEDULE OF DEDUCTIONS FROM PREMIUM PAYMENTS

From each premium paid, we first deduct a charge for applicable taxes (other than taxes discussed on page 17) of 2%. We reserve the right to change this percentage to conform to changes in the law or if the insured changes residence.

From the remainder, we deduct a charge for payment processing of up to $2.00.  After deduction of this amount, the balance is the invested premium amount.

***** END OF SCHEDULE *****

SCHEDULE OF MONTHLY DEDUCTIONS FROM THE CONTRACT FUND

The monthly charge for administration is no more than $4.00.

The monthly charge to guartantee the minimum death benefit is no more than $0.50.

The monthly charge for sales expenses is no more than $2.06.

Changing on Sep 10, 2018 to $11.33.

***** END OF SCHEDULE *****

***** SCHEDULE OF OTHER CHARGES *****

There is a charge of up to $15 for any withdrawal or decrease in face amount.

***** END OF SCHEDULE *****

SCHEDULE OF MAXIMUM SURRENDER CHARGES

For full surrender at the beginning of the contract year indicated, the maximum charge we will deduct from the contract fund is shown below. For surrender at other times, the amount of the charge will reflect the number of days since the beginning of the contract year. For any decrease in face amount, we will deduct a proportionate part of the surrender charge.

 Year of         Surrender              Year of             Surrender

Surrender      Charge                 Surrender         Charge

- ---------         ---------                   ---------             ---------

   1               457.00                            6                    457.00

   2               457.00                            7                    365.50

   3               457.00                            8                    274.00

   4               457.00                            9                    183.00

   5               457.00                         10                     91.50

                                                        11  And Later   Zero

***** END OF SCHEDULE *****

VAL--88(H)                                                                           PAGE 3A

POLICY NO. XX XXX XXX

TABLE OF MAXIMUM MONTHLY RATES PER $1000

  Insured's            Maximum          Insured's         Maximum

Attained Age        Rate               Attained Age    Rate

- ------------             -------              ------------            ---------

      35                  0.1439                   68                  2.4893

      36                  0.1514                   69                  2.7438

      37                  0.1614                   70                  3.0317

      38                  0.1722                   71                  3.3603

      39                  0.1839                   72                  3.7397

      40                  0.1980                   73                  4.1690

      41                  0.2130                   74                  4.6407

      42                  0.2288                   75                  5.1449

      43                  0.2463                   76                  5.6774

      44                  0.2654                   77                  6.2340

      45                  0.2870                   78                  6.8180

      46                  0.3103                   79                  7.4478

      47                  0.3353                   80                  8.1434

      48                  0.3627                   81                  8.9229

      49                  0.3927                   82                  9.8023

      50                  0.4268                   83                 10.7774

      51                  0.4659                   84                 11.8290

      52                  0.5108                   85                 12.9330

      53                  0.5624                   86                 14.0753

      54                  0.6198                   87                 15.2384

      55                  0.6839                   88                 16.4173

      56                  0.7538                   89                 17.6287

      57                  0.8278                   90                 18.8899

      58                  0.9102                   91                 20.2303

      59                  1.0025                   92                 21.6995

      60                  1.1057                   93                 23.4408

      61                  1.2205                   94                 25.7770

      62                  1.3528                   95                 29.2738

      63                  1.5025                   96                 35.0252

      64                  1.6689                   97                 45.0097

      65                  1.8511                   98                 61.9945

      66                  2.0483                   99                 83.1973

      67                  2.2596

VAL--88(H)                                                                            PAGE 3B

POLICY NO. XX XXX XXX

LIST OF INVESTMENT OPTIONS

I. THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

This account is registered with the SEC under the Investment Company Act of 1940. Each investment option of this account invests in a specific portfolio of The Prudential Series Fund. The fund is registered with the SEC under the Investment Company Act of 1940 as an open-end diversified management investment company. The fund has several portfolios. We show below the available investment options and the fund portfolios they invest in.

INVESTMENT                                FUND

OPTION                                           PORTFOLIO

----------                                                 ---------

           Money Market                                     Money Market

           Bond                                                      Bond

           Common Stock                                     Common Stock

           Aggressively Managed Flx               Aggressively Managed Flx

           Conservative Managed Flx               Conservative Managed Flx

           High Yield Bond                                  High Yield Bond

           Stock Index                                           Stock Index

           High Dividend Stock                          High Dividend Stock

           Natural Resources                               Natural Resources

II. THE PRUDENTIAL REAL PROPERTY ACCOUNT

This account is not registered with the SEC under the Investment Company Act 1940. The following investment option is available.

                                   INVESTMENT

                                     OPTION

                                    --------

                                   Real Estate

III. FIXED INVESTMENT OPTIONS

The fixed investment options are funded by the general account of the Company.

The following investment option is available.

                                   INVESTMENT

                                     OPTION

                                    --------

                               Fixed Interest Rate

********* END OF LIST *********

SCHEDULE OF INITIAL ALLOCATION OF INVESTED PREMIUM AMOUNTS

                      Money Market                  20%

                      Common Stock                 60%

                      Fixed Interest Rate           20%

********* END OF SCHEDULE *********

VAL—88                                                                           PAGE 3C

POLICY NO. XX XXX XXX

TABULAR VALUES

Tabular values are calculated based on the scheduled premiums, guaranteed charges, assumed rate of return, no contract debt and no dividends credited.  Actual values may be different than the tabular amounts shown below.

                                                    Tabular

                                                                                   Extended

    End of                  Tabular                                                            Tabular                  Tabular                          Insurance*

   Contract                 Contract                                                         Cash                       Reduced                       ---------------

     Year                     Fund                                                                 Value                     Paid-up                       Years      Days

                                                                                                                                          Insurance

 --------                 --------                                                                -------                        - ---------                                 -----      ----

      1                      292.00                                                                0.00                                    0.00                              0          0

      2                      591.50                                                                134.50                                531.00              
60;           1          7

      3                      898.00                                                                441.00                                1682.00              &# 160;         3        58

      4                     1210.50                                                                753.50                                2779.00               & #160;       4       360

      5                     1529.00                                                                1072.00                                3824.00                      6       170

      6                     1853.0                                                                1487.00                                5132.00               & #160;       8         41

      7                     2182.00                                                                1908.00                                6369.00                      9       151

      8                     2515.50                                                                2332.50                                7533.00                      10154

      9                     2853.00                                                                2761.50                                8632.00                      1163

     10                     3194.00                                                                3194.00                                9663.00                 ;    11262

     11                     3537.50                                                                3537.50                                10361.00                0;  11316

     12                     3882.50                                                                3882.50                                11012.00                0;  11338

     13                     4229.00                                                                4229.00                                11617.00                0;  11329

     14                     4575.00                                                                4575.00                                12174.00                0;  11294

     15                     4919.50                                                                4919.50                                12684.00                0;  11236

     16                     5261.00                                                                5261.00                                13146.00                0;  11158

     17                     5596.00                                                                5596.00                                13556.00                0;  1162

     18                     5922.00                                                                5922.00                                13913.00                0;  10314

     19                     6235.00                                                                6235.00                                14211.00                0;  10185

     20                     6532.00                                                                6532.00                                14449.00                0;  1046

   ATTAINED

     AGE

   --------

     60                      7635.00                                                                7635.00                                14635.00               0;    7     290

     62                      7796.50                                                                7796.50                                14158.00               0;    6     263

     65                      7500.00                                                                7500.00                                12612.00                   5      

*There may be extra days of term insurance. We explain this under the Extended

Insurance provision.

                  Nonforfeiture Factors, applicable during premium

                  period, per $1,000 of initial face amount

                  Contract Years 1 through 30                  7.45334

                  Contract Years 31 and later                  43.02598

VAL—88                                                                           PAGE 4

- --------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT SUMMARY

     This life insurance contract will provide benefits while the Insured is living and upon the Insured's death as described below.

     Unless we endorse the contract to say otherwise, it gives you the following rights, among others, subject to certain limitations and requirements:

·   You may change the beneficiary.

·   You may borrow on it up to its loan value.

·   You may change the allocation of future invested premium amounts among        the investment options.

·   You may transfer amounts among the investment options.

·   You may change the face amount.

·   You may withdraw a portion of the contract's value.

·   You may surrender the contract. If you do, the proceeds will be the net cash value.

     To compute the proceeds payable upon the Insured's death, we start with a basic amount and adjust that amount as described in the table below.

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

TABLE OF BASIC AMOUNTS

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

If the contract is in force:                                   Then the basic amount is:                                       And we adjust the basic amount  for:

- ---------------------------------------------------------------------------------------------------------------------------------------------------------------

and not in default past its days                        the insurance amount (see page                             contract debt (see page 20),

of grace                                                                16) plus the amount of any extra                             dividend credits (see page

                                                                              benefits arising from the                                            14), and any charges due in

                                                                               Insured's death                                                           the days of grace (see page 11).

- ----------------------------------------------------------------------------------------------------------------------------------------------------------------

as reduced paid-up insurance                          the amount of reduced paid-up                                contract debt and dividend

(see pages 18 & 19)                                            insurance (see pages 18 & 19)                                 credits since the reduced

                                                                               paid-up insurance began.

- ----------------------------------------------------------------------------------------------------------------------------------------------------------------

as extended insurance (see                               the amount of term insurance, if                               nothing.

page 18)                                                                the Insured dies in the term (see

                                                                               page 18); otherwise zero

- ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

     The contract may have extra benefits that we call supplementary benefits.  If it does, we list them under Supplementary Benefits on the contract data pages and describe them after page 26. The contract may have other extra benefits. If it does, we add them by rider. Any extra benefit ends as soon as the contract is in default past its days of grace, unless the form that describes it states otherwise.

     Proceeds need not be taken in one sum. For instance, on surrender, you may be able to choose a settlement option to provide retirement income or for some other purpose. If a death benefit becomes payable the beneficiary may also be able to make such a choice. We will automatically pay interest under Option 3 from the date of death on any death benefit to which no other manner of payment applies. This will be automatic as we state on page 24.

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

(VALA--88)                                                                           Page 5

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

GENERAL PROVISIONS

DEFINITIONS

     We define here some of the words and phrases used all through this contract. We expIain others, not defined here, in other parts of the text.

     We, Our, Us and Company.--Prudential.

     You and Your.--The owner of the contract.

     Insured.--The person named as the Insured on the first page. He or she need not be the owner.

     Example: Suppose we issue a contract on the life of your spouse. You applied for it and named no one else as owner. Your spouse is the Insured and you are the owner.

     SEC.--The Securities and Exchange Commission.

     Issue Date.--The contract date.

     Monthly Date.--The contract date and the same day as the contract date in each later month.

     Example: If the contract date is May 9, 1988, the monthly dates are each May 9, June 9, July 9 and so on.

     Anniversary or Contract Anniversary.--The same day and month as the contract date in each later year.

     Example: If the contract date is May 9, 1988, the first anniversary is May 9, 1989. The second is May 9, 1990, and so on.

     Contract Year.--A year that starts on the contract date or on an anniversary.

     Example: If the contract date is May 9, 1988, the first contract year starts then and ends on May 8, 1989. The second starts on May 9, 1989 and ends on May 8, 1990, and so on.

     Contract Month.--A month that starts on a monthly date.

     Example: If May 9, 1988 is a monthly date, a contract month starts then and ends on June 8, 1988. The next contract month starts on June 9, 1988 and ends on July 8, 1988, and so on.

     Attained Age.--The Insured's attained age at any time is the issue age plus the length of time since the contract date. You will find the issue age near the top of page 3.

     Assumed Rate of Return.--The assumed rate of return is an effective rate of 4% a year. This is the same as 0.01074598% a day compounded daily.

THE CONTRACT

     This policy, and the attached copy of the initial application, together with copies of any subsequent applications to change the policy, and any additional contract data pages added to the policy, form the whole contract. We assume that all statements in an application are made to the best of the knowledge and belief of the person(s) who make them; in the absence of fraud they are deemed to be representations and not warranties. We rely on those statements when we issue or change the contract. We will not use any statement, unless made in an application, to try to void the contract or to deny a claim.

CONTRACT MODIFICATIONS

     Only a Prudential officer with the rank or title of vice president or above may agree to modify this contract, and then only in writing.

OWNERSHIP AND CONTROL

     Unless we endorse this contract to say otherwise: (1) the owner of the contract is the Insured; and (2) while the Insured is living the owner alone is entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us.

(VALA--88)                                                                            Page 6

SUICIDE EXCLUSION

     If the Insured, whether sane or insane, dies by suicide within two years from the issue date, we will pay no more under this contract than the sum of the premiums paid.

     Also, for any increase in the face amount, if the Insured, whether sane or insane, dies by suicide within two years from the effective date of the increase, we will pay, as to the increase in amount, no more than the sum of the scheduled premiums that were due for the increase.

CURRENCY

     Any money we pay, or that is paid to us, must be in United States currency.  Any amount we owe will be payable at our Corporate Office.

MISSTATEMENT OF AGE OR SEX

     If the Insured's stated age or sex or both are not correct, we will adjust each benefit and any amount to be paid to reflect the correct age and sex. Any death benefit will be based on what the most recent charge for mortality would have provided at the correct age and sex. Where required, we have given the insurance regulator a detailed statement of how we will make these adjustments.

     The Schedule of Premiums may show that basic premiums change or stop on a certain date. We may have used that date because the Insured would attain a certain age on that date. If we find that the issue age was wrong, we will correct that date and, if necessary, the amount of any changed premiums.

INCONTESTABILITY

     Except as we state in the next sentence, we will not contest this contract after it has been in force during the Insured's lifetime for two years from the issue date. There are two exceptions: (1) non-payment of enough premium to provide the required charges; and (2) any change in the contract that requires our approval and that would increase our liability. For any such change, we will not contest the change after it has been in effect during the Insured's lifetime for two years from the date it takes effect.

ASSIGNMENT

     We will not be deemed to know of an assignment unless we receive it, or a copy of it, at our Home Office. We are not obliged to see that an assignment is valid or sufficient. This contract may not be assigned to another insurance company or to any employee benefit plan without our consent. This contract may not be assigned if such assignment would violate any federal, state, or local law or regulation prohibiting sex distinct rates for insurance.

ANNUAL REPORT

     Each year we will send you a report. It will show: (1) the current death benefit; (2) the amount of the contract fund in each investment option; (3) the net cash value; (4) premiums paid, investment results, and charges deducted since the last report; (5) any withdrawals since the last report; and (6) any contract debt and the interest on the debt for the prior year. The report will also include any other data that may be currently required where this contract is delivered. No report will be sent if this contract is being continued under fixed reduced paid-up insurance or extended term insurance.

     You may ask for a similar report at some other time during the year. Or you may request from time to time a report projecting results under your contract on the basis of premium payment assumptions and assumed investment results. We have the right to make a reasonable charge for reports such as these that you ask for and to limit the scope and frequency of such requests.

INCREASE IN FACE AMOUNT AT AGE 21 FOR CONTRACTS ISSUED AT AGE 14 OR LOWER

     If this contract was issued at age 14 or lower, it shows on page 3 an increase in face amount at attained age 21 which applies if the contract is not then in default beyond its days of grace. In that case, any references in the contract to face amount or death benefit which apply at or after attained age 21 will be based on the increased face amount, unless otherwise stated.

PAYMENT OF DEATH CLAIM

     If we settle this contract in one sum as a death claim, we will usually pay the proceeds within seven days after we receive at our Home Office proof of death and any other information we need to pay the claim. But we have the right to postpone paying the part of the proceeds in excess of the face amount that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying the remainder of any excess for up to six months.

CHANGE IN PLAN

     You may be able to have this contract changed to another plan of life insurance either with us or with a subsidiary of ours. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

(VALA-88)                                                                           Page 7

- ----------------------------------------------------------------------------------------------------------------------------------------------------------

BENEFICIARY

     You may designate or change a beneficiary. Your request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office; this will be after you send the contract to us to be endorsed, if we ask you to do so. Then any previous beneficiary's interest will end as of the date of the request. It will end then even if the Insured is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know.

     When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated. To show priority, we may use numbered classes, so that the class with first priority is called class 1, the class with next priority is called class 2, and so on. When we use numbered classes, these statements apply to beneficiaries unless the form states otherwise:

     1. One who survives the Insured will have the right to be paid only if no one in a prior class survives the Insured.

     2. One who has the right to be paid will be the only one paid if no one else in the same class survives the Insured.

     3. Two or more in the same class who have the right to be paid will be paid in equal shares.

     4. If none survives the Insured, we will pay in one sum to the Insured's estate.

     Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. We owe Jane the proceeds if she is living at the Insured's death. We owe Paul and John the proceeds if they are living then but Jane is not. But if only one of them is living, we owe him the proceeds. If none of them is living we owe the Insured's estate.

     Beneficiaries who do not have a right to be paid under these terms may still have a right to be paid under the Automatic Mode of Settlement.

     Before we make a payment, we have the right to decide what proof we need of the identity, age or any other facts about any persons designated as beneficiaries. If beneficiaries are not designated by name and we make payment(s) based on that proof, we will not have to make the payment(s) again.

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

PREMIUM PAYMENT AND REINSTATEMENT

PAYMENT OF PREMIUMS

     Premiums may be paid at our Home Office or to any of our authorized agents.  If we are asked to do so, we will give a signed receipt.

     Premium payments will in most cases be credited as of the date of receipt at our Home Office. In the following cases, part or all of a premium payment will be credited as of a date other than the date of receipt:

     1. If the first premium payment is received after the contract date, the scheduled portion will be credited as of the contract date.

(VALA-88)                                                                           Page 8

     2. If the first premium payment is received before the contract date, it will be credited as of the contract date.

     3. If a premium payment is received during the 61-day period after a scheduled premium due date and the premium account is negative by no more than the scheduled premium then due, the portion of the payment needed to bring the premium account up to zero will be credited to the premium account, but not the contract fund, as of the due date.

     4. If the contract is in default and premium payments are received during the days of grace while the contract is in default, we will credit to the contract fund and the premium account those parts of the premium payments needed to end the default status as of the applicable monthly dates.

BASIC PREMIUMS

     We show the amount and frequency of the basic premiums in the Schedule of Premiums in the contract data pages. An increase or decrease in the face amount will change the basic premiums.

CHARGE FOR APPLICABLE TAXES

     The charge for applicable taxes is a percentage of each premium paid that we set from time to time. It will change only on a contract anniversary.

     At least sixty days before the start of each contract year, we will determine the rate we will charge for that contract year. The rate will be based on the rates of any federal, state or local premium taxes that apply at the last known address of the Insured.

SCHEDULED PREMIUMS

     The scheduled premiums are equal to the basic premiums plus the charge for applicable taxes. The scheduled premiums will change if the basic premiums change or the charge for applicable taxes changes. We show the amount of the first scheduled premium in the Schedule of Premiums. It is due on the contract date. There is no insurance under this contract unless an amount at least equal to the first scheduled premium is paid.

     The scheduled premium is the minimum premium required, at the frequency chosen, to continue the contract in full force if you pay all scheduled premiums when due, you make no withdrawals, and any contract debt does not exceed the cash value.

     If you wish to pay, on a regular basis, premiums that are higher than the scheduled premiums, we will bill you for the higher amount you choose. Or if you wish, you may from time to time make a premium payment smaller than the scheduled amount, subject to the minimum premium amount shown on page 3.

     If scheduled premiums that are due are not paid, or if smaller payments are made, the contract may then or at some future time go into default. Payment of less than the scheduled premium increases the risk that the contract will end if investment results are not favorable. The conditions under which the contract will be in default are described below.

UNSCHEDULED PREMIUMS

     Except as we state in the next paragraph, unscheduled premiums may be paid at any time during the Insured's lifetime as long as the contract is not in default beyond its days of grace. We show on page 3 the minimum premium we will accept.

     We have the right to limit unscheduled premiums to a total of $10,000 in any contract year. We also have the right to refuse any payment that increases the insurance amount by more than it increases the contract fund.

INVESTED PREMIUM AMOUNT

     This is the portion of each premium paid that we will add to the premium account and the contract fund. It is equal to the premium paid minus the charges described in the contract data pages under Schedule of Deductions from Premium Payments.

CONTRACT CHANGE DATE(S)

     We show the contract change date(s) in the contract data pages. We also show in the Schedule of Premiums on these pages that the amount of each basic premium will change on each contract change date and what the new premium will be. However, when a contract change date arrives we will compute a new premium amount to be used in calculating the premium account. The new premium that we compute will be no greater than the new premium for that date which we show in the contract data pages. In addition, if the premium account is less than zero, we will set the premium account to zero.

(VALA--88)                                                                           Page 9

     The Schedule of Premiums may show that the premium changes at times other than contract change dates. This may occur, for example, with a contract issued with extra benefits or in an extra rating class.

ALLOCATIONS

     You may allocate all or a part of your invested premium amount to one or more of the investment options listed in the contract data pages. You may choose to allocate nothing to a particular investment option. But any allocation you make must be at least 10%; you may not choose a fractional percent.

     Example: You may choose a percentage of 0, or 100, or 10, 11, 12, and so on, up to 90. But you may not choose a percentage of 1 through 9, or 91 through 99, or any percentage that is not a whole number. The total for all investment options must be 100%.

     The initial allocation of invested premium amounts is shown in the contract data pages. You may change the allocation for future invested premium amounts at any time if the contract is not in default. To do so, you must notify us in a form that meets our needs. The change will take effect on the date we receive your notice at our Home Office.

     A premium might be paid when the contract fund is less than zero. In that case we first use as much of the invested premium amount as we need to bring the fund up to zero. We will then allocate any remainder of the invested premium amount in accord with your most recent request.

PREMIUM ACCOUNT

     On the contract date, the premium account is equal to the invested premium amount credited on that date, minus the basic premium then due, plus the charge for payment processing. On any other day, the premium account is equal to:

     1. what it was on the prior day; plus

     2. if the premium account was greater than zero on the prior day, interest on the excess at 4% a year; minus

     3. if the premium account was less than zero on the prior day, interest on the deficit at 4% a year; plus

     4. any invested premium amount credited on that day; minus

     5. any basic premium due on that day less the charge for payment processing; minus

     6. any withdrawals on that day.

     If we credit a part of a payment as of an earlier date, as we describe under Payment of Premiums, the premium account for all days from the crediting date to the date of receipt will be recalculated.

DEFAULT

     Unless the contract is already in the grace period, we will determine on each monthly date whether the contract is in default. To do so, we will first deduct any applicable charges from the contract fund and add any applicable credits to it (the contract fund is described on page 16). We will then compute the amount which will grow to equal the tabular contract fund on the next monthly date if, during the current contract month: (1) any investment results are at the assumed rate and (2) we receive no premiums or loan repayments, make no loans and grant no withdrawals. We will compare this amount to the contract fund.

     If this amount is more than the contract fund, the difference is the fund deficit. In this case the contract is in default if the premium account is also less than zero.

(VALA--88)                                                                           Page 10

GRACE PERIOD

     The days of grace begin on any monthly date, other than the contract date, on which the contract goes into default. Within 30 days after any default we will send you a notice that your contract is in default. We will indicate the minimum payment required to bring the contract out of default and the length of the grace period for making that payment.

     We grant at least 61 days of grace from the date we mail you a notice of default. During the days of grace we will continue to accept premiums and make the charges we have set.

     If at any time during the days of grace we have received payments that in total are at least equal to the lesser of (a) the sum of the fund deficit on the date of default and any additional fund deficits on any subsequent monthly dates since the date of default, and (b) the sum of the amount by which the premium account is negative on the date of default and any scheduled premiums due since the date of default, the default will end.

     If at any time during the days of grace we have received payments that in total are at least equal to the lesser of (a) the fund deficit on the date of default, and (b) the amount by which the premium account is negative on the date of default, but that are insufficient to end the default, here is what we will do. We will determine a new default date which is the monthly date after the old default date. We will grant at least 61 days of grace from the new default date.

     If the contract is still in default when the days of grace are over, it will end and have no value, except as we state under Contract Value Options (see page 18). Any premiums paid during the days of grace will remain in the contract fund.

     The Insured might die in the days of grace while the contract is in default. If so, the amount needed to bring the contract out of default is due us. We will make an adjustment so that the proceeds will not include that amount.

     This contract might have an extra benefit that insures someone other than the Insured. And there might be a claim under that benefit while the Insured is living and in the days of grace while the contract is in default. In this case, we will subtract the amount needed to bring the contract out of default before we settle the claim.

REINSTATEMENT

     If this contract is still in default after the last day of grace, you may reinstate it. All these conditions must be met:

     1. The contract must not be in default more than five years.

     2. You must not have surrendered the contract for its net cash value.

     3. You must give us any facts we need to satisfy us that the Insured is insurable for the contract.

     4. We must be paid a premium at least equal to the amount required to bring the premium account up to zero on the first monthly date on which a scheduled premium is due after the date of reinstatement.

     5. If before reinstatement the contract is in force as reduced paid-up insurance (see pages 18 & 19), any contract debt under reduced paid-up insurance must be repaid with interest or carried over to the reinstated contract.

(VALB--88)                                                                           Page 11

     If we approve the reinstatement, these statements apply. The date of reinstatement will be the date of your request or the date the required premium is paid, if later. We will start to make daily and monthly charges and credits again as of the date of reinstatement. We will deduct from the premium paid the charges from premium payments described in the contract data pages, and any charges in arrears, other than the charge for expected mortality, with 4% interest to the date of reinstatement. The contract fund will be equal to the remainder, plus the cash value of the contract immediately before reinstatement, plus a refund of that part of any surrender charge deducted at the time of default which would be charged if the contract were surrendered immediately after reinstatement.

     If we consent, you may be able to reinstate the contract for a premium less than that described above. We will deduct the same charges and adjust the contract fund in the same manner. In that case, the premium account will be less than zero and you may need to pay more than the scheduled premiums to guarantee that the contract will not go into default again at some future time.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

FACE AMOUNT CHANGES AND WITHDRAWALS

FACE AMOUNT

     The face amount is shown on page 3. It will change if: (1) you increase or decrease it, or (2) you make a withdrawal.

INCREASE IN FACE AMOUNT

     After the first contract year, you may increase the face amount once each contract year. You may do so subject to all these conditions and the paragraph that follows:

     1. You must ask for the increase in writing in a form that meets our needs; if you are not the Insured and the Insured is age 8 or over, he or she must sign the form too.

     2. The amount of the increase must be at least equal to the minimum increase in face amount, which we show on page 3.

     3. You must give us any facts we need to satisfy us that the Insured is insurable for the amount of the increase.

     4. If we ask you to do so, you must send us the contract to be endorsed.

     5. The contract must not be in default.

     6. We must not since the issue date, have changed the basis on which benefits and charges are calculated under newly issued contracts.

     7. You must make any required payment.

     8. The Insured must be eligible for the same rating class and benefits as shown on page 3.

     9. We must not be waiving premiums in accord with any waiver of premium benefit that may be included in the contract.

        An increase will take effect only if we approve your request for it at our Home Office. If we approve the increase, we will recompute the contract's basic premiums, maximum surrender charges, tabular values, monthly deductions, and expense charges. We will send you new contract data pages showing the amount and effective date of the increase and        the recomputed values. If the Insured is not living on the effective date, the increase will not take effect.

(VALB--88)                                                                           Page 12

DECREASE IN FACE AMOUNT

     After the first contract year, you may decrease the face amount. You may do so subject to all these conditions and the paragraphs that follow:

     1. You must ask for the decrease in writing in a form that meets our needs.

     2. The amount of the decrease must be at least equal to the minimum decrease in face amount, which we show on page 3.

     3. The face amount after the decrease must be at least equal to the minimum face amount, which we show on page 3.

     4. If we ask you to do so, you must send us the contract to be endorsed.

     A decrease will take effect only if we approve your request for it at our Home Office. If we approve the decrease, we will recompute the contract's basic premiums, maximum surrender charges, tabular values, monthly deductions, and expense charges. A decrease in face amount may also affect the amount of any extra benefits this contract might have. We will send you new contract data pages showing the amount and effective date of the decrease and the recomputed values. If the Insured is not living on the effective date, the decrease will not take effect.

     We may deduct an administrative fee of up to $15.00, and a proportionate part of any then applicable surrender charge from the contract fund.

WITHDRAWALS

     You may make withdrawals from the contract. You may do so subject to all these conditions and the paragraphs that follow:

     1. You must ask for the withdrawal in writing in a form that meets our needs.

     2. The amount withdrawn, plus the net cash value after withdrawal, may not be more than the net cash value before withdrawal.

     3. The contract fund after withdrawal must not be less than the tabular contract fund.

     4. The amount you withdraw must be at least $500.

     5. You may make up to four withdrawals in any contract year.

     6. If we ask you to do so, you must send us the contract to be endorsed.

     We may deduct an administrative fee of up to $15.00.

     We will normally pay any withdrawal within seven days after we receive your request at our Home Office. But we have the right to postpone paying the part of the proceeds that come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year.

     An amount withdrawn may not be repaid, except as a premium subject to charges.

     We will tell you how much you may withdraw if you ask us.

(VALB--88)                                                                           Page 13

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

DIVIDENDS

PARTICIPATION

     We will decide each year what part, if any, of our surplus to credit to this contract as a dividend.

     While the contract is in force other than as extended or reduced paid-up insurance, it will be eligible for such a dividend if the Insured is living. We will credit any such dividend on the anniversary. We do not expect to credit any dividends to this contract.

DIVIDEND OPTIONS

     If you ask us in writing and in a form that meets our needs, you may choose any of these uses for any such dividend:

     1. Cash.--We will pay it to you in cash.

     2. Premium Reduction.--We will use it to reduce any premium then due. If no premium is then required, we will apply the dividend under dividend option 3.

     3. Dividend Addition.--We will use it at the net single premium rate as of the anniversary to provide a dividend addition, which is paid-up life insurance on the Insured's life.

     4. Accumulation.--We will hold it at interest. The rate will be at least 3% a year. We may use a higher rate.

     If you have not made another choice by 31 days after the anniversary, we will use the dividend as we state under dividend option 3. But if a contract is in default at the end of the last day of grace, we will use the dividend as we state under Contract Value Options. You may surrender any of the above additions or accumulations for their net value if: (1) we have not included them in the net cash value used to provide extended or reduced paid-up insurance; (2) we do not need them as security for contract debt; and (3) we have your request in writing in a form that meets our needs. The surrender value of those additions will not be less than the dividends we used to provide them.

     While the contract is in force as reduced paid-up insurance, it will be eligible for a dividend if the Insured is living. We will credit any such dividend on the anniversary as a paid-up life insurance addition on the Insured's life.

DIVIDEND CREDITS DESCRIBED

     The phrase dividend credits means the total of: (1) either the amount or value, as we explain in the next sentence, of any dividend additions under dividend option 3 or on reduced paid-up insurance; (2) any dividends and interest we hold under dividend option 4; and (3) any other dividends we have credited to the contract but have not yet used or paid. For dividend additions, the phrase means the amount of any of those additions when we set the amount of any extended insurance and when we refer to the proceeds that arise from the Insured's death; the phrase means the net value of any of those additions when we refer to loans, net cash values, or the proceeds that arise on surrender.

SETTLEMENT

     We will include any dividend credits in the amount payable when we settle the contract.

(VALA--88)                                                                           Page 14

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

SEPARATE ACCOUNTS

SEPARATE ACCOUNT

     The words separate account, when we use them in this contract without qualification, mean any separate account we establish to support variable life insurance contracts like this one. We list the separate accounts available to you in the contract data pages. We may establish additional separate accounts.  We will notify you within one year if we do so.

     A separate account may or may not be registered with the SEC under the Investment Company Act of 1940. The contract data pages will tell you whether or not a particular separate account is so registered.

VARIABLE INVESTMENT OPTIONS

     A separate account may one or more variable investment options. We list them in the contract data pages. We may establish additional variable investment options. We will notify you within one year if we do so.

     Income and realized and unrealized gains and losses from assets in each variable investment option are credited to, or charged against, that variable investment option. This is without regard to income, gains, or losses in our other investment accounts.

SEPARATE ACCOUNT INVESTMENTS

     We may invest the assets of different separate accounts in different ways.  But we will do so only with the consent of the SEC and, where required, of the insurance regulator where this contract is delivered.

     We will always keep assets in the separate accounts with a total value at least equal to the amount of the variable investment options under contracts like this one. To the extent those assets do not exceed that amount, we use them only to support those contracts; we do not use those assets to support any other business we conduct. We may use any excess over that amount in any way we choose.

     We will determine the value of the assets in each separate account and any variable investment option at regular intervals.

(VALB--88)                                                                           Page 15

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

FIXED INVESTMENT OPTIONS

     You may allocate all or part of your invested premium amount to a fixed investment option. Fixed investment options are credited with interest as described under Guaranteed Interest and Excess Interest on page 17.

     We may establish additional fixed investment options. We will notify you within one year if we do so.

- ----------------------------------------------------------------------------------------------------------------------------------------------------------

TRANSFERS

     Four transfers may be made in a policy year. There is no charge for these transfers.

     You may transfer amounts into or out of variable investment options of separate accounts registered under the Investment Company Act of 1940 and into the fixed investment options at any time if the contract is not in default or if the contract is being continued under the variable reduced paid-up option. Other transfers are allowed only with our consent.

     In addition, the entire amount in all investment options may be transferred to a fixed investment option at any time within the first two contract years.

     To make a transfer, you must notify us in a form that meets our needs. The transfer will take effect on the date we receive your notice at our Home Office.

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

INSURANCE AMOUNT

     The insurance amount on any date is equal to the greatest of: (1) the face amount, (2) the face amount, plus the contract fund before deduction of any monthly charges due on that date, minus the tabular contract fund, and (3) the contract fund before deduction of any monthly charges due on that date, divided by the net single premium per $1 at the Insured's attained age.

- -----------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT FUND

CONTRACT FUND DEFINED

     On the contract date the contract fund is equal to the invested premium amounts credited on that date, minus any of the charges described below which may be due on that date. On any day after that the contract fund is equal to what it was on the previous day, plus any invested premium amounts credited that day, plus these items:

     (a) any increase due to investment results in the value of the variable investment options;

     (b) guaranteed interest on that portion of the contract fund that is not in a variable investment option; and

     (c) any excess interest on that portion of the contract fund that is not in a variable investment option;

(VALA--88)                                                                           Page 16

and minus any of these items applicable on that day:

     (d) any decrease due to investment results in the value of the variable investment options;

     (e} a charge against the variable investment options at a rate of not more than 0.00245475% a day (0.90% a year) for mortality and expense risks that we assume;

     (f) any amount charged against the variable investment options for federal or state income taxes;

     (g) any charge for expected mortality;

     (h) any charge for extra rating class;

     (i) any charge for extra benefits;

     (j) any charge for administration;

     (k) any charge for sales expenses;

     (l) any charge to guarantee the minimum death benefit;

     (m) any withdrawals; and

     (n) any surrender charges, administrative charges or contract debt cancelled that may result from a withdrawal, a decrease in face amount or a change in status to variable reduced paid-up insurance.

     We describe under Reinstatement on page 11 what the contract fund will be on any reinstatement date. There is no contract fund for a contract in force as extended insurance or fixed reduced paid-up insurance.

GUARANTEED INTEREST

     We will credit interest each day on any portion of the contract fund not in a variable investment option. We will credit 0.01074598% a day, which is equivalent to an effective rate of 4% a year.

EXCESS INTEREST

     We may credit excess interest, that is, interest in addition to the guaranteed interest, on any portion of the contract fund not in a variable investment option. The rate of any excess interest will be determined from time to time and will continue thereafter until a new rate is determined. We may use different rates of excess interest for different portions of the contract fund.  We may from time to time guarantee rates of excess interest on some portions of the contract fund.

CHARGE FOR EXPECTED MORTALITY

     On each monthly date, we will deduct a charge for expected mortality. The maximum amount we can deduct is computed as the maximum monthly mortality rate multiplied by the coverage amount. The coverage amount is the difference between the insurance amount and the adjusted contract fund. The adjusted contract fund is equal to the tabular contract fund at the end of the contract year multiplied by 0.980517829, plus the contract fund before deduction of any monthly charges due on the monthly date, minus the tabular contract fund on the monthly date.

     The maximum monthly mortality rates are based on the Insured's sex, rating class, and attained age and are shown in the contract data pages. We may use lower rates. At least once every five years, but not more often than once a year, we will consider the need to change the rates. We will change them only if we do so for all contracts like this one dated in the same year as this one.

(VALB--88)                                                                           Page 17

CHARGE FOR EXTRA RATING CLASS

     If the contract is not in default past its days of grace and there is an extra charge because of the rating class of the Insured, we will deduct it from the contract fund on each monthly date. The maximum amount of any charge is included in the amount shown in the contract data pages under Schedule of Monthly Deductions from the Contract Fund.

CHARGE FOR EXTRA BENEFITS

     If the contract has extra benefits, we will deduct the charges for them from the contract fund on each monthly date. The maximum amount of any such charges are included in the amount shown in the contract data pages under Schedule of Monthly Deductions from the Contract Fund.

CHARGES FOR ADMINISTRATION SALES EXPENSES AND MINIMUM DEATH BENEFIT GUARANTEE

     If the contract is not in default past its days of grace, we will deduct a charge for administration and a charge for sales expenses from the contract fund on each monthly date. We will also deduct a charge for guaranteeing that the investment performance of the variable investment options will not reduce the death benefit below the face amount provided scheduled premiums are paid when due and you make no loans or withdrawals. We show the maximum amount of these charges in the contract data pages under Schedule of Monthly Deductions from the Contract Fund.

- --------------------------------------------------------------------------------------------------------------------------------------------------------

CONTRACT VALUE OPTIONS

BENEFIT AFTER THE GRACE PERIOD

     If the contract is in default beyond its days of grace, we will use any net cash value to keep the contract in force as one of three kinds of insurance:

     1. Extended insurance applies to most contracts.

     2. Fixed reduced paid-up insurance always applies if we issued the contract in a rating class for which we do not provide extended insurance; in this case, the phrase No Extended Insurance will appear under the heading Rating Class in the contract data pages.

     3. Variable reduced paid-up insurance applies if the amount of paid-up insurance would be at least as great as the amount of extended insurance and the contract was issued in a rating class permitting extended insurance.

     We describe each kind of insurance below. Any extra benefit will end as soon as the contract is in default past its days of grace, unless the form that describes the extra benefit states otherwise.

EXTENDED INSURANCE

     This will be term insurance on the Insured's life. We will pay the amount of term insurance if the Insured dies in the term we describe below. Before the end of the term there will be cash values but no loan value.

     The amount of term insurance will be: (1) the insurance amount, plus (2) any dividend credits minus (3) any contract debt. The term is a period of time that will start on the day the contract went into default. The length of the term will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.

     There may be extra days of term insurance. This will occur if, on the day the contract goes into default, the term of extended insurance provided by the net cash value does not exceed 90 days, or the number of days the contract was in force before the default began, if less. The number of extra days will be: (1) 90, or the number of days the contract was in force before the default began, if less, minus (2) the number of days of extended insurance that would be provided by the net cash value if there were no contract debt. The extra days, if any, start on the day after the last day of term insurance provided by the net cash value, if any. If there is no such term insurance, they start on the day the contract goes into default. The term insurance for the extra days has no cash value. There will be no extra days if you replace the extended insurance with reduced paid-up insurance or you surrender the contract before the extra days start.

FIXED REDUCED PAID-UP INSURANCE

     This will be paid-up life insurance on the Insured's life. We will pay the amount of this insurance when the Insured dies. There will be cash values and loan values.

(VALB--88)                                                                           Page 18

     The amount of this insurance will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.

VARIABLE REDUCED PAID-UP INSURANCE

     This will be paid-up variable life insurance on the Insured's life. We will pay the amount of this insurance when the Insured dies. The death benefit may change from day to day, as we explain below, but if there is no contract debt it will not be less than the minimum guaranteed amount. There will be cash values and loan values.

     The minimum guaranteed amount of insurance will be what is provided when we use the net cash value at the net single premium rate. This rate depends on the Insured's issue age and sex and on the length of time since the contract date.  The amount payable in the event of death will be the greater of (a) the minimum guaranteed amount, and (b) the contract fund divided by the net single premium per $1 at the Insured's attained age. In either case the amount will be adjusted for any contract debt.

     The variable reduced paid-up insurance option will be available only if the minimum guaranteed amount under the option is at least $5,000 and if we issued the contract in a rating class permitting extended insurance.

COMPUTATIONS

     We will make all computations for any of these benefits as of the date the contract goes into default. But we will consider any dividend credits you surrender, any loan you take out or pay back, or any premium payments, withdrawals, or changes in face amount you make in the days of grace.

OPTIONAL BENEFIT

     You may choose to replace any extended insurance that has a cash value by fixed reduced paid-up insurance or by variable reduced paid-up insurance if it is available. To make this choice you must do so in writing in a form that meets our needs not more than three months after the date the contract goes into default. You must also send the contract to us to be endorsed.

CASH VALUE OPTION

     You may surrender this contract for its net cash value. The net cash value at any time is the cash value at that time less any contract debt. To surrender this contract, you must ask us in writing in a form that meets our needs. You must also send the contract to us. Here is how we will compute the net cash value:

     1. If the contract is not in default, the net cash value on any date will be the contract fund, before deduction of any monthly charges due on that date, minus any surrender charge, plus any dividend credits, minus any contract debt.  The Schedule of Maximum Surrender Charges for this contract is in the contract data pages.

     2. If the contract is in default during its days of grace, we will compute the net cash value as of the date the contract went into default. But we will adjust this value for any dividend credits you surrender, any loan you take out or pay back, and any premium payments, withdrawals or decreases in face amount you make in the days of grace.

     3. If the contract is in default beyond its days of grace, the net cash value will be either: (1) the net value on that date of any extended insurance benefit then in force, or (2) the net value on that date of any reduced paid-up insurance benefit then in force, including any dividend credits, less any contract debt.

     Within thirty days after an anniversary, the net cash value of any extended insurance or fixed reduced paid-up insurance will not be less than the value on that anniversary adjusted for any dividend credits you surrender and any loan you take out or pay back in those thirty days.

     We will usually pay any net cash value within seven days after we receive your request and the contract at our Home Office. But we have the right to defer paying the part of the proceeds that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds for up to six months. If we do so for more than thirty days, we will pay interest at the rate of 3% a year.

(VALB--88)                                                                           Page 19

TABULAR VALUES

     We show tabular contract fund values and tabular cash values at the ends of contract years in the contract data pages.

     If we need to compute tabular values at some time during a contract year, we will count the time since the start of the year. We will let you know the tabular values for other durations if you ask for them.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

LOANS

LOAN REQUIREMENTS

     You may borrow from us on the contract. All these conditions must be met:

     1. The Insured must be living.

     2. The contract must be in force other than as extended insurance.

     3. The contract debt will not be more than the loan value.

     4. As sole security for the loan, you assign the contract to us in a form that meets our needs.

     5. Except to pay premiums on this contract, you may not borrow less than $200 at any one time.

     If there is already contract debt when you borrow from us, we will add the new amount you borrow to that debt.

CONTRACT DEBT

     Contract debt at any time means the loan on the contract, plus the interest we have charged that is not yet due and that we have not yet added to the loan.

     Example 1: Suppose the contract has a loan value of $6,000. A few months ago you borrowed $1,500. By now there is interest of $55 charged but not yet due. The contract debt is now $1,555, which is made up of the $1,500 loan and the $55 interest.

LOAN VALUE

     You may borrow any amount up to the difference between the loan value and any existing contract debt. Except as we state in the next paragraph, the loan value at any time is equal to the sum of (a) 90% of the portion of the cash value that is attributable to the variable investment options, and (b) the balance of the cash value.

     There are two exceptions. The first is that, if the contract is in default, the loan value during the days of grace is what it was on the date of default adjusted for any dividend credits you surrender and any premium payments, withdrawals, or decreases in face amount you make in the days of grace. The second is that, if the contract is in force as fixed reduced paid-up insurance, the loan value is equal to the amount that would grow at interest to equal the cash value on the next anniversary.

     Example 2: Suppose, in example 1, you want to borrow all that you can. We will lend you $4,445 which is the difference between the $6,000 loan value and the $1,555 contract debt. This will increase the contract debt to $6,000. We will add the new amount borrowed to the existing loan and will charge interest on it, too.

INTEREST CHARGE

     You may select either the fixed loan rate option or the variable loan rate option. Both are described below. We show on page 3 the option you have selected. If you request a change from one option to the other and we agree, we will tell you the effective date of the change.

     We charge interest daily on any loan. Interest is due on each contract anniversary, or when the loan is paid back, whichever comes first. If interest is not paid when due, it becomes part of the loan. Then we start to charge interest on it, too.

(VALB--88)                                                                           Page 20

     Example 3: Suppose the contract date is in 1988. Six months before the anniversary in 1997 you borrow $1,600 out of a $4,000 loan value. We charge 5-1/2% a year. Three months later, but still three months before the anniversary, we will have charged about $22 interest. This amount will be a few cents more or less than $22 since some months have more days than others. The interest will not be due until the anniversary unless the loan is paid back sooner. The loan will still be $1,600. The contract debt will be $1,622, since contract debt includes interest charged but not yet due.

     On the anniversary in 1997 we will have charged about $44 interest. The interest will then be due.

     Example 4: Suppose the $44 interest in example 3 was paid on the anniversary. The loan and contract debt each became $1,600 right after the payment.

     Example 5: Suppose the $44 interest in example 3 was not paid on the anniversary. The interest became part of the loan, and we began to charge interest on it, too. The loan and contract debt each became $1,644.

FIXED LOAN RATE OPTION

     The loan interest rate is 5-1/2% a year.

VARIABLE LOAN RATE OPTION

     The loan interest rate is the annual rate we set from time to time. The rate will never be greater than is permitted by law. It will change only on a contract anniversary.

        Before the start of each contract year, we will determine the loan interest rate we can charge for that contract year. To do this, we will first find the rate that is the greater of: (1) The Published Monthly Average (which we describe below) for the calendar month ending two months before the calendar month of the contract anniversary; and (2) 5%.

     If that greater rate is at least 1/2% more than the loan interest rate we had set for the current contract year, we have the right to increase the loan interest rate by at least 1/2%, up to that greater rate. If it is at least 1/2% less, we will decrease the loan interest rate to be no more than the greater rate. We will not change the loan interest rate by less than 1/2%.

     When you make a loan we will tell you the initial interest rate for the loan. We will send you a notice if there is to be an increase in the rate.

     The Published Monthly Average means:

     1. Moody's Corporate Bond Yield Average--Monthly Average Corporates, as published by Moody's Investors Service, Inc. or any successor to that service; or

     2. If that average is no longer published, a substantially similar average, established by the insurance regulator where this contract is delivered.

REPAYMENT

     All or part of any contract debt may be paid back at any time while the Insured is living. But if there is contract debt at the end of the last day of grace when the contract is in default, it will be deducted from the cash value to determine the net cash value. When we settle the contract, any contract debt is due us. We will make an adjustment so that the proceeds will not include the amount of that debt.

EFFECT OF A LOAN

     When you take a loan, the amount of the loan continues to be part of the contract fund and is credited with interest at the guaranteed rate of 4% a year. If you have selected the variable loan rate option, we will credit excess interest at an effective rate of not less than the loan interest rate for the contract year less 5%.

     We will reduce the portion of the contract fund allocated to the investment options by the amount you borrow, and by loan interest that becomes part of the loan because it is not paid when due.

(VALB--88)                                                                           Page 21

     On each transaction date, if there is a contract loan outstanding, we will increase the portion of the contract fund in the investment options by interest credits accrued on the loan since the last transaction date. When you repay all or part of a loan we will increase the portion of the contract fund in the investment options by the amount of loan you repay, plus interest credits accrued on the loan since the last transaction date. We will not increase the portion of the contract fund allocated to the investment options by loan interest that is paid before we make it part of the loan.

EXCESS CONTRACT DEBT

     If contract debt ever grows to be equal to or more than the cash value, all the contract's benefits will end 61 days after we mail a notice to you and any assignee we know of. Also, we may send a notice to the Insured's last known address. In the notice we will state the amount that, if paid to us, will keep the contract's benefits from ending for a limited time.

POSTPONEMENT OF LOAN

     We will usually make a loan within seven days after we receive your request at our Home Office. But we have the right to postpone making the part of the loan that is to come from any investment option provided by a separate account registered under the Investment Company Act of 1940 if: (1) the New York Stock Exchange is closed; or (2) the SEC requires that trading be restricted or declares an emergency. We have the right to postpone paying you the remainder of the proceeds of a loan for up to six months, unless it will be used to pay premiums on this or other contracts with us.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

SETTLEMENT OPTIONS

PAYEE DEFINED

     In these provisions and under the Automatic Mode of Settlement, the word payee means a person who has a right to receive a settlement under the contract.  Such a person may be the Insured, the owner, a beneficiary, or a contingent

payee.

CHOOSING AN OPTION

     A payee may choose an option for all or part of any proceeds or residue that becomes payable to him or her in one sum. We describe residue on page 23.

     In some cases, a payee will need our consent to choose an option. We describe these cases under Conditions.

OPTIONS DESCRIBED

     Here are the options we offer. We may also consent to other arrangements.

OPTION 1 (INSTALMENTS FOR A FIXED PERIOD)

     We will make equal payments for up to 25 years based on the Option 1 Table.  The payments will include interest at an effective rate of 3-1/2% a year. We may credit more interest. If and while we do so, the payments will be larger.

OPTION 2 (LIFE INCOME)

     We will make equal monthly payments for as long as the person on whose life the settlement is based lives, with payments certain for the period chosen. The choices are either ten years (10-Year Certain) or until the sum of the payments equals the amount put under this option (Instalment Refund). The amount of each payment will be based on the Option 2 Table and on the sex and age, on the due date of the first payment, of the person on whose life the settlement is based. But if a choice is made more than two years after the contract proceeds first become payable, we may use the Option 2 rates in ordinary policies we regularly issue, based on United States currency, on the due date of the first payment. On request, we will quote the payment rates in policies we then issue. We must have proof of the date of birth of the person on whose life the settlement is based. The settlement will share in our surplus to the extent and in the way we decide.

(VALB--88)                                                                           Page 22

OPTION 3 (INTEREST PAYMENT)

     We will hold an amount at interest. We will pay interest at an effective rate of at least 3% a year ($30.00 annually, $14.89 semi-annually, $7.42 quarterly or $2.47 monthly per $1,000). We may pay more interest.

OPTION 4 (INSTALMENTS OF A FIXED AMOUNT)

     We will make equal annual, semi-annual, quarterly or monthly payments if they total at least $90 a year for each $1,000 put under this option. We will credit the unpaid balance with interest at an effective rate of at least 3-1/2% a year. We may credit more interest. If we do so, the balance will be larger. The final payment will be any balance equal to or less than one payment.

OPTION 5 (NONPARTICIPATING INCOME)

     We will make payments like those of any annuity we then regularly issue that: (1) is based on United States currency; (2) is bought by a single sum; (3) does not provide for dividends; and (4) does not normally provide for deferral of the first payment. The payment will be at least what we would pay under that kind of annuity with its first payment due on its contract date. At least one of the persons on whose life the Option 5 is based must be a payee. If a life income is chosen, we must have proof of the date of birth of any person on whose life the option is based. Option 5 cannot be chosen more than 30 days before the due date of the first payment. On request, we will quote the payment that would

apply for any amount placed under the option at that time.

FIRST PAYMENT DUE DATE

     Unless a different date is stated when the option is chosen: (1) the first payment for Option 3 will be due at the end of the chosen payment interval; and (2) the first payment for any of the other options will be due on the date the option takes effect.

RESIDUE DESCRIBED

     For Options 1 and 2, residue on any date means the then present value of any unpaid payments certain. We will compute it at an effective interest rate of 3-1/2% a year. But we will use the rate we used to compute the actual Option 2 payments if they were not based on the table in this contract.

     For Options 3 and 4, residue on any date means any unpaid balance with interest to that date.

     For Option 5, it means the then present value of any unpaid payments certain. We will compute it at the interest rate to which we refer in Option 5.

     For Options 2 and 5, residue does not include the value of any payments that may become due after the certain period.

WITHDRAWAL OF RESIDUE

     Unless otherwise stated when the option is chosen: (1) under Options l and 2, the residue may be withdrawn; and (2) under Options 3 and 4 all, or any part not less than $100, of the residue may be withdrawn. If an Option 3 residue is reduced to less than $1,000, we have the right to pay it in one sum. Under Option 2, withdrawal of the residue will not affect any payments that may become due after the certain period; the value of those payments cannot be withdrawn.  Instead, the payments will start again if they were based on the life of a person who lives past the certain period.

     For Option 5, the residue may not be withdrawn while the payee and any other person on whose life the option is based is living. But, unless otherwise stated. when the option is chosen, after the death of the last of them to die any residue not already paid in one sum may be withdrawn.

DESIGNATING CONTINGENT PAYEE(S)

     A payee under an option has the right, unless otherwise stated, to name or change a contingent payee to receive any residue at that payee's death. This may be done only if: (1) the payee has the full right to withdraw the residue, (2) the residue would otherwise have been payable to that payee's estate at death, or (3) a settlement with payments certain is being made in accord with Option 5.

     A payee who has this right may choose, or change the choice of, an option for all or part of the residue. In some cases, the payee will need our consent to choose or change an option. We describe these cases under Conditions.

     Any request to exercise any of these rights must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office. Then the interest of anyone who is being removed will end as of the date of the request, even if the payee who made the request is not living when we file it.

(VALB--88)                                                                           Page 23

CHANGING OPTIONS

     A payee under Option 1, 3, or 4 may choose another option for any sum that the payee could withdraw on the date the chosen option is to start. That date may be before the date the payee makes the choice only if we consent. In some cases, the payee will need our consent to choose or change an option. We describe these cases next.

CONDITIONS

     Under any of these conditions, our consent is needed for an option to be used for any person:

     1. The person is not a natural person who will be paid in his or her own right.

     2. The person will be paid as assignee.

     3. The amount to be held for the person under Option 3 is less than $1,000.  But we will hold any amount for at least one year in accord with the Automatic Mode of Settlement.

     4. Each payment to the person under the option would be less than $20.

     5. The option is for residue arising other than at (a) the Insured's death, or (b) the death of the beneficiary who was entitled to be paid as of the date of the Insured's death.

     6. The option is for proceeds that arise other than from the Insured's death, and we are settling with an owner or any other person who is not the Insured.

DEATH OF PAYEE

     If a payee under an option dies and if no other distribution is shown, we will pay any residue under that option in one sum to the payee's estate.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------

AUTOMATIC MODE OF SETTLEMENT

APPLICABILITY

     These provisions apply to proceeds arising from the Insured's death and payable in one sum to a payee who is a beneficiary. They do not apply to any periodic payment.

INTEREST ON PROCEEDS

     We will hold the proceeds at interest under Option 3 of the Settlement Options provisions. The payee may withdraw the residue. We will pay it promptly on request. We will pay interest annually unless we agree to pay it more often.  We have the right to pay the residue in one sum after one year if: (1) the payee is not a natural person who will be paid in his or her own right; (2) the payee will be paid as assignee; or (3) the original amount we hold under Option 3 for the payee is less than $1,000.

SETTLEMENT AT PAYEE'S DEATH

     If the payee dies and leaves an Option 3 residue, we will honor any contingent payee provision then in effect. If there is none, here is what we will do. We will look to the beneficiary designation of the contract; we will see what other beneficiary(ies), if any, would have been entitled to the portion of the proceeds that produced the Option 3 residue if the Insured had not died until immediately after the payee died. Then we will pay the residue in one sum to such other beneficiary(ies), in accord with that designation. But if, as stated in that designation, payment would be due the estate of someone else, we will instead pay the estate of the payee.

     Example: Suppose the class 1 beneficiary is Jane and the class 2 beneficiaries are Paul and John. Jane was living when the Insured died. Jane later died without having chosen an option or naming someone other than Paul and John as contingent payee. If Paul and John are living at Jane's death we owe them the residue. If only one of them is living then, and if the contract called for payment to the survivor of them, we owe him the residue. If neither of them is living then, we owe Jane's estate.

SPENDTHRIFT AND CREDITOR

     A beneficiary or contingent payee may not, at or after the Insured's death, assign, transfer, or encumber any benefit payable. To the extent allowed by law, the benefits will not be subject to the claims of any creditor of any beneficiary or contingent payee.

(VALB--88)                                                                           Page 24

                                 OPTION 1 TABLE

                   ------------------------------------------

                   MINIMUM AMOUNT OF MONTHLY PAYMENT FOR

                   EACH $1,000, THE FIRST PAYABLE IMMEDIATELY

                   ------------------------------------------

Number of Years        Monthly Payment

-----------------------------------------------------

             1                   $84.65

2                    43.05

3                    29.19

4                    22.27

5                    18.12

6                    15.35

7                    13.38

8                    11.90

9                    10.75

10                     9.83

11                     9.09

12                     8.46

13                     7.94

14                     7.49

15                     7.10

16                     6.76

17                     6.47

18                     6.20

19                     5.97

20                     5.75

21                     5.56

22                     5.39

23                     5.24

24                     5.09

25                     4.96

                   ------------------------------------------

                   Multiply the monthly amount by 2.989 for quarterly, 5.952 for semi-annual or 11.804

                   for annual.

                   ------------------------------------------

- -------------------------------------------------------------------------------------------------------

                                           OPTION 2 TABLE

- -------------------------------------------------------------------------------------------------------

          MINIMUM AMOUNT OF MONTHLY PAYMENT FOR EACH $1,000, THE FIRST PAYABLE IMMEDIATELY

- -------------------------------------------------------------------------------------------------------

KIND OF LIFE INCOME                                                                                                                                  &# 160;       KIND OF LIFE INCOME

-------------------------------                                                                                                                                &# 160;           - -------------------------------

AGE LAST BIRTHDAY	10-Year Certain		Instalment Refund		AGE  LAST BIRTHDAY	10-Year Certain		Instalment Refund
	Male	Female	Male	Female		Male	Female	Male	Female

- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------

10 and under 11 12 13 14   15 16 17 18 19   20 21 22 23 24   25 26 27 28 29   30 31 32 33 34   35 36 37 38 39   40 41 42 43 44   $3.18   3.19 3.20 3.21 3.22   3.24 3.25 3.27 3.28 3.30   3.31 3.33 3.35 3.36 3.38   3.40 3.42 3.45 3.47 3.49   3.52 3.54 3.57 3.60 3.63   3.66 3.69 3.72 3.76 3.80   3.84 3.88 3.92 3.97 4.01   $3.11   3.12 3.13 3.14 3.15   3.16 3.17 3.19 3.20 3.21   3.22 3.24 3.25 3.26 3.28   3.30 3.31 3.33 3.35 3.37   3.39 3.41 3.43 3.45 3.47   3.50 3.52 3.55 3.58 3.61   3.64 3.67 3.70 3.74 3.78   $3.17   3.18 3.19 3.20 3.21   3.23 3.24 3.25 3.27 3.28   3.30 3.32 3.33 3.35 3.37   3.39 3.41 3.43 3.45 3.47   3.49 3.52 3.54 3.57 3.60   3.63 3.66 3.69 3.72 3.75   3.79 3.82 3.86 3.90 3.94   $3.10   3.11 3.12 3.13 3.14   3.15 3.16 3.18 3.19 3.20   3.21 3.23 3.24 3.25 3.27   3.29 3.30 3.32 3.34 3.35   3.37 3.39 3.41 3.44 3.46   3.48 3.50 3.53 3.56 3.55   3.61 3.64 3.67 3.71 3.74   45 46 47 48 49   50 51 52 53 54   55 56 57 58 59   60 61 62 63 64   65 66 67 68 69   70 71 72 73 74   75 76 77 78 79 80 and over $4.06 4.12 4.17 4.23 4.28   4.35 4.41 4.48 4.55 4.62   4.70 4.78 4.86 4.95 5.05   5.15 5.25 5.36 5.48 5.60   5.73 5.87 6.01 6.15 6.30   6.46 6.62 6.79 6.96 7.13   7.30 7.48 7.66 7.83 8.00 8.17 $3.82 3.86 3.90 3.94 3.99   4.04 4.09 4.15 4.21 4.27   4.33 4.40 4.47 4.54 4.62   4.71 4.79 4.89 4.98 5.09   5.20 5.31 5.43 5.56 5.70   5.84 5.99 6.15 6.31 6.49   6.67 6.85 7.04 7.24 7.44 7.64   $3.99 4.03 4.08 4.13 4.18   4.24 4.29 4.35 4.41 4.48   4.55 4.62 4.69 4.77 4.86   4.94 5.03 5.13 5.23 5.34   5.45 5.57 5.70 5.83 5.97   6.11 6.27 6.43 6.60 6.78   6.97 7.17 7.38 7.60 7.83 8.07 $3.78 3.81 3.85 3.90 3.94   3.98 4.03 4.08 4.13 4.19   4.24 4.30 4.37 4.43 4.50   4.58 4.66 4.74 4.82 4.92   5.01 5.11 5.22 5.34 5.46   5.58 5.72 5.86 6.01 6.18   6.35 6.53 6.72 6.93 7.15 7.38  

- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

(VALB--88)                                                                           Page 25

- ------------------------------------------------------------------------------------------------------------------------------------------------------------

ENDORSEMENTS

(Only we can endorse this contract.)

VOTING RIGHTS

     We are a mutual life insurance company. Our principal office is in Newark, New Jersey, and we are incorporated in that State. By law, we have 24 directors.  This includes 16 elected by our policyholders (four each year for four year

terms), two of our officers, and six public directors named by New Jersey's Chief Justice.

     The election is held on the first Tuesday in April from 10:00 A.M. to 2:00 P.M. in our office at Prudential Plaza, Newark, N.J. After this contract has been in force for one year, you may vote either in person or by mail. We will send you a ballot if you ask for one. Just write to the Secretary at Prudential Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By law, your request must show your name, address, policy number and date of birth.

Only individuals at least 18 years old may vote.

HOME OFFICE LOCATIONS

     When we use the term Home Office, we mean any of these Prudential offices:

Corporate Office, Newark, N.J.                           North Central Home Office,

Minneapolis, Minn.

Eastern Home Office,                                           South-Central Home Office,

Fort Washington, Pa.                                           Jacksonville, Fla.

   The Prudential Insurance Company of America,

    By /s/ SPECIMEN

       ------------------------

         Secretary

COMB 86184-88

(VALB--88)                                                                           Page 26

ENDORSEMENTS

(Only we can endorse this contract)

BASIS OF COMPUTATION

MORTALITY TABLES DESCRIBED

     Except as we state in the next paragraph, (1) we base all net premiums and net values to which we refer in this contract on the Insured's issue age and sex and on the length of time since the contract date; (2) we use the Commissioners 1980 Standard Ordinary Non-Smokers Mortality Table; and (3) we use continuous functions based on age last birthday.

     For extended insurance, we base net premiums and net values on the Commissioners 1980 Non-Smokers Extended Term Insurance Table.

INTEREST RATE

     For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year.

EXCLUSIONS

     When we compute net values, tabular values, reduced paid-up insurance and extended insurance, we exclude the value of any supplementary benefits and any other extra benefits added by rider to this contract.

VALUES AFTER 20 CONTRACT YEARS

     Tabular values not shown on page 4 will be computed using the standard nonforfeiture method and the mortality tables and interest rate we describe above. We show the nonforfeiture factors in the contract data pages.

MINIMUM LEGAL VALUES

     The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required we have given the insurance regulator a detailed statement of how we compute values and benefits.

     The Prudential Insurance Company of America,

                        By  [SPECIMEN SIGNATURE]

                            Secretary

ORD 86185--88

- ----------------------------------------------------===============================================================================

                                              Part 1 Application for Life Insurance to

[LOGO]                                        [X] The Prudential Insurance Company of America

                                              [ ] Pruco Life Insurance Company

                                                  A Subsidiary of The Prudential Insurance Company of America

                                               No. XX XXX XXX

- ------------------------------------------------------------------------------------------------------------

1a. Proposed Insured's name--first, initial, last (Print)              1b. Sex     2a. Date of birth     2b. Age      2c. Place of birth

                                                                                                     M   F            Mo.  Day  Yr.

                                                                                                     [X] [ ]             7      10    52         35         (Name of State)

    JOHN DOE

- ---------------------------------------------------------------------------------------------------------

3. [ ] Single  [X] Married  [ ] Widowed  [ ] Separated  [ ] Divorced   4. Social Security No. XXX/XX/XXXX

- ------------------------------------------------------------------------------------------------------------

5a. Occupation(s)  Clerk                                       5b. Duties        Clerical Duties

- -----------------------------------------------------------------------------------------------------------

6. Address for mail    No.            Street                 City                 State                    Zip

                                  15            Blank Street    (Name of City)   (Name of State)   XXXXX

- ------------------------------------------------------------------------------------------------------------

7a. Kind of policy  Variable Appreciable Life         7b. Initial amount                                   8. Accidental death coverage

             (Level Death Benefit)                                     $50,000 initial amount                           $

 ------------------------------------------------------------------------------------------------------------

9. Beneficiary: (Include name, age and relationship.)   10.List all life insurance on proposed Insured.    Check here if None [ ]

   a. Primary (Class 1):                       Company           Initial               Yr.           Kind                      Medical

      Mary Doe, 35, Spouse                                             amt.            issued    (Indiv., Group)          Yes   No

   ______________________________________                                                                             [ ]   [ ]

   _____________________________________________________________                               [ ]   [ ]

   ______________________________________________________________

    b. Contingent (Class 2) if any:                                                                                                         [ ]   [ ]

       Robert Doe, 10, Son                                 _______________________________                      [ ]   [ ]

___________________________________________________________________                       [ ]   [ ]

- -----------------------------------------------------------------------------------------------------

11. Other person(s) proposed for coverage including the Applicant for Applicant's Waiver of Premium benefit (AWP)

                                                       Relationship to   Date of birth                       Total life insurance

    Name--first, initial, last                  Sex    proposed Insured  Mo.  Day  Yr.  Age  Place of birth  in all companies

a.                                                          Spouse                                           $

______________________________________________________________________________________________________________

b.                                                                                                           $

______________________________________________________________________________________________________________

c.                                                                                                           $

______________________________________________________________________________________________________________

d.                                                                                                           $

______________________________________________________________________________________________________________

e.                                                                                                           $

_________________________________________________ ____________________________________________________________

f.                                                                                                           $

- ------------------------------------------------------------------------------------------------------------

12. Supplementary benefits and riders:

a. For proposed Insured                               b. For spouse, children, Applicant for AWP

Type and duration of benefit       Amount             Type and duration of benefit                Amount

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

                                                     $                                                                                    $

______________________________________________________________________________________________________________

[ ] Option to Purchase Additional Ins. $                           [ ] Applicant's Waiver of Premium benefit

- ------------------------------------------------------------------------------------------------------------

13. State any special request.

- ------------------------------------------------------------------------------------------------------------

14. Has any person named in 1a or 11, within the last 12 months:

    a. been treated by a doctor for or had a known heart attack, stroke or cancer (including melanoma) otherYes   No

       than of the skin? .............................................................................................  [ ]      [X]

    b. had an electrocardiogram for any physical complaint, or taken medication for high blood pressure? .............................................................................................  [ ]  [X]

- ------------------------------------------------------------------------------------------------------------

15. Premiums payable  [X] Ann.  [ ] Semi-Ann.  [ ] Quar.  [ ] Mon.  [ ] Pay. Budg.  [ ] Pru-Matic  [ ] Gov't. Allot.

- ------------------------------------------------------------------------------------------------------------

16. Amount paid $454.59                                   [ ] None (Must be "None" if either 14a or b is answered "Yes".)

- -----------------------------------------------------------------------------------------------------------

17. Is a medical examination to be made on:                                                Yes   No

    a. the proposed Insured? .........................................................................................  [ ]  [X]

    b. spouse (if proposed for coverage)? .........................................................................................  [ ]  [ ]

- ------------------------------------------------------------------------------------------------------------

18. If 17a or b is "Yes", is it agreed that no insurance will take effect on anyone proposed for coverage until         Yes   No

    the person(s) indicated in 17 have been examined, even if 16 shows that an amount has been paid? .................  [ ]  [ ]

- ------------------------------------------------------------------------------------------------------------

 ORD 84376-86                                     Page 1 (Continued on page 2)

<PAGE>

<C>

- -----------------------------------------------------------------------------------------------------------------------------------

Continuation of Part 1 of Application

- -----------------------------------------------------------------------------------------------------------------------------------

19. Will this insurance replace or change any existing insurance or annuity in any company on any person named  in 1a or 11?

If "Yes", give their names, name of company, plan, amount, policy numbers and enclose any  required state replacement form(s).        Yes   No

                                                                                                                                              0;                                                                         [ ]   [X]

----------------------------------------------------------------------------------------

20. Is anyone applying for, or trying to reinstate, life or health insurance on any person named in 1a or 11 in this or any company?

If "Yes", give amount, details and company.           Yes   No                                                   [ ]   [X]

- -------------------------------------------------------------------------------------

21. Does any person named in 1a or 11 plan to live or travel outside the United States and Canada within the  next 12 months? If "Yes", give country(ies), purpose and duration of trip.  Yes   No

                                                                       [ ]   [X]

- --------------------------------------------------------------------------------------

22. Has any person named in 1a or 11 operated or had any duties aboard an aircraft, glider, balloon, or like device, within the last 2 years, or does any such person have any plans to do so in the future? If "Yes", complete Aviation Questionnaire.              Yes  No

                                                                                                                                              0;                       [ ]  [X]

----------------------------------------------------------------------------------------

23. Has any person named in 1a or 11 engaged in hazardous sports such as: auto, motorcycle or power boat sports; bobsledding, scuba or skin diving; mountain climbing; parachuting or sky diving; snowmobile racing or any other hazardous sport or hobby within the last 2 years or does any such person plan to do so in the future? If "Yes", complete Avocation Questionnaire.               Yes  No

                                                                                                                                              0;         [ ]  [X]

----------------------------------------------------------------------------------------

24. Has any person (age 15 or over) named in 1a or 11 in the last 3 years:                                       Yes  No

    a. had a driver's license denied, suspended or revoked?         .........................................................                    [ ]  [X]

    b. been convicted of three or more moving violations of any motor vehicle law or of driving while under

       the influence of alcohol or drugs? ...........................................................................  [ ]  [X]

    c. been involved as a driver in 2 or more auto accidents? .......................................................                      [ ]  [X]

    If "Yes", give name, driver's license number and state of issue, type of violation and reason for license

    denial, suspension or revocation.

----------------------------------------------------------------------------------------

25. a. Has the proposed Insured smoked cigarettes within the past twelve months? ..............................   Yes [ ]  No [ ]

    b. Has the spouse (if proposed for coverage) smoked cigarettes within the past twelve months? .............   Yes [ ]  No [ ]

    c. If the proposed Insured or spouse has ever smoked cigarettes, cigars or a pipe, show date(s) last smoked:

                                  Cigarettes                                  Cigars                                       Pipe

Proposed Insured      Mo. _______     Yr. _______     Mo. _______     Yr. _______    Mo._______   Yr. _______

Spouse                      Mo. _______     Yr. _______     Mo. _______     Yr. _______    Mo._______   Yr. _______

- -------------------------------------------------------------------------------------

26. Changes made by the Company. (Not applicable in West Virginia)

----------------------------------------------------------------------------------------

To the best of the knowledge and belief of those who sign below, the statements in this application are complete and true. It is understood that, if any of the above statements (for example, the smoking data) is a material misrepresentation, coverage could be invalidated as a result. The beneficiary named in the application is for insurance payable upon death of (1) the Insured,and (2) an insured child after the death of the Insured if there is no insured spouse.

When the Company gives a Limited Insurance Agreement form, ORD 84376A-86, of the same date as this Part 1, coverage will start as shown in that form. Otherwise, no coverage will start unless: (1) a contract is issued, (2) it is accepted, and (3) the full first

premium is paid while all persons to be covered are living and their health remains as stated in Parts 1 and 2. If all these take place, coverage will start on the contract date. If the Company makes a change as indicated in 26 it will be approved by acceptance

of the contract. But where the law requires written consent for any change in the application, such change can be made only if those who sign this form approve the change in writing. No agent can make or change a contract, or waive any of the Company's rights or needs.

Ownership: Unless otherwise asked for above, the owner of the contract will be (1) the applicant if other than the proposed Insured, otherwise (2) the proposed Insured. But this is subject to any automatic transfer of ownership stated in the contract.

                      JOHN DOE

                    --------------------------------------------------------------------

                      Signature of Proposed Insured (If age 8 or over)

Dated at (Name of City/State)   on    Aug. 3, 1987

----------------    --------------------------------------------------------------------

          (City/State)                                         Signature of Applicant (If other than proposed Insured --

                                                               If applicant is a firm or corporation, show that company's name

Witness       JOHN ROE                                         By

- -----------------------------------------------------------    -----------------------

(Licensed agent must witness where required by law)            (Signature and title of officer signing for that company)

- -------------------------------------------------------------------------------------

ORD 84376-86

                                                       Page 2

The Prudential Insurance Company of America                      No. xx xxx xxx

A Supplement to the Life Insurance Application for a variable contract in which

John Doe is named as the proposed insured.

-------------------------------------------------------------------------

I BELIEVE THIS CONTRACT MEETS MY INSURANCE NEEDS AND FINANCIAL OBJECTIVES. I ACKNOWLEDGE RECEIPT OF A CURRENT PROSPECTUS FOR THE CONTRACT. I UNDERSTAND THAT THE CONTRACT'S VALUE AND DEATH BENEFIT MAY VARY DEPENDING ON THE CONTRACT'S INVESTMENT EXPERIENCE .......................................   YES [X]  NO [ ]

Date                                    Signature of Applicant

            Aug. 3, 1987                  JOHN DOE

- --------------------------------        -----------------------------------

 ORD 86218--88

- ---------------------------------------------------------------------------------------------------------------------------------------------------------

ENDORSEMENTS

(Only we can endorse this contract.)

(VALB--88)                                                                           Page 27

- --------------------------------------------------------------------------------

     Modified Premium Variable whole Life Insurance Policy with variable insurance amount. Insurance payable only upon death. Scheduled premiums payable throughout Insured's lifetime. Provision for optional additional premiums.  Benefits reflect premium payments, investment results and charges. Death benefit guaranteed if scheduled premiums duly paid and no contract debt or withdrawals.  Increase in face amount at attained age 21 if contract issued at age 14 or lower. Eligible for annual dividends as stated under Dividends.

VALB—88                                                                           Page 30

EX-99.D CONTRACTS

EXHIBIT 26(d)(ii)

RIDER FOR INSURED'S WAIVER OF PREMIUM BENEFIT

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

TOTAL DISABILITY BENEFIT

     We will pay scheduled premiums into the contract for you on their due dates while the Insured is totally disabled. But this is subject to all the provisions of this benefit and of the rest of this contract.

DISABILITY DEFINED

     When we use the words disability and disabled in this benefit we mean total disability and totally disabled. Here is how we define them: (1) until the Insured has stayed disabled for two years, we mean that he or she cannot, due to sickness or injury, do any of the duties of his or her regular occupation: but (2) after the Insured has stayed disabled for two years, we mean that he or she cannot, due to sickness or injury, do any gainful work for which he or she is reasonably fitted by education, training, or experience.

     Except for what we state in the next sentence, we will at no time regard an Insured as disabled who is doing gainful work for which he or she is reasonably fitted by education, training, or experience. We will regard an Insured as disabled, even if working or able to work, if he or she incurs, during a period in which premiums are eligible to be waived as we describe below, one of the following: (1) permanent and complete blindness of both eyes; or (2) physical severance of both hands at or above the wrists or both feet at or above the ankles; or (3) physical severance of one hand at or above the wrist and one foot at or above the ankle.

PREMIUMS ELIGIBLE TO BE PAID BY US

     If the Insured becomes disabled before the first contract anniversary following his or her 60th birthday and that disability begins: (1) on or after the first contract anniversary following his or her 5th birthday, if the contract date was before that birthday; or (2) on or after the contract date, if that date was on or after his or her 5th birthday, we will pay all scheduled premiums that fall due while he or she stays disabled.

     If the Insured becomes disabled on or after the first contract anniversary following his or her 60th birthday, we will pay only those scheduled premiums that fall due before the first contract anniversary following his or her 65th birthday and while he or she stays disabled.

     If the Insured becomes disabled on or after the first contract anniversary after his or her 65th birthday, we will not pay any scheduled premiums that fall due in that period of disability.

CONDITIONS

     Both of these conditions must be met: (1) The Insured must become disabled while this contract is in force and not in default past the last day of the grace period; (2) The Insured must stay disabled for a period of at least six months while living.

EXCEPTIONS

     We will not pay any scheduled premiums if the Insured becomes disabled from: (1) an injury he causes to himself, or she causes to herself, on purpose; or (2) sickness or injury due to service on or after the contract date in the armed forces of any country(ies) at war. The word war means declared or undeclared war and includes resistance to armed aggression.

SUCCESSIVE DISABILITIES

     Here is what happens if the Insured has at least one scheduled premium paid by us while disabled, then gets well so that he or she resumes making payments, and then becomes disabled again. In this case, we will not apply the six-month period that would otherwise be required by Condition (2) and will consider the second period of disability to be part of the first period unless: (1) the Insured has done gainful work, for which he or she is reasonably fitted, for at least six months between the periods; or (2) the Insured became disabled the second time from an entirely different cause.

     If we do not apply the six-month period required by Condition (2), we also will not count the days when there was no disability as part of the two year period when disability means the Insured cannot do any of the duties of his or her regular occupation.

AL 100B

NOTICE AND PROOF OF CLAIM

     Notice and proof of any claim must be given to us while the Insured is living and disabled, or as soon as reasonably possible. If notice or proof is not given as soon as reasonably possible, we will not pay any scheduled premium due more than one year before the date the notice or proof is given to us.

     We may also require proof at reasonable times that the Insured is still disabled. After he or she has been disabled for two years, we will not ask for proof of continued disability more than once a year; and we will require no further proof of continued disability after the first contract anniversary that follows the Insured's 65th birthday if he or she has been continually disabled for at least five years.

     As a part of any proof, we have the right to require that the Insured be examined at our expense by doctors of our choice.

WHEN WE WILL STOP PAYING PREMIUMS

     We will stop paying scheduled premiums if: (1) disability ends; or (2) we ask for proof that the Insured is disabled and we do not receive it; or (3) we require that the Insured be examined and he or she fails to do so.

CHANGES IN THE FACE AMOUNT

     If there was an increase or decrease in the face amount before we approved a claim under this benefit, but we find that the increase or decrease took effect on a monthly processing date on which the Insured was disabled we will restore the coverage to what it would have been if the increase or decrease had not taken effect.

BENEFIT PREMIUMS AND CHARGES

     We include the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

UNSCHEDULED PREMIUMS DURING DISABILITY

     You may make unscheduled premium payments if you wish, as provided in the Unscheduled Premiums section of the contract even when we are paying scheduled premiums that fall due during a period of disability.

TERMINATION

     This benefit will end and we will make no more scheduled premium payments for you on the earliest of:

     1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract;

     2. the end of the day before the first contract anniversary that follows the Insured's 65th birthday, unless the Insured has stayed disabled since before the first contract anniversary that follows the 60th birthday;

     3. the date the contract is surrendered under its Cash Value Option, if it has one; and

     4. the date the contract ends for any other reason.

     If you do not make any withdrawals from the contract starting on the date the Insured becomes disabled, the contract cannot go into default during the period we are paying scheduled premiums into the contract.

This Supplementary Benefit rider attached to this contract on the Contract Date

     The Prudential Insurance Company of America,

          By /s/ DOROTHY K. LIGHT

             Secretary

AL 100B

EXHIBIT 26(d)(iii)

RIDER FOR APPLICANT'S WAIVER OF PREMIUM BENEFIT

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

DEATH PROVISION

DEATH BENEFIT

     We will pay into the contract for you on their due dates those scheduled premiums that fall due after the applicant's death but before the benefit termination date which we show in the contract data pages. For us to do so, we must receive due proof that he or she died: (1) before that date and (2) while this contract is in force and not in default past the last day of the grace period. But this promise is subject to all the provisions of this benefit and of the rest of this contract.

SUICIDE EXCLUSION

     If the applicant, whether sane or insane, dies by suicide within the period that we state in the Suicide Exclusion under General Provisions and while this benefit is in force, we will not pay, under this benefit, the scheduled premiums we describe above. Instead, we will pay no more than the sum of the monthly charges deducted for the benefit plus the charge for applicable taxes.

DISABILITY PROVISION

TOTAL DISABILITY BENEFIT

     Before the benefit termination date, we will pay into the contract for you on their due dates scheduled premiums that fall due while the applicant is totally disabled. But this is subject to all the provisions of this benefit and of the rest of this contract.

DISABILITY DEFINED

     When we use the words disability and disabled in this benefit we mean total disability and totally disabled. Here is how we define them: (1) until the applicant has stayed disabled for two years, we mean that he or she cannot, due to sickness or injury, do any of the duties of his or her regular occupation; but (2) after the applicant has stayed disabled for two years, we mean that he or she cannot, due to sickness or injury, do any gainful work for which he or she is reasonably fitted by education, training, or experience.

     Except for what we state in the next sentence, we will at no time regard an applicant as disabled who is doing gainful work for which he or she is reasonably fitted by education, training, or experience. We will regard an applicant as disabled, even if working or able to work, if he or she incurs, during a period in which premiums are eligible to be waived as we describe below, one of the following: (1) permanent and complete blindness of both eyes; or (2) physical severance of both hands at or above the wrists or both feet at or above the ankles; or (3) physical severance of one hand at or above the wrist and one foot at or above the ankle.

PREMIUMS ELIGIBLE TO BE PAID BY US

     If the applicant becomes disabled before the first contract anniversary after his or her 65th birthday, we will pay only those scheduled premiums that fall due: (1) while he or she stays disabled; and (2) before the benefit termination date.

     If the applicant becomes disabled on or after: (1) the first contract anniversary after his or her 65th birthday, or (2) the benefit termination date, we will not pay any scheduled premium that falls due in that period of disability.

CONDITIONS

     Both of these conditions must be met: (1) The applicant must become disabled while this contract is in force and not in default past the last day of the grace period. (2) The applicant must stay disabled for a period of at least six months while living.

AL 150B

EXCEPTIONS

     We will not pay any scheduled premium if the applicant becomes disabled from: (1) an injury he causes to himself, or she causes to herself, on purpose; or (2) sickness or injury due to service on or after the contract date in the armed forces of any country(ies) at war. The word war means declared or undeclared war and includes resistance to armed aggression.

SUCCESSIVE DISABILITIES

     Here is what happens if the applicant has at least one scheduled premium paid by us while disabled, then gets well so that premium payment resumes, and then becomes disabled again. In this case, we will not apply the six-month period that would otherwise be required by Condition (2) and will consider the second period of disability to be part of the first period unless: (1) the applicant has done gainful work, for which he or she is reasonably fitted, for at least six months between the periods; or (2) the applicant became disabled the second time from an entirely different cause.

     If we do not apply the six-month period required by Condition (2), we also will not count the days when there was no disability as part of the two year period when disability means the applicant cannot do any of the duties of his or her regular occupation.

NOTICE AND PROOF OF CLAIM

     Notice and proof of any claim must be given to us while the applicant is living and disabled, or as soon as reasonably possible. If notice or proof is not given as soon as reasonably possible, we will not pay any scheduled premium due more than one year before the date the notice or proof is given to us.

     We may also require proof at reasonable times that the applicant is still disabled. After he or she has been disabled for two years, we will not ask for proof of continued disability more than once a year; and we will require no further proof of continued disability after the first contract anniversary that follows the applicant's 65th birthday if he or she has been continually disabled for at least five years.

     As a part of any proof, we have the right to require that the applicant be examined at our expense by doctors of our choice.

WHEN WE WILL STOP PAYING PREMIUMS

     We will stop paying scheduled premiums if: (1) disability ends; or (2) we ask for proof that the applicant is disabled and we do not receive it; or (3) we require that the applicant be examined and he or she fails to do so.

MISCELLANEOUS PROVISIONS

REINSTATEMENT

     If this contract is reinstated, it will not include this benefit on the life of the applicant unless we are given any facts we need to satisfy us that he or she is insurable for the benefit.

MISSTATEMENT OF AGE OR SEX

     If the applicant's stated age or sex or both are not correct, here is what we will do. We will change each benefit and any amount payable to what the premiums and charges would have bought for the correct age and sex.

CHANGES IN THE FACE AMOUNT

     If there was an increase or decrease in the face amount before we approved a claim under this benefit, but we find that the increase or decrease took effect on a monthly processing date on which the applicant was disabled we will restore the coverage to what it would have been if the increase or decrease had not taken effect.

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

     Benefit premiums and charges stop on the earlier of: (1) the first contract anniversary after the Insured's 24th birthday, and (2) the last contract anniversary before the benefit termination date.

UNSCHEDULED PREMIUMS DURING DISABILITY

     You may make unscheduled premium payments if you wish, as provided in the Unscheduled Premiums section of the contract, even when we are paying scheduled premiums that fall due during a period of the applicants' disability or because of the applicants' death.

AL 150B

TERMINATION

     This benefit will end on the earliest of:

     1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract;

     2. the end of the day that is the last premium due date before the benefit termination date we show on the contract data pages;

     3. the date the contract is surrendered under its Cash Value Option, if it has one; and

     4. the date the contract ends for any other reason.

     If you do not make any withdrawals from the contract starting on the date the applicant becomes disabled, the contract cannot go into default during the period we are paying scheduled premiums into the contract.

     Further, if you ask us in writing in the premium period, and we agree, we will cancel the benefit as of the date to which premiums are paid. Contract premiums due then and later will be reduced accordingly.

This Supplementary Benefit rider attached to this contract on the Contract Date.

     The Prudential Insurance Company of America,

     By /s/ DOROTHY K. LIGHT

            Secretary

AL 150B

EXHIBIT 26(d)(iv)

RIDER FOR INSURED'S ACCIDENTAL DEATH BENEFIT

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay the amount of this benefit that we show on the contract data pages for the Insured's accidental loss of life. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

MANNER OF PAYMENT

     We will include in the proceeds of this contract any payment under this benefit.

CONDITIONS

     Both of these conditions must be met: (1) We must receive due proof that the Insured's death was the direct result, independent of all other causes, of accidental bodily injury that occurred on or after the contract date. (2) The death must occur (a) no more than 90 days after the iniury; and (b) while the contract is in force.

EXCLUSIONS

     We will not pay under this benefit for death caused or contributed to by: (1) suicide or attempted suicide while sane or insane; or (2) infirmity or disease of mind or body or treatment for it; or (3) any infection other than one caused by an accidental cut or wound.

     Even if death is caused by accidental bodily injury, we will not pay for it under this benefit if it is caused or contributed to by: (1) service in the armed forces of any country(ies) at war; or (2) war or any act of war; or (3) travel by, or descent from, any aircraft if the Insured had any duties or acted in any capacity other than as a passenger at any time during the flight. But we will ignore (3) if all these statements are true of the aircraft: (a) it has fixed wings and a permitted gross takeoff weight of at least 75,000 pounds. (b) It is operated by an air carrier that is certificated under the laws of the United States or Canada to carry passengers to or from places in those countries. (c) It is not being operated for any armed forces for training or other purposes. As used here, the word aircraft includes rocket craft or any other vehicle for flight in or beyond the earth's atmosphere. The word war means declared or undeclared war and includes resistance to armed aggression.

AUTOMATIC REDUCTION

We have the right to limit the amount of this  benefit to no more than twice the face amount of this  contract.  If that face amount is decreased for any reason, we have the right to reduce  the  amount  of the  benefit  to twice the new face amount.

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the premium account and the contract fund.

     The monthly cnarge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

TERMINATION

     This benefit will end on the earliest of:

     1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract;

     2. the date the contract is surrendered under its Cash Value Option, if it has one; and

     3. the date the contract ends for any other reason.

     Further, if you ask us in writing, and we agree, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

This Supplementary Benefit rider attached to this contract on the ContractDate.

     The Prudential Insurance Company of America,

     By /s/ DOROTHY K. LIGHT

        Secretary

AL 110B

EXHIBIT 26(d)(v)

RIDER FOR LEVEL TERM INSURANCE BENEFIT ON LIFE OF INSURED

     This Benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay an amount under this benefit if we receive due proof that the Insured died: (1) in the term period for the benefit; and (2) while this contract is in force and not in default beyond the last day of the grace period.  Any proceeds under this contract that may arise from the Insured's death will include this amount. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

     We show the amount of term insurance on the contract data pages. We also show the term period for the benefit there. It starts on the contract date, which we show on the first page. The anniversary at the end of the term period is part of that period.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

     You may be able to exchange this benefit for a new contract of life insurance on the Insured's life. In any of these paragraphs, when we use the phrase new contract we mean the contract for which this benefit may be exchanged. You will not have to prove that the Insured is insurable.

CONDITIONS

     Your right to make this exchange is subject to all these conditions: (1) You must ask for the exchange in writing and in a form that meets our needs. (2) You must send this contract to us to be endorsed. (3) We must have your request and the contract at our Home Office while the Benefit is in force and before the end of its term period.

     The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date; and (2) this benefit ended just before that contract date.

CONTRACT DATE

     The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be after the end of the term period for the benefit. And it may not be more than 31 days before we have your request at our Home Office.

CONTRACT SPECIFICATIONS

     The new contract will be in the same rating class as this contract. We will set the issue age and the premiums for the new contract in accord with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex.  But it cannot be any of these: (1) a single premium contract; or (2) one that insures anyone in addition to the Insured; or (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less-than 80% of any later premium; or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

    Its face amount will be the amount you ask for in your request. But except as we state below, that amount must be an amount we would regularly issue for the plan you choose. And it cannot be less than $10,000 or more than the amount of term insurance for this benefit. The face amount you want might be less than the smallest amount we would regularly issue on the plan you wish. In that case we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to do so.

AL 131B

     If: (1) the new contract is either on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan; (2) this contract has a benefit for waiving or paying premiums in the event of disability; and (3) we would include that kind of benefit in other contracts like the new contract, we will put the benefit in the new contract. The benefit, if any, in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts we would regularly issue on the same plan and for the same rating class, amount, issue age and sex.

     We will not deny a benefit for waiving or paying premiums that we would have allowed under this contract, and that we would otherwise allow under the new contract, just because disability started before the contract date of the new contract. But any premium to be waived or paid for that disability under the new contract must be at the frequency that was in effect for this contract when the disability started.

     We will not waive or pay any premium under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if we have waived or paid premiums under this contract.

CHANGES

     You may be able to have this benefit changed to a new contract of life insurance (either with us or with a subsidiary of ours) other than in accord with the requirements for exchange that we state above. Or you may be able to exchange this benefit for an increase in the amount of insurance under this contract. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

MISCELLANEOUS PROVISIONS

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

     Benefit premiums and monthly charges stop on the contract anniversary at the end of the term period for this benefit.

TERMINATION

     This benefit will end on the earliest of:

     1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract;

     2. the date the contract is surrendered under its Cash Value Option, if it has one;

     3. the end of the last day before the contract date of any other contract (a) for which the benefit is exchanged, or (b) to which the benefit is changed;

and

     4. the date the contract ends for any other reason.

     Further, if you ask us in writing, and we agree, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

This Supplementary Benefit rider attached to this contract on the Contract Date.

     The Prudential Insurance Company of America,

     By /s/ DOROTHY K. LIGHT

            Secretary

AL 131B

EXHIBIT 26(d)(vi)

RIDER FOR TERM INSURANCE BENEFIT

ON LIFE OF INSURED DECREASING AMOUNT

This benefit is a part of this contract only if it is listed on a contract data page.

BENEFIT

We will pay an amount under this benefit if we receive due proof that the Insured died: (1) in the term period for the benefit; and (2) while this contract is in force and not in default past the last day of the grace period.  But our payment is subject to all the provisions of this rider and of the rest of this contract.

We show the Initial Amount of this benefit on a contract data page. We also show the term period for the benefit there. The term period starts on the contract date. The anniversary at the end of the term period is part of that period.

AMOUNTS PAYABLE

The amount we will pay depends on when death occurs. In the Table of Amounts of Insurance on a contract data page we show the amount we will pay if death occurs in a given contract year.

BENEFIT PREMIUMS AND CHARGES

We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.  Benefit premiums and monthly charges stop on the anniversary at the end of the term period.

The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the contract fund.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

You may convert this benefit to a new contract of life insurance on the Insured's life. You will not have to prove that the Insured is insurable.

CONDITIONS

The amount of insurance that would have been payable under this benefit if the Insured had died just before the contract date of the new contract (see the Table of Amounts for this benefit on a contract data page) must be large enough to meet the minimum for a new contract, as we describe under Contract Specifications. You must ask for the conversion in a form that meets our needs, while this contract is in force and not in default past the last day of the grace period, and at least five years before the end of the term period for this benefit. We may require you to send us the contract.

The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the new contract took effect on its contract date and that this benefit ended just before that date.

PREMIUM CREDIT

If we receive your request for conversion before the fifth anniversary of this contract, we will allow a premium credit. Upon conversion to a new contract with scheduled premiums, we will allow a credit, as described below, on each premium that is due or scheduled for payment during the first year of the new contract.  Upon conversion to a new contract without scheduled premiums, we will allow a credit as of the contract date provided you pay any required minimum initial premium for the new contract.

If this benefit has been in force for at least one year on the contract date of the new contract, we will allow the full credit described below. If this benefit has been in force for less than one year as of that date, the credit will be reduced on a pro-rata basis taking into consideration the portion of a year for which this benefit has then been in force.

AL 130 B--96

The full credit is equal to the premiums for the term insurance being converted that were due, on the premium mode in effect at the time of conversion, during the twelve months preceding the date of the new contract. Extra premiums or charges for extra risks or extra benefits other than a waiver benefit are not considered in determining this credit.

If the new contract has scheduled premiums, we will reduce each premium due or scheduled for payment in the first year of the new contract to consider either the full or reduced credit, as appropriate. If more than one premium is due or scheduled for payment, we will apportion any credit between them. If the new contract does not have scheduled premiums, we will pay either the full or reduced credit, as appropriate, into the new contract as of the contract date provided you pay any required minimum initial premium for the new contract.

CONTRACT DATE

If this contract is not in default, you may choose any contract date for the new contract that is not more than 31 days after nor more than 31 days before the date we receive your request, and not less than five years before the end of the term period for this benefit. If this contract is in default but not past the last day of the grace period, the contract date for the new contract will be the date on which this contract went into default.

CONTRACT SPECIFICATIONS

The new contract will be in the same rating class as this contract. We will set the issue age, premiums and charges for the new contract in accordance with our regular rules in use on its contract date.

Except as we state in the next sentence, the new contract may be any life or endowment policy we regularly issue on its contract date for the same rating class, amount, issue age and sex. It may not be: a single-premium contract; one that insures anyone in addition to the Insured; one that includes or provides for term insurance, other than extended insurance; one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or one with any benefit other than the basic insurance benefit and the waiver benefit we refer to below. A waiver benefit may either waive or pay premiums in the event of the Insured's total disability.

The basic amount of the new contract may be any amount you ask for as long as it is at least $10,000 and not more than 80% of the amount we would have paid under this benefit if the Insured had died just before the contract date of the new contract. (Since $10,000 is 80% of $12,500, the amount we would have paid must be at least $12,500 for conversion to be possible.) If the amount you want is smaller than the smallest amount we would regularly issue on the plan you want, we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to.

If this contract has a benefit for waiving premiums in the event of the Insuredos total disability, we will include a waiver benefit in the new contract if its premium period runs to at least the Insured's attained age 85 and if we would include a waiver benefit in other contracts like the new one.

We will not deny a waiver benefit that we would have allowed under this contract, and that we would otherwise allow under the new contract, just because total disability started before the contract date of the new contract. But any premium to be waived or paid for disability under the new contract must be on the monthly mode, unless we agree otherwise. We will not waive or pay any premium under the new contract unless it has a waiver benefit, even if we have waived premiums under this contract due to the Insuredos total disability.

Any waiver benefit in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In any of these paragraphs, when we refer to other contracts, we mean contracts we would regularly issue on the same plan as the new contract and for the same rating class, amount, issue age and sex.

CHANGES

You may be able to have this benefit changed to a new contract of life insurance other than in accordance with the requirements for conversion that we state above. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

AL 130 B--96

TERMINATION OF BENEFIT

This benefit will end on the earliest of:

1.   the end of its term period;

2.   the end of the last day of the grace if the contract is in default; it will

     not continue if either extended insurance or reduced paid-up insurance

     takes effect;

3.   the end of the last day before the contract date of any other contract to

     which the benefit is converted or changed;

4.   the date the contract is surrendered under its Cash Value Option; and

5.   the date the contract ends for any other reason.

Further, if you ask us in a form that meets our needs, we will cancel the benefit as of the first monthly date on or after the date we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

THIS SUPPLEMENTARY BENEFIT RIDER ATTACHED TO THIS CONTRACT ON THE CONTRACT DATE.

The Prudential Insurance Company of America.

                                               By /s/ SPECIMEN

                                                  --------------------------

                                                         Secretary

 AL 130 B--96

EXHIBIT 26(d)(vii)

RIDER FOR INTERIM TERM INSURANCE BENEFIT

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay the beneficiary an amount under this benefit if we receive due proof that the Insured died on or after the date of the benefit but before the contract date. But our payment is subject to the provisions of the benefit and of the rest of this contract. The amount of the benefit is equal to the amount of insurance provided by the contract on the contract date. We show the contract date and the date of the benefit on the contract data pages.

CHANGES IN CONTRACT PROVISIONS

     This contract has a Suicide Exclusion and an Incontestability provision. In each of them, we refer to a period of time that extends from the issue date. But for each of them we will count the time from the date of this benefit, not from the issue date.

     This contract might have a benefit for the payment of scheduled premiums by us in the event of disability; it might have one that provides accidental death coverage. If so, we might refer in either or both of those benefits to the contract date. But we will use the date of this benefit, not the contract date.

     The first scheduled contract premium is due on the contract date. We will grant 31 days of grace for paying it. This will be so even though we state otherwise under Grace Period.

     Except for the changes we describe above, all the provisions of this contract will be in effect on and after the contract date if the Insured is then living, as if the contract did not have this benefit. The benefit will not make any dividend or any contract value that may be provided by the contract available any sooner.

BENEFIT PREMIUM

     We show the premium for this benefit on the contract data pages. This premium is to be paid on or before the date of the benefit. It is not the scheduled premium for the contract. Neither the benefit nor the premium for it provides any insurance, or changes premiums payable, on or after the contract date.

PREMIUM ADJUSTMENT

     The Insured might die before the contract date. If so, we will return that part of the premium for this benefit that is more than was needed to pay for the benefit through the date of death. We will add the amount we return to the amount we would otherwise pay under the benefit.

This Supplementary Benefit rider attached to this contract on the Contract Date.

     The Prudential Insurance Company of America,

     By /s/ ISABELLE L. KIRCHNER

        -------------------------------

            Secretary

AL 160B

EXHIBIT 26(d)(viii)

RIDER FOR OPTION TO PURCHASE ADDITIONAL INSURANCE ON LIFE OF INSURED

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     You have the right under this benefit to buy more insurance on the Insured's life. You may do this for certain normal option dates and advance option dates, as we explain below. You will not have to prove that the Insured is insurable. We will provide term insurance for a period before any advance option dates as we state under Term Insurance below. But these promises are subiect to all the provisions of the benefit and of the rest of this contract.

NORMAL OPTION DATES

     These are the anniversaries of this contract on which the Insured's attained age is 25, 28, 31, 34, 37, 40, 43, 46, 49 and 52.

     You may buy a new contract for each normal option date if these four statements apply: (1) You have not used your right for that date by buying a new contract on an advance option date (we explain this below). (2) The Insured signs an application for the new contract, and you sign it, too, if you are not the Insured. (3) We receive the application and the first premium, less the premium credit that we describe below, at our Home Office not more than 31 days after the normal option date. (4) On the normal option date, or, if later, the date we receive the application, the Insured is living and this contract is in force and not in default past its days of grace. The new contract will take effect on the later of those two dates. That date will be its contract date.

     Your right to buy the new contract will end on the 31st day after the normal option date. But this will not change your right to buy a new contract for any later normal or advance option date.

ADVANCE OPTION DATES

     Except as we state in the next paragraph, an advance option date is the date three months after any of these events:

     1. The Insured's marriage.

     2. While the Insured is living, the birth of a live child of the Insured for whom the Insured accepts legal responsibility.

     3. The Insured's legal adoption of a child.

     But the event must take place: (1) on or after the later of the date of this contract and the date of Part 1 of its application; and (2) not later than the date that is one month before the contract anniversary on which the Insured's attained age is 52. If the event takes place less than three months before that anniversary, the related advance option date will be that anniversary and not the date three months after the event.

     You may buy a new contract for each advance option date if these four statements apply: (1) The Insured signs an application for the new contract, and you sign it, too, if you are not the Insured. (2) We receive the application and the first premium, less the premium credit that we describe below, at our Home Office not later than the advance option date. (3) The Insured is living on the advance option date. (4) This contract is in force on that date and not in default past its days of grace. The new contract will take effect on the advance option date. That will be its contract date.

     Your right to buy the new contract will end on the advance option date, But this will not change your right to buy a new contract for any later normal or advance option date.

     Each time you buy a new contract for an advance option date, you will have used your right to buy a new contract for the next normal option date, if any, for which you could otherwise have bought one. But even if you have used your right to buy for all normal option dates, advance option dates may still occur as we state above. If we let you combine two or more new contracts you can buy under this benefit into one, you will use your right to buy new contracts for the same number of future normal option dates as if the new contracts had not been combined.

AL 140B

TERM INSURANCE

     For each event that gives rise to an advance option date, we will automatically provide term insurance on the Insured's life, as long as this contract is in force. Its amount will be the option amount. We will pay that amount if the Insured dies on or after the date of the event but before: (1) the advance option date; or (2) the date this benefit ends, if sooner. We will include it in the proceeds of this contract. But if this contract limits or excludes war or aviation risks, the term insurance will limit or exclude them in the same way.

CONTRACT SPECIFICATIONS

     The new contract you buy for a normal option date or advance option date will be in the same rating class as this contract.

     If this contract limits or excludes war or aviation risks, we have the right to limit or exclude them in the new contract. too. If we do so, the provision in the new contract will be the same one that we put in other contracts like the new one on its contract date. We will set the issue age and the premiums for the new contract in accord with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex.  But it cannot be any of these: (1) a single premium contract; or (2) one that insures anyone in addition to the Insured; or (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

     Its face amount will be the amount you ask for in your request. But except as we state below, that amount must be an amount we would regularly issue for the plan you choose. And it cannot be less than $10,000 or more than the option amount for this benefit which we show on the contract data pages. The face amount you want might be less than the smallest amount we would regularly issue on the plan you wish. In that case we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to do so.

     If: (1) the new contract is either on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan; (2) this contract has a benefit for waiving or paving premiums in the event of disability; and (3) we would include that kind of benefit in other contracts like the new contract, we will put that kind of benefit in the new contract, as we state in General below.

     We will not deny a benefit for waiving or paying premiums that we would have allowed under this contract, and that we would otherwise allow under the new contract, just because disability started before the contract date of the new contract. But any premium to be waived or paid for that disability under the new contract must be at the frequency that was in effect for this contract when the disability started.

     We will not waive or pay any premium under the new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if we have waived or paid premiums under this contract.

     If this contract has an accidental death benefit, or an accidental death and dismemberment benefit, and we would regularly issue contracts like the new contract with that benefit, we will put that kind of benefit in the new contract, as we state in General below. But: (1) you must ask for it when you apply for the new contract; and (2) the amount of any accidental death benefit in the new contract will not be more than the face amount of the new contract.

     General: Any benefit for waiving or paying premiums in event of disability and any accidental death benefit or accidental death and dismemberment benefit in the new contract will be the same one that we put in other contracts like it on its contract date. In any of these paragraphs, when we use the phrases other contracts like it and other contracts like the new contract, we mean contracts we would regularly issue on the same plan and for the same rating class, amount, issue age and sex.

AL 140B

CHANGES

     On a normal or advance option date you may be able to buv a new contract of life insurance (either with us or with a subsidiary of ours) other than in accord with the requirements that we state above. Or you may be able to use the option to increase the amount of insurance under this contract. But either may be done only if we consent, and will be subject to conditions and charges that are then determined.

PREMIUM CREDIT

     We will allow a premium credit on the first premium for the new contract.  The credit will be at least $1 for each full Sl,000 of face amount of the new contract. If: (l) the new contract calls for premiums to be paid more often than annually; and (2) the credit would be more than that first premium, you may choose to have premiums paid less often to get the full credit.

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund. The premiums for this benefit stop on the contract anniversary on which the Insured's attained age is 52.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages. The charges for this benefit stop on the contract anniversary on which the Insured's

attained age is 52.

TERMINATION

     This benefit will end on the earliest of:

     1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract;

     2. the 31st day after the contract anniversary on which the Insured's attained age is 52;

     3. the date the contract is surrendered under its Cash Value Option, if it has one; and

     4. the date the contract ends for any other reason.

     Further, if you ask us in writing, and we agree, we will cancel the benefit as of the first monthly date on or after which we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

This Supplementary Benefit rider attached to this contract on the Contract Date.

     The Prudential Insurance Company of America.

     By /s/ [SPECIMEN]

            Secretary

EXHIBIT 26(d)(ix)

RIDER FOR TERM INSURANCE BENEFIT ON LIFE OF

INSURED SPOUSE--DECREASING AMOUNT

This benefit is a part of this contract only if it is listed on a contract data page.

BENEFIT

We will pay an amount under this benefit if we receive due proof that the insured spouse died: (1) in the term period for the benefit; and (2) while this contract is in force and not in default past the last day of the grace period.  But our payment is subject to all the provisions of this rider and of the rest of this contract. The phrase insured spouse means the Insured's spouse named in the application for this contract.

We show the Initial Amount of this benefit on a contract data page. We also show the term period for the benefit there. The term period starts on the contract date. The anniversary at the end of the term period is part of that period.

AMOUNTS PAYABLE

The amount we will pay depends on when the death of the insured spouse occurs.  In the Table of Amounts of Insurance on a contract data page we show the amount we will pay if death occurs in a given contract year.

BENEFIT PREMIUMS AND CHARGES

We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund. The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the contract fund.

Benefit premiums and monthly charges stop on the earliest of: (1) the death of the Insured, (2) the death of the insured spouse, and (3) the anniversary at the end of the term period.

PAID-UP INSURANCE

PAID-UP INSURANCE ON LIFE OF INSURED SPOUSE

If the Insured dies in the term period for this benefit while this contract is in force and not in default past the last day of the grace period and while the insured spouse is living, the insurance on the life of the insured spouse under the benefit will become paid-up term insurance. While the paid-up insurance is in effect, the contract will remain in force until the end of the term period for this benefit. The paid-up insurance will have cash values but no loan value.

If this benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance plus any dividend credits. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. We base this net cash value on the insured spouse's age and sex. The insured spouse's age at any time will be his or her age last birthday on the contract date plus the length of time since that date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year.

We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year.

AL 181 B--96

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

While the Insured is living, you may convert this benefit to a new contract of life insurance on the life of the insured spouse. You will not have to prove that the insured spouse is insurable.

CONDITIONS

You must ask for the conversion in a form that meets our needs, while this contract is in force and not in default past the last day of the grace period, and at least five years before the end of the term period for this benefit.

The new contract will not take effect unless the premium for it is paid while the insured spouse is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the new contract took effect on its contract date and that this benefit ended just before that date.

PREMIUM CREDIT

If we receive your request for conversion before the fifth anniversary of this contract, we will allow a premium credit. Upon conversion to a new contract with scheduled premiums, we will allow a credit, as described below, on each premium that is due or scheduled for payment during the first year of the new contract.  Upon conversion to a new contract without scheduled premiums, we will allow a credit as of the contract date provided you pay any required minimum initial premium for the new contract.

If this benefit has been in force for at least one year on the contract date of the new contract, we will allow the full credit described below. If this benefit has been in force for less than one year as of that date, the credit will be reduced on a pro-rata basis taking into consideration the portion of a year for which this benefit has then been in force.

The full credit is equal to the premiums for the term insurance being converted that were due, on the premium mode in effect at the time of conversion, during the twelve months preceding the date of the new contract. Extra premiums or charges for extra risks or extra benefits other than a waiver benefit are not considered in determining this credit.

If the new contract has scheduled premiums, we will reduce each premium due or scheduled for payment in the first year of the new contract to consider either the full or reduced credit, as appropriate. If more than one premium is due or scheduled for payment, we will apportion any credit between them. If the new contract does not have scheduled premiums, we will pay either the full or reduced credit, as appropriate, into the new contract as of the contract date provided you pay any required minimum initial premium for the new contract.

CONTRACT DATE

If this contract is not in default, you may choose any contract date for the new contract that is not more than 31 days after nor more than 31 days before the date we receive your request, and not less than five years before the end of the term period for this benefit. If this contract is in default but not past the last day of the grace period, the contract date for the new contract will be the date on which this contract went into default.

CONTRACT SPECIFICATIONS

The new contract will be in the rating class we show for this benefit on a contract data page. We will set the issue age, premiums and charges for the new contract in accordance with our regular rules in use on its contract date.

Except as we state in the next sentence, the new contract may be any life or endowment policy we regularly issue on its contract date for the same rating class, amount, issue age and sex. It may not be: a single-premium contract; one that insures anyone in addition to the Insured; one that includes or provides for term insurance, other than extended insurance; one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or one with any benefit other than the basic insurance benefit and the waiver benefit we refer to below. A waiver benefit may either waive or pay premiums in the event of the Insured's total disability.

The basic amount of the new contract may be any amount you ask for as long as it is at least $10,000 and not more than 80% of the amount we would have paid under this benefit if the Insured had died just before the contract date of the new contract. (Since $10,000 is 80% of $12,500, the amount we would have paid must be at least $12,500 for conversion to be possible.) If the amount you want is smaller than the smallest amount we would regularly issue on the plan you want, we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to.

AL 181 B--96

Even though this contract does not have a waiver benefit on the life of an insured spouse, we will include a waiver benefit in the new contract if its premium period runs to at least the Insured's attained age 85 and if we would include a waiver benefit in other contracts like the new one.

We will not waive or pay any premium under the new contract unless it has a waiver benefit, even if we have waived premiums under this contract due to the Insuredos total disability. And we will not waive or pay any premium under the new contract unless the disability started on or after its contract date.

Any waiver benefit in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In any of these paragraphs, when we refer to other contracts, we mean contracts we would regularly issue on the same plan as the new contract and for the same rating class, amount, issue age and sex.

MISCELLANEOUS

CHANGES

You may be able to have this benefit changed to a new contract of life insurance other than in accordance with the requirements for conversion that we state above. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

OWNERSHIP

While any insurance under this benefit is in force after the Insured's death, the insured spouse will be the owner of the contract and will be entitled to any contract benefit and value and the exercise of any right and privilege granted by the contract or by us. But any insurance payable upon the Insured's death will be payable to the beneficiary for that insurance.

BENEFICIARY

The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured.

On the contract date, unless we issue the contract with an endorsement that states otherwise, the beneficiary for insurance payable upon the death of the insured spouse will be the Insured if living, otherwise the estate of the insured spouse.

You may change the beneficiary for insurance payable upon the death of the insured spouse. The request must be in a form that meets our needs. It will take effect only when we file it; this will be after you send us the contract, if we require it to issue an endorsement. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the insured spouse is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee we know of.

When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated.

MISSTATEMENT OF AGE OR SEX

If the insured spouse's stated age or sex or both are not correct, we will change each benefit and any amount payable to what the premium would have bought for the correct age and sex.

The Schedule of Premiums may show that premiums change or stop on a certain date. We may have used that date because the insured spouse would attain a certain age on that date. If we find that the issue age for the insured spouse was wrong, we will correct that date.

SUICIDE EXCLUSION

If the insured spouse, whether sane or insane, dies by suicide within the period which we state in the Suicide Exclusion under Death Benefits provision, we will not pay the amount we describe under Benefit above. Instead, we will pay no more than the sum of the premiums paid for this benefit. We will make that payment in one sum.

REINSTATEMENT

If this contract is reinstated, it will not include the insurance that we provide under this benefit on the life of the insured spouse unless you prove to us that the insured spouse is insurable for the benefit.

INCONTESTABILITY

Except for non-payment of premium, we will not contest this benefit after it has been in force during the insured spouse's lifetime for two years from the issue

date.

AL 181 B--96

                             TERMINATION OF BENEFIT

This benefit will end on the earliest of:

1.   the end of the last day of the grace period if the contract is in default;

     it will not continue if either extended insurance or reduced paid-up

     insurance takes effect;

2.   the end of the last day before the contract date of any other contract to

     which the benefit is converted or changed;

3.   the date the contract is surrendered under its Cash Value Option, or the

     paid-up insurance, if any, under the benefit is surrendered;

4.   the end of its term period; and

5.   the date the contract ends for any other reason.

Further, if you ask us in a form that meets our needs, we will cancel the benefit as of the first monthly date on or after the date we receive your request. Contract premiums and monthly charges due then and later will be

reduced accordingly.

THIS SUPPLEMENTARY BENEFIT RIDER ATTACHED TO THIS CONTRACT ON THE CONTRACT DATE.

The Prudential Insurance Company of America

                                               By /s/ SPECIMEN

                                                  --------------------------

                                                         Secretary

AL 181 B--96

EXHIBIT 26(d)(x)

RIDER FOR LEVEL TERM INSURANCE BENEFIT ON DEPENDENT CHILDREN

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay an amount under this benefit if we receive due proof that a dependent child died: (1) before the term insurance provided by the benefit on his or her life ends; and (2) while this contract is in force and not in default past the last day of the grace period. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

     The phrase dependent child means the insured's child, stepchild or legally adopted child who: (1) has reached the 15th day of life; and (2) has not reached the first contract anniversary after his or her 25th birthday; and either (3) is named in the application for this contract and on the date of the application has not reached his or her 18th birthday; or (4) is acquired by the Insured after the date of the application but before the child's 18th birthday.

     We show the amount of term insurance under this benefit on the contract data pages. The insurance on each dependent child's life will end on the earlier of: (1) the end of the day before the first contract anniversary after the child's 25th birthday; and (2) the end of the day before the first contract anniversary after the Insured's 65th birthday.

PAID-UP INSURANCE

PAID-UP INSURANCE ON DEPENDENT CHILDREN

     The Insured might die while this contract is in force and not in default past the last day of the grace period. In this case, any term insurance provided by this benefit on a dependent child's life will become paid-up term insurance.  While this paid-up insurance is in effect, the contract will remain in force.  The paid-up insurance will have cash values but no loan value.

     If this benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. To compute this net cash value, we use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year.

     We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them.

CONVERSION OF INSURANCE ON DEPENDENT CHILDREN

RIGHT TO CONVERT

     If the insurance on a dependent child ends as we state in the last paragraph under benefit above, that child may be able to obtain a new contract of life insurance on his or her life. It will not be necessary to prove that the child is insurable.

CONDITIONS

The right to obtain a new contract is subject to all these conditions: (1) The insurance on the child must end while this contract is in force and not in default past the last day of the grace period. (2) The amount of the new contract must meet the minimum as we describe under Contract Specifications. (3) We must have a written application for the new contract at our Home Office no later than the date the insurance on the child ends.

AL 182B

     The new contract will not take effect unless the premium for it is paid while the child is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the insurance under the new contract took effect on its contract date.

CONTRACT DATE

     The date of the new contract will be the day after the date the insurance on the dependent child ends.

CONTRACT SPECIFICATIONS

The new contract will be in the standard rating class. We will set the issue age and the premiums for the new contract in accord with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex. But it cannot be any of these: (1) a single premium contract; or (2) one that insures anyone in addition to the child; or (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

     Its face amount will be the amount asked for in the application. But, except as we state below, that amount must be an amount we would regularly issue for the plan chosen. And it cannot be less than $5,000 or more than five times the amount of insurance on the child's life under this benefit. The face amount asked for might be less than the smallest amount we would regularly issue on the plan requested. In that case we will issue a new contract for as low as $5.000 on the Life Paid Up at Age 85 plan (Life Paid Up at Age 65 plan if the issue age for the new contract is less than 15 years) if we are asked to do so.

     If: (1) the new contract is on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan; or (2) the new contract is on the Life Paid Up at Age 65 plan because the issue age for it is less than 15 years; and (3) we would include in other contracts like the new contract a benefit for waiving or paying premiums in the event of disability of the person insured, here is what we will do. Even though this contract does not have that benefit on the life of that child, we will put it in a new contract on his or her life. The benefit, if any, in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In this paragraph, when we use the phrases other contracts like it and other contracts like the new contract, we mean contracts we would regularly issue on the same plan and for the same rating class, amount, issue age and sex.

     We will not waive or pay any premium under a new contract unless the disability started on or after its contract date. And we will not waive or pay any premium under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if we have waived or paid premiums under this contract.

CHANGES

     If the insurance on a dependent child ends as we state in the last paragraph under benefit above, that child may be able to obtain a new contract of life insurance (either with us or with a subsidiary of ours) other than in accord with the requirements we state in this form. But this kind of change may be made only if we consent, and will be subject to conditions and charges that are then determined.

MISCELLANEOUS PROVISIONS

BENEFICIARY

     The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured.

     Unless we endorse this contract to say otherwise, these two statements will apply: (1) The beneficiary for insurance payable upon the death of a dependent child will be the Insured if living, otherwise the beneficiary for this insurance named in the application. (2) If no such beneficiary is living when insurance under this benefit becomes payable we will make the payment in one sum to the estate of the later to die of the insured and such beneficiary.

AL 182B

     The beneficiary for insurance payable upon the death of a dependent child may be changed. The request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office; this will be after the contract is sent to us to be endorsed, if we ask for it. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the child is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the insured, unless otherwise stated.

REINSTATEMENT

     If this contract is reinstated, it will not include the insurance that we provide under this benefit on the dependent children unless you give us any facts we need to satisfy us that each child who is to be insured on or within 15 days after the date of reinstatement is insurable for the benefit. If you do not give us the facts we need for any child, the benefit may be reinstated if all the other conditions are met to reinstate the contract. But you must send the contract to us to be endorsed to show that the child is not insured under the benefit.

CONTRACT VALUE OPTIONS

     If this contract has a Contract Value Options provision, it will apply only during the Insured's lifetime. Any extended or reduced paid-up insurance that may be described there is on the life of the Insured only.

CONTRACT LOANS

     If this contract has a Loans provision. we will not consider any contract debt when we determine the amount payable, if any, at the death of a dependent child.

INCONTESTABILITY

     Except for non-payment of premium, we will not contest this benefit with respect to the insurance on any dependent child's life after it has been in force during the child's lifetime for two years from the issue date.

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

     Benefit premiums and monthly charges stop on the earlier of the death of the Insured and the first contract anniversary after the Insured's 65th birthday.

TERMINATION

     This benefit will end on the earliest of:

     1. the end of the last day of grace if the contract is in default, it will not continue if a benefit takes effect under any contract value options provision that may be in the contract;

     2. the end of the day before the first contract anniversary after the Insured's 65th birthday;

     3. the date the contract is surrendered under its Cash Value Option, if it has one, or the paid-up insurance, if any, under the benefit is surrendered; and

     4. the date the contract ends for any other reason.

     Further, if you ask us in writing in the premium period, and we agree, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

This Supplementary Benefit rider attached to this contract on the Contract Date

The Prudential Insurance Company of America,

 By  /s/ ISABELLE L. KIRCHNER

     --------------------------

             Secrerary

AL 182B

EXHIBIT 26(d)(xi)

RIDER FOR LEVEL TERM INSURANCE BENEFIT ON DEPENDENT CHILDREN – From Conversions

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay an amount under this benefit if we receive due proof that a dependent child died: (1) before the term insurance provided by the benefit on his or her life ends; and (2) while this contract is in force and not in default past the last day of the grace period. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

     The phrase dependent child means the Insured's child, stepchild or legally adopted child who: (1) has reached the 15th day of life; and (2) has not reached the first contract anniversary after his or her 25th birthday; and either (3) just before the contract date of this contract was insured under the earlier contract from which this contract was exchanged or changed; or (4) is acquired by the Insured on or after the date of this contract but before the child's 18th birthday.

     We show the amount of term insurance under this benefit on the contract data pages. The insurance on each dependent child's life will end on the earlier of: (1) the end of the day before the first contract anniversary after the child's 25th birthday; and (2) the end of the day before the first contract anniversary after the Insured's 65th birthday.

PAID-UP INSURANCE

PAID-UP INSURANCE ON DEPENDENT CHILDREN

     The Insured might die while this contract is in force and not in default past the last day of the grace period. In this case, any term insurance provided by this benefit on a dependent child's life will become paid-up term insurance.  While this paid-up insurance is in effect, the contract will remain in force.  The paid-up insurance will have cash values but no loan value.

     If this benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. To compute this net cash value, we use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year.

     We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them.

CONVERSION OF INSURANCE ON DEPENDENT CHILDREN

RIGHT TO CONVERT

     If the insurance on a dependent child ends as we state in the last paragraph under benefit above, that child may be able to obtain a new contract of life insurance on his or her life. It will not be necessary to prove that the child is insurable.

CONDITIONS

     The right to obtain a new contract is subject to all these conditions: (1) The insurance on the child must end while this contract is in force and not in default past the last day of the grace period. (2) The amount of the new contract must meet the minimum as we describe under Contract Specifications. (3) We must have a written application for the new contract at our Home Office no later than the date the insurance on the child ends.

AL 184B

     The new contract will not take effect unless the premium for it is paid while the child is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the insurance under the new contract took effect on its contract date.

CONTRACT DATE

     The date of the new contract will be the day after the date the insurance on the dependent child ends.

CONTRACT SPECIFICATIONS

     The new contract will be in the standard rating class. We will set the issue age and the premiums for the new contract in accord with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex.  But it cannot be any of these: (1) a single premium contract; or (2) one that insures anyone in addition to the child; or (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

     Its face amount will be the amount asked for in the application. But, except as we state below, that amount must be an amount we would regularly issue for the plan chosen. And it cannot be less than $5,000 or more than five times the amount of insurance on the child's life under this benefit. The face amount asked for might be less than the smallest amount we would regularly issue on the plan requested. In that case we will issue a new contract for as low as $5,000 on the Life Paid Up at Age 85 plan (Life Paid Up at Age 65 plan if the issue age for the new contract is less than 15 years) if we are asked to do so.

     If: (1) the new contract is on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan; or (2) the new contract is on the Life Paid Up at Age 65 plan because the issue age for it is less than 15 years; and (3) we would include in other contracts like the new contract a benefit for waiving or paying premiums in the event of disability of the person insured, here is what we will do. Even though this contract does not have that benefit on the life of that child, we will put it in a new contract on his or her life. The benefit, If any, in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In this paragraph, when we use the phrases other contracts like it and other contracts like the new contract, we mean contracts we would regularly issue on the same plan and for the same rating class, amount, issue age and sex.

     We will not waive or pay any premium under a new contract unless the disability started on or after its contract date. And we will not waive or pay any premium under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if we have waived or paid premiums under this contract.

CHANGES

     If the insurance on a dependent child ends as we state in the last paragraph under benefit above, that child may be able to obtain a new contract of life insurance (either with us or with a subsidiary of ours) other than in accord with the requirements we state in this form. But this kind of change may be made only if we consent, and will be subject to conditions and charges that are then determined.

MISCELLANEOUS PROVISIONS

BENEFICIARY

     The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured.

     Unless we endorse this contract to say otherwise, these two statements will apply: (1) The beneficiary for insurance payable upon the death of a dependent child will be the Insured if living, otherwise the beneficiary for insurance payable upon the death of the Insured. (2) If no such beneficiary is living when insurance under this benefit becomes payable, we will make the payment in one sum to the estate of the later to die of the Insured and such beneficiary.

AL 184B

     The beneficiary for insurance payable upon the death of a dependent child may be changed. The request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office; this will be after the contract is sent to us to be endorsed, if we ask for it. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the child is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated.

REINSTATEMENT

     If this contract Is reinstated, it will not include the insurance that we provide under this benefit on the dependent children unless you give us any facts we need to satisfy us that each child who is to be insured on or within 15 days after the date of reinstatement is insurable for the benefit. If you do not give us the facts we need for any child, the benefit may be reinstated if all the other conditions are met to reinstate the contract. But you must send the contract to us to be endorsed to show that the child is not insured under the benefit.

CONTRACT VALUE OPTIONS

     If this contract has a Contract Value Options provision, it will apply only during the Insured's lifetime. Any extended or reduced paid-up insurance that may be described there is on the life of the Insured only.

CONTRACT LOANS

     If this contract has a Loans provision, we will not consider any contract debt when we determine the amount payable, if any, at the death of a dependent child.

INCONTESTABILITY

     Except for non-payment of premium, we will not contest this benefit with respect to the insurance on any dependent child's life after it has been in force during the child's lifetime for two years from: (1) the date the level term insurance benefit on dependent children began under the earliest contract; or, if later, (2) the date of any rider that added the child for coverage under any such earlier contract. But, in any case, if there was a later reinstatement of any such earlier contract, then the two years will start on the date of the most recent reinstatement.

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit under Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

     Benefit premiums and monthly charges stop on the earlier of the death of the Insured and the first contract anniversary after the Insured's 65th

birthday.

TERMINATION

     This benefit will end on the earliest of:

     1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract;

     2. the end of the day before the first contract anniversary after the Insured's 65th birthday;

     3. the date the contract is surrendered under its Cash Value Option, if it has one, or the paid-up insurance, if any, under the benefit is surrendered; and

     4. the date the contract ends for any other reason.

     Further, if you ask us in writing in the premium period, and we agree, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

This Supplementary Benefit rider attached to this contract on the Contract Date

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

          Secretary

AL 184B

EXHIBIT 26(d)(xii)

RIDER FOR LEVEL TERM INSURANCE BENEFIT ON DEPENDENT CHILDREN

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay an amount under this benefit if we receive due proof that a dependent child died: (1) before the term insurance provided by the benefit on his or her life ends; and (2) while this contract is in force and not in default past the last day of the grace period. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

     The phrase dependent child means the Insured's child, stepchild or legally adopted child who: (1) has reached the 15th day of life; and (2) has not reached the first contract anniversary after his or her 25th birthday; and either (3) is named in the application for change which is attached to and made a part of this contract, and on the date of the request has not reached his or her 18th birthday; or (4) is acquired by the Insured after the date of the request but before the child's 18th birthday.

     We show the amount of term insurance under this benefit on the contract data pages. The insurance on each dependent child's life will end on the earlier of: (1) the end of the day before the first contract anniversary after the child's 25th birthday; and (2) the end of the day before the first contract anniversary after the Insured's 65th birthday.

PAID-UP INSURANCE

PAID-UP INSURANCE ON DEPENDENT CHILDREN

     The Insured might die while this contract is in force and not in default past the last day of the grace period. In this case, any term insurance provided by this benefit on a dependent child's life will become paid-up term insurance.  While this paid-up insurance is in effect, the contract will remain in force.  The paid-up insurance will have cash values but no loan value.

     If this benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. To compute this net cash value, we use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year.

     We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them.

CONVERSION OF INSURANCE ON DEPENDENT CHILDREN

RIGHT TO CONVERT

     If the insurance on a dependent child ends as we state in the last paragraph under benefit above, that child may be able to obtain a new contract of life insurance on his or her life. It will not be necessary to prove that the child is insurable.

CONDITIONS

     The right to obtain a new contract is subject to all these conditions: (1) The insurance on the child must end while this contract is in force and not in default past the last day of the grace period. (2) The amount of the new contract must meet the minimum as we describe under Contract Specifications. (3) We must have a written application for the new contract at our Home Office no later than the date the insurance on the child ends.

AL 185B

     The new contract will not take effect unless the premium for it is paid while the child is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the insurance under the new contract took effect on its contract date.

CONTRACT DATE

     The date of the new contract will be the day after the date the insurance on the dependent child ends.

CONTRACT SPECIFICATIONS

     The new contract will be in the standard rating class. We will set the issue age and the premiums for the new contract in accord with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex.  But it cannot be any of these: (1) a single premium contract; or (2) one that insures anyone in addition to the child; or (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

     Its face amount will be the amount asked for in the application. But, except as we state below, that amount must be an amount we would regularly issue for the plan chosen. And it cannot be less than $5,000 or more than five times the amount of insurance on the child's life under this benefit. The face amount asked for might be less than the smallest amount we would regularly issue on the plan requested. In that case we will issue a new contract for as low as $5,000 on the Life Paid Up at Age 85 plan (Life Paid Up at Age 65 plan if the issue age for the new contract is less than 15 years) if we are asked to do so.

     If (1) the new contract is on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan; or (2) the new contract is on the Life Paid Up at Age 65 plan because the issue age for it is less than 15 years; and (3) we would include in other contracts like the new contract a benefit for waiving or paying premiums in the event of disability of the person insured, here is what we will do. Even though this contract does not have that benefit on the life of that child, we will put it in a new contract on his or her life. The benefit, if any, in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In this paragraph, when we use the phrases other contracts like it and other contracts like the new contract, we mean contracts we would regularly issue on the same plan and for the same rating class, amount, issue age and sex.

     We will not waive or pay any premium under a new contract unless the disability started on or after its contract date. And we will not waive or pay any premium under a new contract unless it has a benefit for waiving or paying premiums in the event or disability. This will be so even if we have waived or paid premiums under this contract.

CHANGES

     If the insurance on a dependent child ends as we state in the last paragraph under benefit above, that child may be able to obtain a new contract of life insurance (either with us or with a subsidiary of ours) other than in accord with the requirements we state in this form. But this kind of change may be made only if we consent, and will be subject to conditions and charges that are then determined.

MISCELLANEOUS PROVISIONS

BENEFICIARY

     The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured.

     Unless we endorse this contract to say otherwise, the beneficiary for insurance payable upon the death of a dependent child will be the Insured if living, otherwise the estate of the Insured.

AL 185B

     The beneficiary for insurance payable upon the death of a dependent child may be changed. The request must be in writing and in a form that meets our needs, it will take effect only when we file it at our Home Office; this will be after the contract is sent to us to be endorsed, if we ask for it. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the child is not living when we file the request. Any beneficiary's interest is supject to the rights of any assignee of whom we know. When a beneficiary is designated, any relationship shown is to the insured, unless otherwise stated.

REINSTATEMENT

     If this contract is reinstated, it will not include the insurance that we provide under this benefit on the dependent children unless you give us any facts we need to satisfy us that each child who is to be insured on or within

15 days after the date of reinstatement is insurable for the benefit. If you do not give us the facts we need for any child, the benefit may be reinstated if all the other conditions are met to reinstate the contract. But you must send the contract to us to be endorsed to show that the child is not insured under the benefit.

CONTRACT VALUE OPTIONS

     If this contract has a Contract Value Options provision, it will apply only during the Insured's lifetime. Any extended or reduced paid-up insurance that may be described there is on the life of the Insured only.

CONTRACT LOANS

     If this contract has a Loans provision, we will not consider any contract debt when we determine the amount payable, if any, at the death of a dependent child.

INCONTESTABILITY

     Except for non-payment of premium, we will not contest this benefit with respect to the insurance on any dependent child's life after it has been in force during the child's lifetime for two years from the issue date.

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

     Benefit premiums and monthly charges stop on the earlier of the death of the Insured and the first contract anniversary after the Insured's 65th

birthday.

TERMINATION

     This benefit will end on the earliest of

          1. the end of the last day of grace if the contract is in default; it      will not continue if a benefit takes effect under any contract value options provision that may be in the contract:

          2. the end of the day before the first contract anniversary after the      Insured's 65th birthday:

          3. the date the contract is surrendered under its Cash Value Option,      if it has one, or the paid-up insurance, if any, under the benefit is surrendered; and

          4. the date the contract ends for any other reason.

     Further if you ask us in writing in the premium period, and we agree, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

This Supplementary Benefit rider attached to this contract on the Contract Date.

     The Prudential Insurance Company of America.

By /s/ DOROTHY K. LIGHT

         Secretary

AL 185B

EXHIBIT 26(d)(xiii)

ENDORSEMENTS

(Only we can endorse this contract.)

     This endorsement is attached to and made a part of this contract on the contract date:

     In this contract, we use the phrase the insured spouse. When we do, we mean the Insured's spouse who is named for coverage in the request for change, even though we state otherwise in the contract. The request for change resulted in our issuing the contract; it is attached to and made a part of the contract.

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

       Secretary

ORD 86308--88

EXHIBIT 26(d)(xiv)

[PRUDENTIAL LOGO]

Insured                         Rider for Policy No.

     This contract was reinstated on the date of this rider. But we did not have the facts we needed to satisfy us that the child, ___________________________, whose date of birth is ____________________ was insurable. Therefore, that child will not be insured under this contract on or after the date of this rider. This will be so even though the contract or an application related to it may refer to the child. This will still be so if you apply to reinstate the contract again in the future and you then refer to the child.

Rider attached to and made a part of this contract

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

Secretary

Effective Date              Attest

ORD 86310--88

EXHIBIT 26(d)(xv)

[PRUDENTIAL LOGO]

Insured                                                                           Rider for Policy No.

MODIFICATION OF INSURED'S WAIVER OF PREMIUM BENEFIT PROVISION

     There is an impairment of the Insured's eyesight. If he or she becomes disabled as a result of the loss of eyesight, here is what will apply for that disability. We will not allow benefits under any benefit for waiving premiums in the event of disability in (1) this contract, or (2) any other contract on the Insured's life to which you change or for which you exchange this contract or any of its benefits.

Rider attached to and made a part of this contract on the Contract Date

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

       Secretary

ORD 86312--88

EXHIBIT 26(d)(xvi)

[PRUDENTIAL LOGO]

Insured                                                                                     Rider for Policy No.

TERMINATION OF BENEFIT

     We agree that the benefit _________________________, will end as of _______________________. Then all references in this contract to that benefit will no longer apply. The monthly charges for that benefit will not be deductible on or after that date.

Rider attached to and made a part of this contract

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

Secretary

ORD 86313--88

Date                           Attest

EXHIBIT 26(d)(xvii)

[PRUDENTIAL LOGO]

Insured                                                                                     Rider for Policy No.

- -------------------------------------------------------------------------------

VARIABLE REDUCED PAID-UP INSURANCE

     This contract is no longer in force on a premium paying basis. It is being kept in force as variable reduced paid-up insurance on the Insured's life, as we state under Contract Value Options in the contract.

     The new amount of insurance and its effective date are shown in the attached Table of Values. Unless otherwise stated in the table, any contract debt was deducted when we computed the net cash value that was used to provide the reduced paid-up insurance.

     The cash value of the variable reduced paid-up insurance will continue to vary according to the investment results in the separate account. There is no guaranteed minimum cash value under this option.

     The death benefit under this option may change from day to day, but it will never be less than the amount determined as of the day of default. The death benefit will increase if investment results are in excess of the assumed rate or mortality charges lower than the maximum rate. The death benefit will decrease if investment results are less than the assumed rate, but it will not decrease below the amount determined on the day of default.

     As of the effective date shown in the table each of these items no longer applies: (1) the Tabular Contract Fund Values and Tabular Cash Values shown on page 4 in the contract; (2) any supplementary benefits or other extra benefits that were made a part of the contract by rider or endorsement; and (3) any provisions of the contract that do not apply to the reduced paid-up insurance.

     If this contract is reinstated, the contract fund that applies upon reinstatement is as we state under Premium Payment and Reinstatement. The cash value and net cash value will be as we state under Contract Value Options.

     The attached table shows values at the ends of contract years. If we need to compute values at some time during a contract year, we will count the time since the start of the year. We will let you know the values for other durations if you ask for them.

Rider attached to and made a part of this contract

The Prudential Insurance Company of America

By  /s/  SPECIMEN

----------------------------

Secretary

Date                            Attest

ORD 86329--88

EXHIBIT 26(d)(xviii)

[PRUDENTIAL LOGO]

Insured                                                                Rider for Policy No.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

AVIATION RISK EXCLUSION

CONDITIONS OF EXCLUSION

     We will pay the limited payment we describe below, and not what we would otherwise pay, if: (1) the Insured dies as a result of travel by, or descent from, any aircraft; and (2) the Insured had any duties or acted in any capacity other than as a passenger at any time during the flight.

     But this exclusion will not apply if all these statements are true of the aircraft: (1) It has fixed wings and a permitted gross takeoff weight of at least 75,000 pounds. (2) It is operated by an air carrier that is certificated under the laws of the United States or Canada to carry passengers to or from places in those countries. (3) It is not being operated for any armed forces for training or other purposes.

     As used here, the word aircraft includes rocket craft or any other vehicle for flight in or beyond the earth's atmosphere.

LIMITED PAYMENT

     The limited payment will be: (1) the sum of the premiums that were paid for this contract minus any expense and insurance charges made for insurance coverage on persons other than the Insured, minus (2) any contract debt, minus (3) any withdrawals made under the contract. But if the reserve for the contract, when computed as we state under Reserves, is greater than the amount we describe here, the limited payment will be equal to the reserve. Also, the limited payment will never be more than we would have paid if this exclusion were not in the contract.

     The limited payment will be payable to the beneficiary for insurance otherwise payable upon the Insured's death.

REDUCED PAID-UP, EXTENDED AND OTHER INSURANCE ON THE INSURED'S LIFE

     This exclusion also applies to any reduced paid-up or extended insurance that might be in force under the Contract Value Options, if any. We will put the exclusion in any contract on the Insured's life to which you change, or for which you exchange, this contract or any of its benefits.

PAID-UP INSURANCE ON OTHER PERSONS

     This contract might include insurance on the life of someone other than the Insured. And it might have a provision that makes that insurance paid-up if the Insured dies. This exclusion will not affect any such provision.

EFFECT OF INCONTESTABILITY

     In any case where this exclusion applies, the Incontestability provision of this contract will not be deemed to make us pay more than as we state under

Limited Payment.

RESERVES

     We might have to compute a reserve to find the limited payment. If so, the reserve will be equal to the contract value on the date of the Insured's death less any contract debt adjusted for unearned loan interest.

Rider attached to and made a part of this contract

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

Secretary

Effective Date              Attest

ORD 86325--88

EXHIBIT 26(d)(xix)

[PRUDENTIAL LOGO]

Insured                                           Rider for Policy No.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

MILITARY AVIATION RISK EXCLUSION

CONDITIONS OF EXCLUSION

     We will pay the limited payment we describe below, and not what we would otherwise pay, if: (1) the Insured dies as a result of travel by, or descent from, any aircraft operated by or for any armed forces; and (2) the Insured had any duties or acted in any capacity other than as a passenger at any time during the flight. As used here, the word aircraft includes rocket craft or any other vehicle for flight in or beyond the earth's atmosphere.

LIMITED PAYMENT

     The limited payment will be: (1) the sum of the premiums that were paid for this contract minus any expense and insurance charges made for insurance coverage on persons other than the Insured, minus (2) any contract debt, minus (3) any withdrawals made under the contract. But if the reserve for the contract, when computed as we state under Reserves, is greater than the amount we describe here, the limited payment will be equal to the reserve. Also, the limited payment will never be more than we would have paid if this exclusion were not in the contract.

     The limited payment will be payable to the beneficiary for insurance otherwise payable upon the Insured's death.

REDUCED PAID-UP, EXTENDED AND OTHER INSURANCE ON THE INSURED'S LIFE

     This exclusion also applies to any reduced paid-up or extended insurance that might be in force under the Contract Value Options, if any. We will put the exclusion in any contract on the Insured's life to which you change, or for which you exchange, this contract or any of its benefits.

PAID-UP INSURANCE ON OTHER PERSONS

     This contract might include insurance on the life of someone other than the Insured. And it might have a provision that makes that insurance paid-up if the Insured dies. This exclusion will not affect any such provision.

EFFECT OF INCONTESTABILITY

     In any case where this Exclusion applies, the Incontestability provision of this contract will not be deemed to make us pay more than as we state under Limited Payment.

RESERVES

     We might have to compute a reserve to find the limited payment. If so, the reserve will be equal to the contract value on the date of the Insured's death less any contract debt adjusted for unearned loan interest.

Rider attached to and made a part of this contract

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

Secretary

Effective Date              Attest

ORD 86326--88

EXHIBIT 26(d)(xx)

[PRUDENTIAL LOGO]

Insured                                                                                     Rider for Policy No.

- --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

WAR RISK EXCLUSION

CONDITIONS OF EXCLUSION

     We will pay the limited payment we describe below, and not what we would otherwise pay, if the Insured's death results from any one or more of the following causes: (1) war; (2) any act of war; or (3) the special hazards due to service in the armed forces of any country(ies).

     But this exclusion will not apply unless all these conditions exist: (1) The cause of death occurs while the Insured is in the armed forces of any country(ies) at war. (2) The cause of death occurs while the Insured is outside the Home Areas. (3) The death occurs (a) outside the Home Areas, or (b) within six months after the Insured's return to the Home Areas while in such forces or within six months after the end of service in such forces, whichever is earlier.  As used here, the word war means declared or undeclared war and includes resistance to armed aggression. The phrase Home Areas means the fifty states of the United States of America, the District of Columbia, The Commonwealth of Puerto Rico, The Virgin Islands of the United States, or Canada.

LIMITED PAYMENT

     The limited payment will be: (1) the sum of the premiums that were paid for this contract minus any expense and insurance charges made for insurance coverage on persons other than the Insured, minus (2) any contract debt, minus (3) any withdrawals made under the contract. But if the reserve for the contract, when computed as we state under Reserves, is greater than the amount we describe here, the limited payment will be equal to the reserve. Also, the limited payment will never be more than we would have paid if this exclusion were not in the contract.

     The limited payment will be payable to the beneficiary for insurance otherwise payable upon the Insured's death.

REDUCED PAID-UP, EXTENDED AND OTHER INSURANCE ON THE INSURED'S LIFE

     This exclusion also applies to any reduced paid-up or extended insurance that might be in force under the Contract Value Options, if any. We will put the exclusion in any contract on the Insured's life to which you change, or for which you exchange, this contract or any of its benefits.

PAID-UP INSURANCE ON OTHER PERSONS

     This contract might include insurance on the life of someone other than the Insured. And it might have a provision that makes that insurance paid-up if the Insured dies. This exclusion will not affect any such provision.

EFFECT OF INCONTESTABILITY

     In any case where this exclusion applies, the Incontestability provision of this contract will not be deemed to make us pay more than as we state under Limited Payment.

RESERVES

     We might have to compute a reserve to find the limited payment. If so the reserve will be equal to tne contract value on the date of the Insured's death less any contract debt adjusted for unearned loan interest.

Rider attached to and made a part of this contract

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

Secretary

Attest

ORD 86327--88

EXHIBIT 26(d)(xxi)

[PRUDENTIAL LOGO]

Insured                                                                                     Rider for Policy No.

- -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

REDUCED PAID-UP INSURANCE

     This contract is no longer in force on a premium paying basis. It is being kept in force as reduced paid-up insurance on the Insured's life, as we state under Contract Value Options in the contract.

     The new amount of insurance and its effective date are shown in the attached Table of Values. Unless otherwise stated in the table, any contract debt was deducted when we computed the net cash value that was used to provide the reduced paid-up insurance.

     As of the effective date shown in the table each of these items no longer applies: (1) the Tablular Contract Fund Values and Tabular Cash Values shown on page 4 in the contract; (2) any supplementary benefits or other extra benefits that were made a part of the contract by rider or endorsement; (3) any of the provisions of the contract that apply to the varying of the insurance amount or cash value due to investment results in the separate account; and (4) any provisions of the contract that do not apply to the reduced paid-up insurance.

     If this contract is reinstated, the contract fund that applies upon reinstatement is as we state under Premium Payment and Reinstatement. The cash value and net cash value will be as we state under Contract Value Options.

     The attached table shows values at the ends of contract years. If we need to compute values at some time during a contract year, we will count the time since the start of the year. We will let you know the values for other durations if you ask for them.

Rider attached to and made a part of this contract

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

Secretary

Date                       Attest

ORD 86328--88

EXHIBIT 26(d)(xxii)

[PRUDENTIAL LOGO]

Insured                                                                                                Rider for Policy No.

OPTION TO EXCHANGE POLICY

PREMIUM

     We grant this option in consideration of payment now of an extra single premium of $XXX.XX. The Premium Adjustment provision of this contract will not apply to this premium.

RIGHT TO EXCHANGE

     You may be able to exchange this contract for a new contract of life insurance on the life of a new Insured.

EXCHANGE DATE

     The phrase exchange date means the date you choose in your request for the exchange. It may not be more than 31 days after the date of your request; it may not be a date on which this contract is in default.

CONDITIONS

     Your right to make this exchange is subject to all these conditions:

     1. The new Insured (a) was living on the contract date of this contract and (b) has not reached his or her 70th birthday as of the exchange date.

     2. You will apply to be the owner of the new contract.

     3. On the exchange date, we must not be waiving premiums under any benefit in this contract for waiving them in the event of disability.

     4. You must give us any facts we need to satisfy us that the new Insured is insurable for the new contract.

     5. You must satisfy us that you have an insurable interest in the new Insured's life.

     6. You must ask for the exchange and apply for the new contract in forms that meet our needs; the new Insured, as the person proposed for coverage, must join with you in signing the application.

     7. We must have your request, the application, this contract, and any payment required under Charge for Exchange and under Miscellaneous, at our Home Office within the 31 day period ending on the exchange date.

     The new contract will take effect on the exchange date only if we approve its issue and both the Insured and the new Insured are living on the exchange date. If the new contract takes effect, this contract will end just before the exchange date.

CONTRACT DATE

     The contract date of the new contract will be the same as the contract date of this one.

CONTRACT SPECIFICATIONS

     The new contract will be on the same plan as this contract if on the contract date we regularly issued contracts on this plan for the same rating class, amount, issue age, and sex as the new contract. If this plan is not available, the new contract may be on any plan we consent to or on the Life Paid Up at Age 85 plan.

     Its face amount will be the amount you ask for in the application. But that amount (1) must be an amount we regularly issued on its contract date, and (2) cannot be more than the face amount of this contract.

     We will set the new Insured's issue age in accord with our regular rules that were in use on the contract date of the new contract. We will base the premiums on the new Insured's age and sex. To compute the premiums, we will use: (1) our rates that were in use on the contract date of the new contract; and (2) the new Insured's rating class as of the exchange date.

     The new contract may not be one with extra benefits except as we state under Miscellaneous.

ORD 86306--88

     We will endorse the new contract to show that the period we state in its incontestability provision and in its Suicide Exclusion will start on the exchange date, not on the date of the new contract. The endorsement will also state how we will compute the amount to be paid under the new contract if (1) we have a legal basis for contesting it, or (2) deatn results from suicide in the stated period. We describe how we will compute that amount under Miscellaneous.

     In issuing the new contract, we have the right to limit or exclude any war and aviation risks, in accord with our rules in use on the exchange date.

CONTRACT FUND

     The contract fund of this contract will become the contract fund of the new contract. If this contract and the new contract have premium accounts, the premium account of this contract will become the premium account of the new contract.

CHARGE FOR EXCHANGE

     If the contract fund and premium account of the new contract are such that it would be in default on the exchange date, we will charge you a premium sufficient to bring it out of default.

SURRENDER CHARGES

     If the new contract is surrendered, we will determine its net cash value using the greater of the surrender charges that would apply under the old and new contracts.

MISCELLANEOUS

     The new contract may have supplementary benefits or other extra benefits only if we consent. If we consent, you must give us any facts we need to satisfy us that the new Insured is insurable for the benefit(s). And we must be paid any charge we may then require.

     If this contract has contract debt at the time of the exchange, the debt may be paid back or it may be transferred to the new contract. But if the debt would be more than the loan value of the new contract on the exchange date, the excess must be paid to us.

     To compute the amount to be paid under the new contract if (1) we have a legal basis for contesting it, or (2) death results from suicide in the stated period, here is what we will do. First, we will identify the part of the Contract Fund of the new contract that came from this contract on the exchange date. We will add to that the amount of the charge, if any, for the exchange and any premiums paid on the new contract and we will subtract any contract debt. If the new Insured is living we will make this computation as of the date of the new contract is ended. Otherwise we will do so as of the date of his or her death.

     The net cash value of the new contract as of the date of computation might be more than the amount determined above. If so, we will pay that value instead.

OTHER EXCHANGES

     You may be able to exchange this contract other than in accord with the requirements we state in this rider. But this may be done only if we consent, and will be subject to conditions and charges that are then determined.

Rider attached to and made a part of this contract

The Prudential Insurance Company of America,

By  /s/ DOROTHY K. LIGHT

Secretary

Effective Date                                                                           Attest

ORD 863O6--88

EXHIBIT 26(d)(xxiii)

ENDORSEMENTS

(Only we can endorse this contract.)

ALTERATION OF TEXT

     The provision of this policy entitled "Ownership and Control" is replaced at issue by the following:

OWNERSHIP AND CONTROL

     Unless we endorse this contract to say otherwise, while the Insured is living and less than 21 years of age the owner of the contract is the applicant for it. But if the applicant is not living the owner, except as we state below, is the beneficiary(ies) who at the time would be entitled to any proceeds arising from the Insured's death. If there is no such beneficiary at the time, the owner is the Insured. A beneficiary named by the Insured will not replace the Insured as owner.

     After the Insured is 21 years of age, the owner is the Insured.

     While the Insured is living the owner alone is entitled to any contract benefit and value, and to the exercise of any right and privilege granted by the contract or by us. This includes, but is not limited to, these rights: (1) to assign the contract; and (2) to change any subsequent owner. A request for such a change must be in writing to us at our Home Office and in a form that meets our needs. The change will take effect only when we endorse the contract to show it.

     If the owner is the Insured, but he or she (1) is not able, due to age, to exercise rights, and (2) has no legal guardian to do so, we have the right to let a person who appears to us to be responsible for the Insured's support or welfare, act for the Insured. We will not do so unless the action appears to us to be for the Insured's benefit.

The Prudential Insurance Company of America,

By  /s/  DOROTHY K. LIGHT

    --------------------------------

         Secretary

ORD 86309--88

EXHIBIT 26(d)(xxiv)

[The PRUDENTIAL LOGO]

Insured                       Rider for Policy No.

JOHN DOE                        xx   xxx xxx

---------------------------------------------------

     This contract is issued as a conversion from an earlier contract.

     The period we state under Incontestability in this contract will start on the issue date of the earlier contract. But if that contract was reinstated before the date of this contract, for each reinstatement we will have the right to use as a basis for a contest of this contract the statements that were made to us at the time. The period during which we will have that right will be the period we state under Incontestability in this contract; it will start on the date of the reinstatement.

     The period we state under Suicide Exclusion in this contract will start on the issue date of the earlier contract.

     Rider attached to and made a part of this contract on the Contract Date

The Prudential Insurance Company of America,

By  /s/  SPECIMEN

    --------------------------------

         Secretary

ORD 86311--81

EXHIBIT 26(d)(xxv)

ENDORSEMENTS

(Only we can endorse this contract.)

     Any reference, in any provision of this contract, to the sex of any person will be ignored except for the purpose of identification. For any settlement payable for the lifetime of one or more payees, the female rates we show in the contract will apply to both male and female payees.

     Not withstanding anything in this contract to the contrary, when the contract is in default, it will stay in force as reduced paid-up insurance.

BASIS OF COMPUTATION

MORTALITY TABLES DESCRIBED

     We base all net premiums and net values to which we refer in this contract on the Insured's issue age and on the length of time since the contract date. We use the Commissioners 1980 Standard Ordinary Non-Smokers Mortality Table B and continuous functions based on age last birthday.

INTEREST RATE

     For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year.

EXCLUSIONS

     When we compute net values, tabular values, and reduced paid-up insurance we exclude the value of any supplementary benefits and any other extra benefits added by rider to this contract.

VALUES AFTER 20 CONTRACT YEARS

     Tabular values not shown on page 4 will be computed using the standard nonforfeiture method and the mortality table and interest rate we describe above. We show the nonforfeiture factors in the contract data pages.

MINIMUM LEGAL VALUES

     The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required, we have given the insurance regulator a detailed statement of how we compute values and benefits.

The Prudential Insurance Company of America,

By  /s/  DOROTHY K. LIGHT

    --------------------------------

         Secretary

ORD 86303--88

EXHIBIT 26(d)(xxvi)

- ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

ENDORSEMENTS

(Only we can endorse this contract.)

     Any reference, in any provision of this contract, to the sex of any person will be ignored except for the purpose of identification. For any settlement payable for the lifetime of one or more payees, the female rates we show in the contract will apply to both male and female payees.

     Not withstanding anything in this contract to the contrary, when the contract is in default, it will stay in force as reduced paid-up insurance.

BASIS OF COMPUTATION

MORTALITY TABLES DESCRIBED

     We base all net premiums and net values to which we refer in this contract on the Insured's issue age and an the length of time since the contract date. We use the Commissioners 1980 Standard Ordinary Smokers Mortality Table B and continuous functions based on age last birthday.

INTEREST RATE

     For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year.

EXCLUSIONS

     When we compute net values, tabular values, and reduced paid-up insurance we exclude the value of any supplementary benefits and any other extra benefits added by rider to this contract.

VALUES AFTER 20 CONTRACT YEARS

     Tabular values not shown on page 4 will be computed using the standard nonforfeiture method and the mortality table and interest rate we describe above. We show the nonforfeiture factors in the contract data pages.

MINIMUM LEGAL VALUES

     The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required, we have given the insurance regulator a detailed statement of how we compute values and benefits.

The Prudential Insurance Company of America,

By  /s/  A  B  C  D

    --------------------------------

Secretary

ORD 86304--88

EXHIBIT 26(d)(xxvii)

ENDORSEMENTS

(Only we can endorse this contract.)

VOTING RIGHTS

     We are a mutual life insurance company. Our principal Office is in Newark, New Jersey, and we are incorporated in that State. By law, we have 24 directors.  This includes 16 elected by our policyholders (four each year for four year terms), two of our Officers, and six public directors named by New Jersey's Chief Justice.

     The election is held on the first Tuesday in April from 10:00 A.M. to 2:00 P.M. in our Office at Prudential Plaza, Newark, N.J. After this contract has been in force for one year, you may vote either in person or by mail. We will send you a ballot if you ask for one. Just write to the Secretary at Prudential Plaza, Newark, New Jersey 07101, at least 60 days before the election date. By law, your request must show your name, address, policy number and date of birth.  Only individuals at least 18 years old may vote.

HOME OFFICE LOCATIONS

     When we use the term Home Office, we mean any of these Prudential Offices:

CORPORATE OFFICE, NEWARK, N.J.                                           NORTH CENTRAL HOME OFFICE,

MINNEAPOLIS, MINN.

EASTERN HOME OFFICE,                                                                SOUTH-CENTRAL HOME OFFICE,

FORT WASHINGTON, PA.                                                               JACKSONVILLE, FLA.

The Prudential Insurance Company of America,

By   /s/  SPECIMEN

    --------------------------------

         Secretary

COMB 86184--88

EXHIBIT 26(d)(xxviii)

ENDORSEMENTS

(Only we can endorse this contract.)

BASIS OF COMPUTATION

MORTALITY TABLES DESCRIBED

     Except as we state in the next paragraph, (1) we base all net premiums and net values to which we refer in this contract on the Insured's issue age and sex and on the length of time since the contract date; (2) we use the Commissioners 1980 Standard Ordinary Non-Smokers Mortality Table; and (3) we use continuous functions based on age last birthday.

     For extended insurance, we base net premiums and net values on the Commissioners 1980 Non-Smokers Extended Term Insurance Table.

INTEREST RATE

     For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year.

EXCLUSIONS

     When we compute net values, tabular values, reduced paid-up insurance and extended insurance, we exclude the value of any supplementary benefits and any other extra benefits added by rider to this contract.

VALUES AFTER 20 CONTRACT YEARS

     Tabular values not shown on page 4 will be computed using the standard nonforfeiture method and the mortality tables and interest rate we describe above. We show the nonforfeiture factors in the contract data pages.

MINIMUM LEGAL VALUES

     The cash, loan and other values in this contract are at least as large as these set by law where it is delivered. Where required, we have given the insurance regulator a detailed statement of how we compute values and benefits.

The Prudential Insurance Company of America,

By  /s/  DOROTHY K. LIGHT

    --------------------------------

         Secretary

ORD 86185--88

EXHIBIT 26(d)(xxix)

ENDORSEMENTS

(Only we can endorse this contract.)

BASIS OF COMPUTATION

MORTALITY TABLES DESCRIBED

     Except as we state in the next paragraph, (1) we base all net premiums and net values to which we refer in this contract on the Insured's issue age and sex and on the length of time since the contract date; (2) we use the Commissioners 1980 Standard Ordinary Smokers Mortality Table; and (3) we use continuous functions based on age last birthday.

     For extended insurance, we base net premiums and net values on the Commissioners 1980 Smokers Extended Term Insurance Table.

INTEREST RATE

     For all net premiums and net values to which we refer in this contract we use an effective rate of 4% a year.

EXCLUSIONS

     When we compute net values, tabular values, reduced paid-up insurance and extended insurance, we exclude the value of any supplementary benefits and any other extra benefits added by rider to this contract.

VALUES AFTER 20 CONTRACT YEARS

     Tabular values not shown on page 4 will be computed using the standard nonforfeiture method and the mortality tables and interest rate we describe above. We show the nonforfeiture factors in the contract data pages.

MINIMUM LEGAL VALUES

     The cash, loan and other values in this contract are at least as large as those set by law where it is delivered. Where required, we have given the insurance regulator a detailed statement of how we compute values and benefits.

The Prudential Insurance Company of America,

By  /s/  DOROTHY K. LIGHT

    --------------------------------

         Secretary

ORD 86203--88

EXHIBIT 26(d)(xxx)

RIDER FOR TERM INSURANCE BENEFIT ON LIFE OF

INSURED--DECREASING AMOUNT AFTER THREE YEARS

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay an amount under this benefit if we receive due proof that the Insured died: (1) in the term period for the benefit; and (2) while this contract is in force and not in default beyond the last day of the grace period.  Any proceeds under this contract that may arise from the Insured's death will include this amount. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

     We will use the table below to compute the amount we will pay. We show the initial amount of term insurance under this benefit on the contract data pages.  We also show the term period for the benefit there. It starts on the contract date, which we show on the first page. The anniversary at the end of the term period is part of that period.

TABLE OF AMOUNTS OF INSURANCE

AMOUNTS PAYABLE

     We show here the amount we will pay, based on the Insured's issue age, for each $1,000 of initial amount of term insurance if death occurs in the contract year ending with the anniversary shown.

----------------------------------------------------------------------------------------------------------

ISSUE AGE

---------------------------------------------------------------------------------------------------------

ANNIVER-

 SARY

          18        19         20        21         22        23        24         25        26         27        28

-------------------------------------------------------------------------------------------------------------------------------------------

 1       $1000     $1000      $1000     $1000      $1000     $1000     $1000      $1000     $1000      $1000     $1000

 2        1000        1000       1000      1000          1000       1000       1000        1000       1000        1000       1000

 3        1000       1000        1000       1000        1000       1000       1000        1000       1000        1000       1000

 4         978         977          977         976          976         975         974          974         973          972         971

 5         956         955          953         952          951         950         949          947         946          944         943

 6         933         932          930         929          927         925         923          921         919          917         914

 7         911         909          907         905          902         900         897          895         892          889         886

 8         889         886          884         881          878         875         872          868         865          861         857

 9         867         864          860         857          854         850         846          842         838          833         829

10         844        841          837         833          829         825         821          816         811          806         800

11         822        818         814          810          805         800         795          789         784          778         771

12         800        795         791          786          780         775         769          763         757          750         743

13         778       773        767       762        756       750       744        737       730        722       714

14         756       750        744       738        732       725       718        710       703        694       686

15         733       727        721       714        707       700       692        684       676        667       657

16         711       705        698       690        683       675       667        658       649        639       629

17         689       682        674       667        659       650       641        632       622        611       600

18         667       659        651       643        634       625       615        605       595        583       571

19         644       636        628       619        610       600       590        579       568        556       543

20         622       614        605       595        585       575       564        553       540        528       514

21        600       591        581       571        561       550       538        526       513        500       486

22        578       568        558       548        537       525       513        500       486        472       457

23        556       545        535       524        512       500       487        474       459        444       429

24        533       523        512       500        488       475       462        447       432        417       400

25        511       500        488       476        463       450       436        421       405        389       371

26        489       477        465       452        439       425       410        395       378        361       343

27        467       454        442       429        415       400       385        368       351        333       314

28        445       432        419       405        390       375       359        342       324        306       286

29        422       409        395       381        366       350       333        316       297        278       257

30        400       386        372       357        341       325       308        289       270        250       229

31        378       364        349       333        317       300       282        263       243        222       200

32        356       341        325       310        293       275       256        237       216        200       200

33        333       318        302       286        268       250       231        210       200        200       200

34        311       295        279       262        244       225       205        200       200        200       200

35        289       273        256       238        220       200       200        200       200        200       200

----------------------------------------------------------------------------------------------------------

AL 136B

---------------------------------------------------------------------------------------------------------------------

ISSUE AGE

---------------------------------------------------------------------------------------------------------------------

ANNIVER-

 SARY     18        19         20        21         22        23        24         25        26         27        28

---------------------------------------------------------------------------------------------------------------------

36       $267      $250       $232      $214       $200      $200      $200       $200      $200       $200      $200

37        245       227        209       200        200       200       200        200       200        200       200

38        222       204        200       200        200       200       200        200       200        200        *

39        200       200        200       200        200       200       200        200       200         *

40        200       200        200       200        200       200       200        200        *

41        200       200        200       200        200       200       200         *

42        200       200        200       200        200       200        *

43        200       200        200       200        200        *

44        200       200        200       200         *

45        200       200        200        *

46        200       200         *

47        200        *

*NO AMOUNT PAYABLE IF DEATH OCCURS

IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.

---------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------

ISSUE AGE

---------------------------------------------------------------------------------------------------------------------

ANNIVER-

 SARY    29      30     31     32     33     34       35       36       37     38       39       40      41       42

---------------------------------------------------------------------------------------------------------------------

 1      $1000  $1000  $1000  $1000  $1000  $1000    $1000    $1000    $1000   $1000    $1000    $1000   $1000   $1000

 2       1000   1000   1000   1000   1000   1000     1000     1000     1000    1000     1000     1000    1000    l000

 3       1000   1000   1000   1000   l000   1000     1000     1000     1000    1000     1000     1000    1000    1000

 4        971    970    969    968    967    966      964      963      962     960      958      957     955     952

 5        941    939    938    935    933    931      929      926      923     920      917      913     909     905

 6        912    909    906    903    900    897      893      889      885     880      875      870     864     857

 7        882    879    875    871    867    862      857      852      846     840      833      826     818     810

 8        853    849    844    839    833    828      821      815      808     800      792      783     773     762

 9        824    818    813    806    800    793      786      778      769     760      750      739     727     714

10        794    788    781    774    767    759      750      741      731     720      708      696     682     667

11        765    758    750    742    733    724      714      704      692     680      667      652     636     619

12        735    727    719    710    700    690      679      667      654     640      625      609     591     571

13        706    697    688    677    667    655      643      630      615     600      583      565     546     524

14        676    667    656    645    633    621      607      593      577     560      542      522     500     476

15        647    636    625    613    600    586      571      556      538     520      500      478     455     429

16        618    606    594    581    567    552      536      518      500     480      458      435     409     381

17        588    576    563    548    533    517      500      481      462     440      417      391     364     333

18        559    546    531    516    500    483      464      444      423     400      375      348     318     286

19        529    515    500    484    467    448      429      407      385     360      333      304     273     238

20        500    485    469    452    433    414      393      370      346     320      292      261     227     200

21        471    455    438    419    400    379      357      333      308     280      250      217     200     200

22        441    424    406    387    367    345      322      296      269     240      208      200     200     200

23        412    394    375    355    333    310      286      259      231     200      200      200     200     200

24        382    364    344    323    300    276      250      222      200     200      200      200     200      *

25        353    333    313    290    267    241      214      200      200     200      200      200      *

26        324    303    281    258    233    207      200      200      200     200      200       *

27        294    273    250    226    200    200      200      200      200     200       *

28        265    243    219    200    200    200      200      200      200      *

29        235    212    200    200    200    200      200      200       *

30        206    200    200    200    200    200      200       *

31        200    200    200    200    200    200       *

32        200    200    200    200    200     *

33        200    200    200    200     *

34        200    200    200     *

35        200    200     *

36        200     *

*NO AMOUNT PAYABLE IF DEATH OCCURS

IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.

---------------------------------------------------------------------------------------------------------------------

AL 136B

---------------------------------------------------------------------------------------------------------------------

ISSUE AGE

---------------------------------------------------------------------------------------------------------------------

ANNIVER-

 SARY

43       44       45      46        47      48       49       50        51       52       53       54       55

---------------------------------------------------------------------------------------------------------------------

 1       $1000    $1000    $1000    $1000    $1000    $1000    $1000    $1000    $1000    $1000    $1000    $1000    $1000

 2        1000     1000     1000     1000     1000     1000     1000     1000     1000     1000     1000     1000     1000

 3        1000     1000     1000     1000     1000     1000     1000     1000     1000     1000     1000     1000     1000

 4         950      947      944      941      938      933      929      923      917      909      900      889      875

 5         900      895      889      882      875      867      857      846      833      818      800      778      750

 6         850      842      833      824      813      800      786      769      750      727      700      667      625

 7         800      789      778      765      750      733      714      692      667      636      600      556      500

 8         750      737      722      706      688      667      643      615      583      545      500      444      375

 9         700      684      667      647      625      600      571      538      500      455      400      333      250

10         650      632      611      588      563      533      500      462      417      364      300      222      200

11         600      579      556      529      500      467      429      385      333      273      200      200       *

12         550      526      500      471      438      400      357      308      250      200      200       *

13         500      474      444      412      375      333      286      231      200      200       *

14         450      421      389      353      313      267      214      200      200       *

15         400      368      333      294      250      200      200      200       *

16         350      316      278      235      200      200      200       *

17         300      263      222      200      200      200       *

18         250      211      200      200      200       *

19         200      200      200      200       *

20         200      200      200       *

21         200      200       *

22         200       *

*NO AMOUNT PAYABLE IF DEATH OCCURS

IN THIS CONTRACT YEAR OR ANY LATER CONTRACT YEAR.

---------------------------------------------------------------------------------------------------------------------

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

     You may be able to exchange this benefit for a new contract of life insurance on the Insured's life. In any of these paragraphs, when we use the phrase new contract we mean the contract for which the benefit may be exchanged.  You will not have to prove that the Insured is insurable.

CONDITIONS

     Your right to make this exchange is subject to all these conditions: (1) The amount we would have paid under this benefit if the Insured had died just before the contract date of the new contract must be large enough to meet the minimum for a new contract, as we describe under Contract Specifications. (2) You must ask for the exchange in writing and in a form that meets our needs. (3) You must send this contract to us to be endorsed. (4) We must have your request and the contract at our Home Office while the benefit is in force and at least five years before the end of its term period.

     The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date; and (2) this benefit ended just before that contract date.

CONTRACT DATE

     The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be less than five years before the end of the term period for the benefit. And it may not be more than 31 days before we have your request at our Home Office.

CONTRACT SPECIFICATIONS

     The new contract will be in the same rating class as this contract. We will set the issue age and the premiums for the new contract in accord with our regular rules in use on its contract date.

AL 136B

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex. But it cannot be any of these: (1) a single premium contract; or (2) one that insures anyone in addition to the Insured; or (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

     Its face amount will be the amount you ask for in your request. But except as we state below, that amount must be an amount we would regularly issue for the plan you choose. And it cannot be less than $10,000 or more than 80% of the amount we would have paid under this benefit if the Insured had died just before the contract date of the new contract. (Since $10,000 is 80% of $12,500, the amount we would have paid must be at least $12,500 for an exchange to be possible.) The face amount you want might be less than the smallest amount would regularly issue on the plan you wish. In that case we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to do so.

     If: (1) the new contract is either on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan; (2) this contract has a benefit for waiving or paying premiums in the event of disability; and (3) we would include that kind of benefit in other contracts like the new contract, we will put the benefit in the new contract. The benefit, if any, in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts we would regularly issue on the same plan and for the same rating class, amount, issue age and sex.

     We will not deny a benefit for waiving or paying premiums that we would have allowed under this contract, and that we would otherwise allow under the new contract, just because disability started before the contract date of the new contract. But any premium to be waived or paid for that disability under the new contract must be at the frequency that was in effect for this contract when the disability started.

     We will not waive or pay any premium under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if we have waived or paid premiums under this contract.

CHANGES

     You may be able to have this benefit changed to a new contract of life insurance (either with us or with a subsidiary of ours) other than in accord with the requirements for exchange that we state above. Or you may be able to exchange this benefit for an increase in the amount of insurance under this contract. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

MISCELLANEOUS PROVISIONS

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

     Benefit premiums and monthly charges stop on the contract anniversary at the end of the term period for this benefit.

AL 136B

TERMINATION

     This benefit will end on the earliest of:

     1. the end of the last day of grace if the contract is in default: it will not continue if a benefit takes effect under any contract value options provision that may be in the contract;

     2. the date the contract is surrendered under its Cash Value Option, if it has one;

     3. the end of the last day before the contract date of any other contract (a) for which the benefit is exchanged, or (b) to which the benefit is changed;

and

     4. the date the contract ends for any other reason.

     Further, if you ask us in writing, and we agree, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

This Supplementary Benefit rider attached to this contract on the Contract Date

The Prudential Insurance Company of America,

By  /s/  DOROTHY K. LIGHT

         ---------------------

              Secretary

EXHIBIT 26(d)(xxxi)

RIDER FOR RENEWABLE TERM INSURANCE BENEFIT ON LIFE OF INSURED

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay an amount under this benefit if we receive due proof that the Insured died: (1) in the term period or in any renewal term period for the benefit; and (2) while this contract is in force and not in default past its days of grace. Any proceeds under this contract that may arise from the Insured's death will include this amount. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

     We show the amount of term insurance under this benefit on the contract data pages. We also show the term period for the benefit there. It starts on the contract date that we show on the first page.

RENEWAL

     You may renew this benefit at the end of either its term period or a renewal term period. You will not have to prove that the Insured is insurable.  All these conditions must be met:

     1. A renewal term period must start not later than the contract anniversary when the Insured's attained age is 70.

     2. The contract must be in force and not in default beyond the last day of the grace period.

     In any of these paragraphs when we use the phrase renewal term period we mean a term period for which this benefit may be renewed. Except as we state in the next sentence, a renewal term period will be for the same number of years that we show on page 3 for the term period of the benefit. But if a renewal term period begins on the contract anniversary when the Insured's attained age is 66, 67, 68 or 69, that renewal term period will be for the number of years between the Insured's attained age on that anniversary and age 70.

     We show the amount(s) of renewal premiums on the contract data pages. We base them on the Insured's issue age and sex and on the length of time from the contract date to the due date of the first premium for the renewal term period.  The first of the premiums to be paid during a renewal term period will be due on the anniversary at the end of the most recent of the term periods; the premium period for the renewal term period will start on that date.

     The anniversary at the end of the final renewal term period is part of that term period.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

     You may be able to exchange this benefit for a new contract of life insurance on the Insured's life. In any of these paragraphs, when we use the phrase new contract we mean the contract for which the benefit may be exchanged.  You will not have to prove that the Insured is insurable.

CONDITIONS

     Your right to make this exchange is subject to all these conditions: (1) You must ask for the exchange in writing and in a form that meets our needs. (2) You must send this contract to us to be endorsed. (3) We must have your request and the contract at our Home Office while this benefit is in force and not later than the contract anniversary when the Insured's attained age is 70.

     The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (1 the insurance under the new contract took effect on its contract date; and (2) this benefit ended just before that contract date.

AL 187B

CONTRACT DATE

     The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be after the contract anniversary when the Insured's attained age is 70. And it may not be more than 31 days before we have your request at our Home Office.

CONTRACT SPECIFICATIONS

     The new contract will be in the same rating class as this contract. We will set the issue age and the premiums for the new contract in accord with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex. But it cannot be any of these: (1) a single premium contract; or (2) one that insures anyone in addition to the Insured; or (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

     Its face amount will be the amount you ask for in your request. But except as we state below, that amount must be an amount we would regularly issue for the plan you choose. And it cannot be less than $10,000 or more than the amount of term insurance for this benefit. The face amount you want might be less than the smallest amount we would regularly issue on the plan you wish. In that case we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to do so.

     If: (1) the new contract is either on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan; (2) this contract has a benefit for waiving or paying premiums in the event of disability; and (3) we would include that kind of benefit in other contracts like the new contract, we will put the benefit in the new contract. The benefit, if any, in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In this paragraph when we use the phrase other contracts like it we mean contracts we would regularly issue on the same plan and for the same rating class, amount, issue age and sex.

     We will not deny a benefit for waiving or paying premiums that we would have allowed under this contract, and that we would otherwise allow under the new contract, just because disability started before the contract date of the new contract. But any premium to be waived or paid for that disability under the new contract must be at the frequency that was in effect for this contract when the disability started.

     We will not waive or pay any premium under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if we have waived or paid premiums under this contract.

CHANGES

     You may be able to have this benefit changed to a new contract of life insurance (either with us or with a subsidiary of ours) other than in accord with the requirements for exchange which we state above. Or, you may be able to exchange this benefit for an increase in the amount of insurance under this contract. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

                            MISCELLANEOUS PROVISIONS

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

     Benefit premiums and monthly charges stop on the earlier of the death of the Insured and the end of the first renewal term period.

AL 187B

TERMINATION

     This benefit will end on the earliest of.

     1. the end of the last day of grace if the contract is in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract;

     2. the date the contract is surrendered under its Cash Value Option, if it has one;

     3. the end of the last day before the contract date of any other contract (a) for which the benefit is exchanged, or (b) to which the benefit is changed;

     4. the end of the day that is the first contract anniversary after the Insured's 75th birthday; and

     5. the date the contract ends for any other reason.

     Further, if you ask us in writing in the premium period, and we agree, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

     This Supplementary Benefit rider attached to this contract on the Contract Date

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

   ----------------------

          Secretary

AL 187B

EXHIBIT 26(d)(xxxii)

RIDER FOR LEVEL TERM INSURANCE BENEFIT ON LIFE OF INSURED SPOUSE

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay an amount under this benefit if we receive due proof that the insured spouse died: (1) in the term period for the benefit; and (2) while this contract is in force and not in default beyond the last day of the grace period. We will pay this amount to the beneficiary for insurance payable upon the insured spouse's death. But our payment is subject to all the provisions of the benefit and of the rest of this contract. The phrase insured spouse means the Insured's spouse named in the application for this contract.

     We show the initial amount of term insurance under this benefit on the contract data pages. We also show the term period for the benefit there. It starts on the contract date, which we show on the first page. The anniversary at the end of the term period is part of that period.

PAID-UP INSURANCE

PAID-UP INSURANCE ON LIFE OF INSURED SPOUSE

     The Insured might die: (1) in the term period for this benefit; (2) while this contract is in force and not in default past the last day of the grace period; and (3) while the insured spouse is living. In this case, the insurance on the life of the insured spouse under the benefit will become paid-up term insurance. While the paid-up insurance is in effect, the contract will remain in force until the end of the term period for the benefit. The paid-up insurance will have cash values but no loan value.

     If this benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. We base this net cash value on the insured spouse's age and sex. The insured spouse's age at any time will be his or her age last birthday on the contract date plus the length of time since that date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year.

     We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

     While the Insured is living, you may be able to exchange this benefit for a new contract of life insurance on the life of the insured spouse. In any of these paragraphs, when we use the phrase new contract we mean the contract for which the benefit may be exchanged. You will not have to prove that the insured spouse is insurable.

CONDITIONS

     Your right to make this exchange is subject to all these conditions: (1) The amount we would have paid under this benefit if the insured spouse had died just before the contract date of the new contract must be large enough to meet the minimum for a new contract, as we describe under Contract Specifications (2) You must ask for the exchange in writing and in a form that meets our needs.  (3) You must send this contract to us to be endorsed. (4) We must have your request and the contract at our Home Office while the benefit is in force and at least five years before the end of its term period.

     The new contract will not take effect unless the premium for it is paid while the insured spouse is living and within 31 days after its contract date.  If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date; and (2) this benefit ended just before that contract date.

AL 186B

CONTRACT DATE

     The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be less than five years before the end of the term period for the benefit. And it may not be more than 31 days before we have your request at our Home Office.

CONTRACT SPECIFICATIONS

     The new contract will be in the standard rating class. We will set the issue age and the premiums for the new contract in accord with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex. But it cannot be any of these: (1) a single premium contract; or (2) one that insures anyone in addition to the insured spouse; or (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

     Its face amount will be the amount you ask for in your request. But except as we state below, that amount must be an amount we would regularly issue for the plan you choose. And it cannot be less than $10,000 or more than 80% of the amount we would have paid under this benefit if the insured spouse had died just before the contract date of the new contract. (Since $10,000 is 80% of $12,500, the amount we would have paid must be at least $12,500 for an exchange to be possible.) The face amount you want might be less than the smallest amount we would regularly issue on the plan you wish. In that case we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to do so.

     If: (1) the new contract is either on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan; and (2) we would include in other contracts like it a benefit for waiving or paying premiums in the event of disability, here is what we will do. Even though this contract does not have that benefit on the life of the insured spouse, we will put it in a new contract on his or her life. The benefit, if any, in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In this paragraph, when we use the phrase other contracts like it, we mean contracts we would regularly issue on the same plan and for the same rating class, amount, issue age and sex.

     We will not waive or pay any premium under a new contract unless the disability started on or after its contract date. And we will not waive or pay any premium under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if we have waived or paid premiums under this contract.

CHANGES

     You may be able to have this benefit changed to a contract of life insurance (either with us or with a subsidiary of ours) other than in accord with the requirements for exchange that we state above. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

MISCELLANEOUS PROVISIONS

OWNERSHIP AND CONTROL

     Unless we endorse this contract to say otherwise, while the Insured is living the owner alone may exercise all ownership and control of this contract.  This includes, but is not limited to, these rights: (1) to assign the contract; and (2) to change any subsequent owner. A request for such a change must be in writing to us at our Home Office and in a form that meets our needs. The change will take effect only when we endorse the contract to show it.

     Unless we endorse this contract to say otherwise: (1) while any insurance is in force after the Insured's death, the owner of the contract will be the insured spouse; and (2) the owner alone will be entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us. But any insurance payable upon the Insured's death will be payable to the beneficiary for that insurance.

BENEFICIARY

     The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured.

     Unless we endorse this contract to say otherwise, the beneficiary for insurance payable upon the death of the insured spouse will be the Insured if living, otherwise the estate of the insured spouse.

AL 186B

     The beneficiary for insurance payable upon the death of the insured spouse may be changed. The request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office; this will be after the contract is sent to us to be endorsed, if we ask for it. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the insured spouse is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee of whom we know.

     When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated.

MISSTATEMENT OF AGE OR SEX

     If the insured spouse's stated age or sex or both are not correct, we will change each benefit and any amount payable to what the premium and charges would have bought for the correct age and sex.

     The Schedule of Premiums may show that premiums change or stop on a certain date. We may have used that date because the insured spouse would attain a certain age on that date. If we find that the issue age for the insured spouse was wrong, we will correct that date.

SUICIDE EXCLUSION

     If the insured spouse, whether sane or insane, dies by suicide within the period which we state in the Suicide Exclusion under General Provisions and while this benefit is in force, we will not pay the amount we describe under benefit above. Instead, we will pay no more than the sum of the monthly charges deducted for this benefit to the date of death plus the charge for applicable taxes. We will make that payment in one sum.

REINSTATEMENT

     If this contract is reinstated, it will not include the insurance that we provide under this benefit on the life of the insured spouse unless we are given any facts we need to satisfy us that the insured spouse is insurable for the benefit.

CONTRACT VALUE OPTIONS

     If this contract has a Contract Value Options provision, it will apply only during the Insured's lifetime. Any extended or reduced paid-up insurance that may be described there is on the life of the Insured only.

CONTRACT LOANS

     If this contract has a Loans provision, we will not consider any contract debt when we determine the amount payable, if any, at the death of the insured spouse.

INCONTESTABILITY

     Except for default, we will not contest this benefit after it has been in force during the insured spouse's lifetime for two years from the issue date.

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

     Benefit premiums and monthly charges stop on the earliest of: (1) the death of the Insured, (2) the death of the insured spouse, and (3) the contract anniversary at the end of the term period for this benefit.

TERMINATION

     This benefit will end on the earliest of:

     1. the end of the last day of grace of a premium in default; it will not continue if a benefit takes effect under any contract value options provision that may be in the contract;

     2. the end of the last day before the contract date of any other contract (a) for which the benefit is exchanged, or (b) to which the benefit is changed;

     3. the date the contract is surrendered under its Cash Value Option, if it has one, or the paid-up insurance, if any, under the benefit is surrendered; and

     4. the date the contract ends for any other reason.

AL 186B

     Further, if you ask us in writing, and we agree, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

This Supplementary Benefit rider attached to this contract on the Contract Date.

The Prudential Insurance Company of America,

     By  /s/  SPECIMEN

        ----------------------

              Secretary

EXHIBIT 26(d)(xxxiii)(a)

SETTLEMENT OPTIONS TO PROVIDE ACCELERATION OF

DEATH BENEFITS

     Subject to all the provisions of this rider and of the rest of the contract, we will make available the payments described below if the Insured becomes terminally ill, has an organ transplant, or is receiving care in a nursing home.

DEFINITIONS

     Convertible Proceeds.--The proceeds payable under this contract at the death of the Insured, after adjustment for any contract debt, excluding any term insurance arising from supplementary benefits (except level term insurance riders still in the conversion period and for which we charge a premium).

     Benefit Base.--The value we will use to determine the monthly benefit payable under the terminal illness option or the nursing home option. It will be computed based on the amount of convertible proceeds you elect to place under the option and a reduced life expectancy, calculated by us, that recognizes the Insured's eligibility for the benefit. We will also consider, when applicable:

     1. expected future premiums;

     2. future dividends according to the scale in effect when we make the computation;

     3. continuation of any reduction in contractually guaranteed charges;

     4. continuation of the current rate of any excess interest credited on contract values; and

     5. an expense charge of up to $150.

     The benefit base will be at least as great as the net cash value of the contract multiplied by the percentage of the convertible proceeds placed under the terminal illness option or the nursing home option, whichever is elected.

     Eligible Organ Transplant Center.--A facility licensed or approved as an organ transplant center by the state in which it is located.

     Eligible Nursing Home.--An institution or special nursing unit of a hospital which meets at least one of the following requirements:

     1) it is Medicare approved as a provider of skilled nursing care services; or

     2) it is licensed as a skilled nursing home or as an intermediate care facility by the state in which it is located; or

     3) it meets all the requirements listed below:

        a. it is licensed as a nursing home by the state in which it is located;

        b. its main function is to provide skilled, intermediate, or custodial

           nursing care;

        c. it is engaged in providing continuous room and board accommodations

           to 3 or more persons;

        d. it is under the supervision of a registered nurse (RN) or licensed

           practical nurse (LPN);

        e. it maintains a daily medical record of each patient; and

        f. it maintains control and records for all medications dispensed.

     Institutions which primarily provide residential facilities are not eligible nursing homes.

TERMINAL ILLNESS OPTION

     If we receive evidence satisfactory to us, including certification by a licensed physician, that the Insured's life expectancy is 6 months or less, you may elect this option to provide equal monthly payments for 6 months. For each $1,000 of benefit base, each payment will be at least $168.37, which assumes an annual interest rate of 5%.

     If the Insured dies before all the payments have been made, we will pay the beneficiary in one sum the present value of the remaining payments, calculated at the interest rate we used to determine those payments.

ORD 87241--89

     If you do not wish to receive monthly payments, you may elect to receive a single sum of equivalent value.

ORGAN TRANSPLANT OPTION

     You may elect this option if the Insured has a heart, liver, heart-lung, or bone marrow transplant prescribed by a licensed physician as necessary due to illness, injury, or infirmity. You may choose the amount you wish to receive, up to the lesser of the cost of the transplant and 75% of the convertible proceeds, but no more than $250,000. This amount will be paid to you in a single sum unless you ask to be paid in instalments. In that case, we will pay the equivalent amount in 6 monthly payments.

     The transplant must be performed after the contract date in an eligible organ transplant center. We must have your request for payment at our Home Office no later than 90 days after the transplant has been performed.

NURSING HOME OPTION

     If (1) the Insured is receiving care in an eligible nursing home and has received such care continuously for the preceding six months, and (2) we receive evidence satisfactory to us, including certification by a licensed physician, that the Insured is expected to remain in the nursing home until death, you may elect level monthly payments for the number of years shown in the table that follows. For each $1,000 of benefit base, each payment will be at least the minimum amount shown in that table, which assumes an annual interest rate of 5%.

ATTAINED AGE OF INSURED	PAYMENT PERIOD IN YEARS	MINIMUM MONTHLY PAYMENT FOR EACH $1,000 OF BENEFIT BASE
64 and under	10	$10.50
65-67	8	12.56
68-70	7	14.02
71-73	6	15.99
74-77	5	18.74
78-81	4	22.89
82-86	3	29.80
87 and over	2	43.64

     If the Insured dies before all the payments have been made, we will pay the beneficiary in one sum the present value of the remaining payments, calculated at the interest rate we used to determine those payments.

     If we agree, you may elect a longer payment period than that shown in the table; if you do, monthly payments will be reduced so that the present value of the monthly payments for the longer payment period is equal to the present value of the payments for the period shown in the table, calculated at an interest rate of at least 5%.

     We reserve the right to set a maximum monthly benefit that we will pay under this option. If we set a maximum, it will be at least $5,000; we will advise you of the amount before the payment period begins.

     If you do not wish to receive monthly payments, you may elect to receive a single sum of equivalent value.

EFFECT ON CONTRACT

     The convertible proceeds will be reduced by any amount used under one of these options.

     If you use only a portion of your convertible proceeds under one of these options, the contract will remain in force and reduced premiums will be payable. For insurance included in the convertible proceeds, premiums, values, and the amount of insurance will be reduced in the same proportion as the reduction in convertible proceeds. Insurance not included in the convertible proceeds will be unaffected.

     If you use only a portion of your convertible proceeds under the terminal illness option or the nursing home option, the remaining convertible proceeds must be at least $25,000.

ORD 87241--89

     If you use all of your convertible proceeds under the terminal illness option or the nursing home option, all other benefits under the contract based on the Insured's life will end. Any insurance under the contract on the life of someone other than the Insured will remain in effect and we will waive all future premiums for this insurance.

CONDITIONS

     Your right to receive payment under any of these options is subject to the following conditions:

     1. The contract must be in force other than as extended insurance.

     2. You must elect the option in writing in a form that meets our needs.

     3. The contract must not be assigned except to us as security for a loan.

     4. We reserve the right to set a minimum of no more than $50,000 on the amount of convertible proceeds you may place under an option.

     5. You must send us the contract.

     6. The primary purpose of life insurance is to meet your estate planning needs. This benefit provides for the accelerated payment of life insurance proceeds and is not intended to cause you to involuntarily invade proceeds ultimately payable to the named beneficiary. Therefore, accelerated death benefit proceeds will be made available to you on a voluntary basis only.

     Accordingly:

        (a) If you are required by law to exercise this option to satisfy the

            claims of creditors, whether in bankruptcy or otherwise, you are not

            eligible for this benefit.

        (b) If you are required by a government agency to exercise this option

            in order to apply for, obtain, or retain a government benefit or

            entitlement, you are not eligible for this benefit.

RIGHT TO CANCEL

     If you ask us in writing and send us the contract, we will cancel this rider.

     Rider attached to and made a part of this contract on the Contract Date

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

   --------------------

          Secretary

ORD 87241--89

EXHIBIT 26(d)(xxxiii)(b)

SETTLEMENT OPTIONS TO PROVIDE ACCELERATION OF DEATH BENEFITS

     Subject to all the provisions of this rider and of the rest of the contract, we will make the payments described below if the Insured is terminally ill or is confined to a nursing home.

     This rider is non-participating. Any dividend we pay under this contract will be the same as the one we pay under a contract that is like this one in all other respects but that does not have this rider.

DEFINITIONS

     Convertible Proceeds.--The proceeds we would pay under this contract at the death of the Insured, less any contract debt and any term insurance that comes from supplementary benefits (except level term insurance riders still in the conversion period and for which we charge a premium).

     Benefit Base.--The value we will use to determine the monthly benefit we will pay under the terminal illness option or the nursing home option. It will be computed based on: (1) the amount of convertible proceeds you place under the option; and (2) a reduced life expectancy. When we compute the life expectancy and the benefit base, we will use our assumptions. We may change those assumptions from time to time. We will consider, among other things, the Insured's age and sex and which of the options is being applied for. We will also consider, if they apply:

     1. expected future premiums;

     2. future dividends at the scale in effect when we make the computation;

     3. continuation of any reduction in guaranteed charges;

     4. continuation of the current rate of any excess interest credited on contract values; and

     5. a processing charge of up to $150.

     The benefit base for an option will be at least as great as the net cash value of the contract multiplied by the percentage of the convertible proceeds placed under that option.

     Eligible Nursing Home.--An institution or special nursing unit of a hospital which meets at least one of the following requirements:

     1) it is Medicare approved as a provider of skilled nursing care services; or

     2) it is licensed as a skilled nursing home or as an intermediate care facility by the state in which it is located; or

     3) it meets all the requirements listed below:

     a. it is licensed as a nursing home by the state in which it is located;

     b. its main function is to provide skilled, intermediate, or custodial

        nursing care;

     c. it is engaged in providing continuous room and board accommodations to 3

        or more persons;

     d. it is under the supervision of a registered nurse (RN) or licensed

        practical nurse (LPN);

     e. it maintains a daily medical record of each patient; and

     f. it maintains control and records for all medications dispensed.

     Institutions which primarily provide residential facilities are not eligible nursing homes.

TERMINAL ILLNESS OPTION

     To choose this option you must give us evidence that satisfies us that the Insured's life expectancy is 6 months or less; part of that evidence must be a certification by a licensed physician. This option provides equal monthly payments for 6 months. For each $1,000 of benefit base, each payment will be at least $168.37; this assumes an annual interest rate of 5%.

ORD 87241--90

     If the Insured dies before all the payments have been made, we will pay the beneficiary in one sum. The one sum we pay will be the present value of the payments that remain; we will compute the value based on the interest rate we used to determine those payments.

     If you do not want monthly payments, we will pay you the benefit base in one sum if you ask us to.

NURSING HOME OPTION

     You may choose this option if: (1) the Insured is confined to an eligible nursing home and has been confined there for all of the preceding six months; and (2) you give us evidence that satisfies us that the Insured is expected to stay in the nursing home until death. Part of that evidence must be a certification by a licensed physician. This option provides level monthly payments for the number of years shown in the table that follows. For each $1000 of benefit base, each payment will be at least the minimum amount shown in the table. The table uses an annual interest rate of 5%; we may use a higher rate.

ATTAINED AGE OF INSURED	PAYMENT PERIOD IN YEARS	MINIMUM MONTHLY PAYMENT FOR EACH $1,000 OF BENEFIT BASE
64 and under	10	$10.50
65-67	8	12.56
68-70	7	14.02
71-73	6	15.99
74-77	5	18.74
78-81	4	22.89
82-86	3	29.80
87 and over	2	43.64

     If the Insured dies before all the payments have been made, we will pay the beneficiary in one sum. The one sum we pay will be the present value of the payments that remain; we will compute the value based on the interest rate we used to determine those payments.

     If we agree, you may choose a longer payment period than that shown in the table; if you do, monthly payments will be reduced so that the present value of the payments is the same. We will use an interest rate of at least 5%.

     We reserve the right to set a maximum monthly benefit that we will pay under this option. If we do so, it will be at least $5,000.

     If you do not want monthly payments, we will pay you the benefit base in one sum if you ask us to.

EFFECT ON CONTRACT

     The convertible proceeds will be reduced by any amount converted under one of these options.

     If you convert only a part of your convertible proceeds, the contract will stay in force and premiums will be reduced. For insurance included in the convertible proceeds, values and the amount of insurance will be reduced in the same proportion as the reduction in convertible proceeds. The new premiums will be the ones that would apply if the contract had been issued at the reduced amount. Insurance not included in the convertible proceeds will not be affected.

     If you convert only a part of your convertible proceeds, the convertible proceeds that remain must be at least $25,000.

     If you convert all of your convertible proceeds, all other benefits under the contract based on the Insured's life will end. Any insurance under the contract on the life of someone other than the Insured will stay in effect; we will waive all future premiums for that insurance.

ORD 87241--90

CONDITIONS

     Your right to be paid under one of these options is subject to the following conditions:

     1. The contract must be in force other than as extended insurance.

     2. You must choose the option in writing in a form that meets our needs.

     3. The contract must not be assigned except to us as security for a loan.

     4. We reserve the right to set a minimum of no more than $50,000 on the amount of convertible proceeds you may place under an option.

     5. You must send us the contract.

     6. The main purpose of life insurance is to meet your estate planning needs. This benefit provides for the accelerated payment of life insurance proceeds. It is not meant to cause you to involuntarily invade proceeds ultimately payable to the named beneficiary. Accelerated death benefits will be made available to you on a voluntary basis only. Therefore:

        (a) If you are required by law to use this option to meet the claims of

            creditors, whether in bankruptcy or otherwise, you are not eligible

            for this benefit.

        (b) If you are required by a government agency to use this option in

            order to apply for, obtain, or keep a government benefit or

            entitlement, you are not eligible for this benefit.

RIGHT TO CANCEL

     If you ask us in writing and send us the contract, we will cancel this rider.

     Rider attached to and made a part of this contract on the Contract Date

The Prudential Insurance Company of America,

By /s/ SUSAN L. BLOUNT

    ---------------------------

         Secretary

ORD 87241--90

EXHIBIT 26(d)(xxxiii)(c)

SETTLEMENT OPTIONS TO PROVIDE ACCELERATION OF DEATH BENEFITS

     Subject to all the provisions of this rider and of the rest of the contract, we will make the payments described below if the Insured is terminally ill or needs an organ transplant.

This rider is non-participating. Any dividend we pay under this contract will be the same as the one we pay under a contract that is like this one in all other respects but that does not have this rider.

DEFINITIONS

     Convertible Proceeds.--The proceeds we would pay under this contract at the death of the Insured, less any contract debt and any term insurance (except level term insurance still in the conversion period and for which we charge a premium, or extended term insurance with at least one year remaining in the term).

     Benefit Base.--The amount we will pay under the terminal illness option or the organ transplant option. It will be computed based on: (1) the amount of convertible proceeds you place under the option, (2) a reduced life expectancy, and (3) an interest rate no greater than the greater of:

     (i) the yield on 90-day Treasury bills at the time of initial acceleration of benefits, and

     (ii) the current maximum adjustable policy loan interest rate based on the greater of:

     (a)  Moody's Corporate Bond Yield Averages--Monthly Average Corporates--

          published by Moody's Investors Service, Inc., or any successor

          thereto, that is approved by the New York Superintendent of Insurance,

          for the calendar month ending two month's before the date of

          application for an accelerated payment, and

     (b)  the policy guaranteed cash value interest rate plus one percent per

          annum.

     When we compute the life expectancy and the benefit base, we will use our assumptions. We may change those assumptions from time to time. We will consider, among other things, the Insured's age and sex and which of the options is being applied for. We will also consider, if they apply:

     1. expected future premiums;

     2. future dividends at the scale in effect when we make the computation;

     3. continuation of any reduction in guaranteed charges;

     4. continuation of the current rate of any excess interest credited on contract values; and

     5. a processing charge of up to $150.

     The benefit base will be at least as great as the net cash value of the contract multiplied by the percentage of the convertible proceeds placed under the terminal illness option or the organ transplant option, whichever is elected.

TERMINAL ILLNESS OPTION

     To choose this option, you must give us evidence that satisfies us that the Insured's life expectancy is 6 months or less; part of that evidence must be a certification by a licensed physician.

     We will pay you the benefit base in one sum.

ORGAN TRANSPLANT OPTION

     To choose this option, you must give us evidence that satisfies us that the Insured's life expectancy is 6 months or less unless the Insured receives a vital organ transplant; part of that evidence must be a certification by a licensed physician.

     We will pay you the benefit base in one sum.

ORD 87241--91   NY

EFFECT ON CONTRACT

     The convertible proceeds will be reduced by any amount converted under one of these options.

     If you convert only a part of your convertible proceeds, the contract will stay in force and premiums will be reduced. For insurance included in the convertible proceeds, values and the amount of insurance will be reduced in the same proportion as the reduction in convertible proceeds. The new premiums will be the ones that would apply if the contract had been issued at the reduced amount, and the existing provisions for premium payment will continue to apply.  Insurance not included in the convertible proceeds will not be affected.

     If you convert only a part of your convertible proceeds, the convertible proceeds that remain must be at least $25,000.

     If you convert all of your convertible proceeds, all other benefits under the contract based on the Insured's life will end. Any insurance under the contract on the life of someone other than the Insured will stay in effect; we will waive all future premiums for that insurance.

CONDITIONS

     Your right to be paid under one of these options is subject to the following conditions:

     1. The contract must be in force other than as extended insurance in the last year of its term.

     2. You must choose the option in writing in a form that meets our needs.

     3. The contract must not be assigned except to us as security for a loan.

     4. The minimum amount of convertible proceeds you may place under an option is the amount needed to provide a benefit of either 25% of the face amount of the contract or $50,000, whichever is less.

     5. You must send us the contract.

     6. The main purpose of life insurance is to meet your estate planning needs. This benefit provides for the accelerated payment of life insurance proceeds. It is not meant to cause you to involuntarily invade proceeds ultimately payable to the named beneficiary. Accelerated death benefits will be made available to you on a voluntary basis only. Therefore:

     (a)  If you are required by law to use this option to meet the claims of

          creditors, whether in bankruptcy or otherwise, you are not eligible

          for this benefit.

     (b)  If you are required by a government agency to use this option in order

          to apply for, obtain, or keep a government benefit or entitlement, you

          are not eligible for this benefit.

RIGHT TO CANCEL

     If you ask us in writing and send us the contract, we will cancel this rider.

Rider attached to and made a part of this contract on the Contract Date

     The Prudential Insurance Company of America,

     By /s/ SPECIMEN

        ---------------------------

        Secretary

ORD 87241--91  NY

EXHIBIT 26(d)(xxxiv)

RIDER FOR RENEWABLE TERM INSURANCE BENEFIT

ON LIFE OF INSURED SPOUSE

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay an amount under this benefit if we receive due proof that the insured spouse died: (1) in the term period or in any renewal term period for the benefit: and (2) while this contract is in force and not in default past the last day of the grace period. We will pay this amount to the beneficiary for insurance payable upon the insured spouse's death. But our payment is subject to all the provisions of the benefit and of the rest of this contract. The phrase insured spouse means the Insured's spouse named in the application for this contract.

     We show the amount of term insurance under this benefit on the contract data pages. We also show the term period for the benefit there. It starts on the contract date that we show on the first page.

RENEWAL

     We will renew this benefit at the end of either its term period or a renewal term period. You will not have to prove that the insured spouse is insurable. All these conditions must be met:

     1. A renewal term period must start not later than the contract anniversary

        when the insured spouse's attained age is 69.

     2. The contract must be in force and not in default past the last day of

        the grace period.

     3. We must be paid the first premium for a renewal term period as we

        describe below.

     In any of these paragraphs when we use the phrase renewal term period we mean a term period for which this benefit may be renewed. Except as we state in the next sentence, a renewal term period will be for the same number of years that we show on page 3 for the term period of the benefit. But if a renewal term period begins on the contract anniversary when the insured spouse's attained age is 66, 67, 68 or 69, that renewal term period will be for the number of years between the insured spouse's attained age on that anniversary and age 70.

     We show the amounts of renewal premiums on the contract data pages. We base them on the insured spouse's issue age and sex and on the length of time from the contract date to the due date of the first premium for the renewal term period. The first of the premiums to be paid during a renewal term period will be due on the anniversary at the end of the most recent term period: the premium period for the renewal term period will start on that date.

     The anniversary at the end of the final renewal term period is part of that term period.

PAID-UP INSURANCE

PAID-UP INSURANCE ON LIFE OF INSURED SPOUSE

     The Insured might die: (1) in the term period or in any renewal term period for this benefit: (2) while this contract is in force and not in default past the last day of the grace period; and (3) while the insured spouse is living. In this case, the insurance on the life of the insured spouse under the benefit will become paid-up term insurance. While the paid-up insurance is in effect, the contract will remain in force until the insured spouse's attained age 70.  The paid-up insurance will have cash values but no loan value.

     If this benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary. We base this net cash value on the insured spouse's age and sex. The insured spouse's age at any time will be his or her age last birthday on the contract date plus the length of time since that date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year.

AL 189D

     We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

     While the Insured is living, you may be able to exchange this benefit for a new contract of life insurance on the life of the insured spouse. You will not have to prove that the insured spouse is insurable. When we use the phrase new contract in this provision, we mean the contract for which the benefit may be exchanged.

CONDITIONS

     Your right to make this exchange is subject to all these conditions: (1) You must ask for the exchange in writing and in a form that meets our needs. (2) You must send this contract to us to be endorsed. (3) We must have your request and the contract at our Home Office while this benefit is in force and not later than the contract anniversary when the insured spouse's attained age is 65.

     The new contract will not take effect unless the premium for it is paid while the insured spouse is living and within 31 days after its contract date.  If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date; and (2) this benefit ended just before that contract date. We will return that part, if any, of the last premium paid for the benefit that is more than was needed to pay premiums to the contract date of the new contract.

PREMIUM CREDIT

     If your request for a new contract is received at our Home Office before the fifth anniversary of this contract, we will allow a credit on each premium that is due or scheduled for payment during the first year of the new contract.  If, as of the date of the new contract, this contract has been in force for at least one year, the credit will be equal to 10% of the premium for the new contract, excluding any premium or charge for an extra risk. If, as of the date of the new contract, this contract has been in force for less than one year, the credit will be equal to the credit determined in the preceding sentence, multiplied by the number of months for which this contract has been in force, divided by twelve. We will apply the credit to each due or scheduled first-year premium on the date we receive payment of the balance of that premium.

     Example: You might request an exchange during the third year of this contract. Let us assume that premiums due or scheduled under the new contract resulting from the exchange would be $100 monthly (with no premium or charge for an extra risk). We would apply a credit of $10 on each date on which we receive payment of at least $90 for a monthly premium that is due or scheduled for payment during the first year of the new contract. If you requested this exchange after this contract had been in force for only 6 months, we would apply a credit of $5 ($10 multiplied by 6, divided by 12) on each date on which we receive payment of $95 for A monthly premium that is due or scheduled during the first year of the new contract.

CONTRACT DATE

     The date of the new contract will be the date you ask for in your request.  But it may not be after the date to which premiums are paid for this benefit. It may not be after the contract anniversary when the insured spouse's attained age is 65. And it may not be more than 31 days before we have your request at our Home Office.

CONTRACT SPECIFICATIONS

     The new contract will be in the rating class we show for this benefit on the contract data pages. We will set the issue age and the premiums for the new contract in accordance with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex.  But it cannot be any of these: (1) a single premium contract; or (2) one that insures anyone in addition to the insured spouse; or (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

AL 189D

     Its face amount will be the amount you ask for in your request. But except as we state below, that amount must be an amount we would regularly issue for the plan you choose. And it cannot be less than $10,000 or more than the amount of term insurance for this benefit. The face amount you want might be less than the smallest amount we would regularly issue on the plan you want. In that case we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to do so.

     If (1) the new contract is either on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan, and (2) we would include in other contracts like it a benefit for waiving premiums in the event of disability, here is what we will do. Even though this contract does not have that kind of benefit on the life of the insured spouse, we will put that kind of benefit in the new contract on his or her life. The benefit, if any, in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In this paragraph, when we refer to other contracts, we mean contracts we would regularly issue on the same plan as the new contract and for the same rating class, amount, issue age and sex.

     We will not waive or pay any premium under the new contract unless the disability started on or after its contract date. And we will not waive or pay any premium under the new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if we have waived or paid premiums under this contract.

MISCELLANEOUS PROVISIONS

CHANGES

     You may be able to have this benefit changed to a contract of life insurance (either with us or with a subsidiary of ours) other than in accordance with the requirements for exchange that we state above. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

OWNERSHIP AND CONTROL

     Unless we endorse this contract to say otherwise, while the Insured is living the owner alone may exercise all ownership and control of this contract.  This includes, but is not limited to, these rights: (1) to assign the contract; and (2) to change any subsequent owner. A request for such a change must be in writing to us at our Home Office and in a form that meets our needs. The change will take effect only when we endorse the contract to show it.

     Unless we endorse this contract to say otherwise: (1) while any insurance is in force after the Insured's death, the owner of the contract will be the insured spouse; and (2) the owner alone will be entitled to (a) any contract benefit and value, and (b) the exercise of any right and privilege granted by the contract or by us. But any insurance payable upon the Insured's death will be payable to the beneficiary for that insurance.

BENEFICIARY

     The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured.

     Unless we endorse this contract to say otherwise, the beneficiary for insurance payable upon the death of the insured spouse will be the Insured if living, otherwise the estate of the insured spouse.

     The beneficiary for insurance payable upon the death of the insured spouse may be changed. The request must be in writing and in a form that meets our needs. It will take effect only when we file it at our Home Office; this will be after the contract is sent to us to be endorsed, if we ask for it. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the insured spouse is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee we know of.

     When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated.

AL 189D

MISSTATEMENT OF AGE OR SEX

     If the insured spouse's stated age or sex or both are not correct, we will change each benefit and any amount payable to what the premium and charges would have bought for the correct age and sex.

     The Schedule of Premiums may show that premiums change or stop on a certain date. We may have used that date because the insured spouse would attain a certain age on that date. If we find that the issue age for the insured spouse was wrong, we will correct that date.

SUICIDE EXCLUSION

     If the insured spouse, whether sane or insane, dies by suicide within the period which we state in the Suicide Exclusion under General Provisions, we will not pay the amount we describe under Benefit above. Instead, we will pay no more than the sum of the monthly charges deducted for this benefit. We will make that payment in one sum.

REINSTATEMENT

     If this contract is reinstated, it will not include the insurance that we provide under this benefit on the life of the insured spouse unless we are given any facts we need to satisfy us that the insured spouse is insurable for the benefit.

CONTRACT VALUE OPTIONS

     If this contract has a Contract Value Options provision, it will apply only during the Insured's lifetime. Any extended or reduced paid-up insurance that may be described there is on the life of the Insured only.

CONTRACT LOANS

     If this contract has a Loans provision, we will not consider any contract debt when we determine the amount payable, if any, at the death of the insured spouse.

INCONTESTABILITY

     Except for default, we will not contest this benefit after it has been in force during the insured spouse's lifetime for two years from the issue date.

BENEFIT PREMIUMS

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of the charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

     Benefit premiums and charges stop on the earliest of: (1) the death of the Insured, (2) the death of the insured spouse, and (3) the first contract anniversary that follows the end of the final renewal term period.

TERMINATION

     This benefit will end on the earliest of:

     1. the end of the last day of grace if the contract is in default; it will

        not continue if a benefit takes effect under any contract value options

        provision that may be in the contract;

     2. the end of the last day before the contract date of any other contract

        (a) for which the benefit is exchanged, or (b) to which the benefit is

        changed;

     3. the date the contract is surrendered under its Cash Value Option, if it

        has one, or the paid-up insurance, if any, under the benefit is

        surrendered;

     4. the end of the day that is the first contract anniversary after the

        insured spouse's 70th birthday; and

     5. the date the contract ends for any other reason.

     Further, if you ask us in writing in the premium period, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

THIS SUPPLEMENTARY BENEFIT RIDER ATTACHED TO THIS CONTRACT ON THE CONTRACT

DATE

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

    ---------------------------

         Secretary

AL 189D

EXHIBIT 26(d)(xxxv)

RIDER FOR LEVEL TERM INSURANCE BENEFIT

ON LIFE OF INSURED--PREMIUM INCREASES ANNUALLY

      This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data page(s).

BENEFIT

     We will pay an amount under this benefit if we receive due proof that the Insured died: (1) in the term period for the benefit; and (2) while this contract is in force and not in default past the last day of the grace period.  Any proceeds under this contract that may arise from the Insured's death will include this amount. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

     We show the amount of term insurance under this benefit on the contract data page(s). We also show the term period for the benefit there. It starts on the contract date, which we show on the first page. The anniversary at the end of the term period is part of that period.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

     You may be able to exchange this benefit for a new contract of life insurance on the Insured's life. You will not have to prove that the Insured is insurable. When we use the phrase new contract in this provision, we mean the contract for which the benefit may be exchanged.

CONDITIONS

     Your right to make this exchange is subject to all these conditions: (1) You must ask for the exchange in writing and in a form that meets our needs. (2) You must send this contract to us to be endorsed. (3) We must have your request and the contract at our Home office while the benefit is in force and not later than the second to occur of (a) the fifth contract anniversary; and (b) the contract anniversary on which the Insured's attained age is 65.

     The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date; and (2) this benefit ended just before that contract date.

PREMIUM CREDIT

     If your request for a new contract is received at our Home Office before the fifth anniversary of this contract, we will allow a credit on each premium that is due or scheduled for payment during the first year of the new contract.  If, as of the date of the new contract, this contract has been in force for at least one year, the credit will be equal to 10% of the premium for the new contract, excluding any premium or charge for an extra risk. If, as of the date of the new contract, this contract has been in force for less than one year, the credit will be equal to the credit determined in the preceding sentence, multiplied by the number of months for which this contract has been in force, divided by twelve. We will apply the credit to each due or scheduled first-year premium on the date we receive payment of the balance of that premium.

     Example: You might request an exchange during the third year of this contract. Let us assume that premiums due or scheduled under the new contract resulting from the exchange would be $100 monthly, (with no premium or charge for an extra risk). We would apply a credit of $10 on each date on which we receive payment of at least $90 for a monthly premium that is due or scheduled for payment during the first year of the new contract. If you requested this exchange after this contract had been in force for only 6 months, we would apply a credit of $5 ($10 multiplied by 6, divided by 12) on each date on which we receive payment of $95 for a monthly premium that is due or scheduled during the first year of the new contract.

AL 188 D

CONTRACT DATE

     The date of the new contract will be the date you ask for in your request.  But it may not be after the date to which premiums are paid for this benefit. It may not be later than the second to occur of (a) the fifth contract anniversary; and (b) the contract anniversary on which the Insured's attained age is 65. And it may not be more than 31 days before we have your request at our Home Office.

CONTRACT SPECIFICATIONS

     The new contract will be in the same rating class as this contract. We will set the issue age and the premiums for the new contract in accordance with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex. But it cannot be any of these: (1) a single premium contract; or (2) one that insures anyone in addition to the Insured; or (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

     Its face amount will be the amount you ask for in your request. But except as we state below, that amount must be an amount we would regularly issue for the plan you choose. And it cannot be less than $10,000 or more than the amount of term insurance for this benefit. The face amount you want might be less than the smallest amount we would regularly issue on the plan you want. In that case we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to do so.

     If (1) the new contract is either on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan, (2) this contract has a benefit for waiving or paying premiums in the event of disability, and (3) we would include that kind of benefit in other contracts like the new contract, we will put that kind of benefit in the new contract. The benefit, if any, in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In this paragraph, when we refer to other contracts, we mean contracts we would regularly issue on the same plan as the new contract and for the same rating class, amount, issue age and sex.

     We will not deny a benefit for waiving or paying premiums that we would have allowed under this contract, and that we would otherwise allow under the new contract, just because disability started before the contract date of the new contract. But any premium to be waived or paid for that disability under the new contract must be at the frequency that was in effect for this contract when the disability started.

     We will not waive any premium under the new contract unless it has a benefit for waiving premiums in the event of disability. This will be so even if we have waived premiums under this contract.

MISCELLANEOUS PROVISIONS

CHANGES

     You may be able to have this benefit changed to a new contract of life insurance (either with us or with a subsidiary of ours) other than in accordance with the requirements for exchange that we state above. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.  Benefit premiums and monthly charges stop on the contract anniversary at the end of the term period for this benefit.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the contract fund.

AL 188 D

TERMINATION

     This benefit will end on the earliest of:

     1. the end of its term period;

     2. the end of the last day of grace if the contract is in default; it will

        not continue if a benefit takes effect under any contract value options

        provision that may be in the contract;

     3. the end of the last day before the contract date of any other contract

        (a) for which the benefit is exchanged, or (b) to which the benefit is

        changed;

     4. the date the contract is surrendered under its Cash Value Option, if it

        has one; and

     5. the date the contract ends for any other reason.

     Further, if you ask us in writing in the premium period, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

     This Supplementary Benefit rider attached to this contract on the Contract Date

The Prudential Insurance Company of America,

By /s/   SPECIMEN

    -------------------------------

         Secretary

AL 188 D

EXHIBIT 26(d)(xxxvi)

RIDER FOR TERM INSURANCE BENEFIT ON LIFE OF

INSURED--DECREASING AMOUNT

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     We will pay an amount under this benefit if we receive due proof that the Insured died: (1) in the term period for the benefit: and (2) while this contract is in force and not in default beyond the last day of the grace period.  Any proceeds under this contract that may arise from the Insured's death will include this amount. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

     We show the initial Amount of Term Insurance under this benefit on the contract data pages. We also show the term period for the benefit there. It starts on the contract date, which we show on the first page. The anniversary at the end of the term period is part of that period.

AMOUNTS PAYABLE

     The amount we will pay depends on when death occurs. In the Table of Amounts of Insurance on the contract data pages we show the amount we will pay if death occurs in a given contract year.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

     You may be able to exchange this benefit for a new contract of life insurance on the Insured's life. You will not have to prove that the Insured is insurable. When we use the phrase new contract in this provision, we mean the contract for which this benefit may be exchanged.

CONDITIONS

     Your right to make this exchange is subject to all these conditions: (1) The amount we would have paid under this benefit if the Insured had died just before the contract date of the new contract must be large enough to meet the minimum for a new contract, as we describe under Contract Specifications. (2) You must ask for the exchange in writing and in a form that meets our needs. (3) You must send this contract to us to be endorsed. (4) We must have your request and the contract at our Home Office while the benefit is in force and at least five years before the end of its term period.

     The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date: and (2) this benefit ended just before that contract date.

PREMIUM CREDIT

     If your request for a new contract is received at our Home Office before the fifth anniversary of this contract, we will allow a credit on each premium that is due or scheduled for payment during the first year of the new contract.  If, as of the date of the new contract, this contract has been in force for at least one year, the credit will be equal to 10% of the premium for the new contract, excluding any premium or charge for an extra risk. If, as of the date of the new contract, this contract has been in force for less than one year, the credit will equal to the credit determined in the preceding sentence, multiplied by the number of months for which this contract has been in force, divided by twelve. We will apply the credit to each due or scheduled first-year premium on the date we receive payment of the balance of that premium.

     Example: You might request an exchange during the third year of this contract. Let us assume that premiums due or scheduled under the new contract resulting from the exchange would be $100 monthly (with no premium or charge for an extra risk). We would apply a credit of $10 on each date on which we receive payment of a least $90 for a monthly premium that is due or scheduled for payment during the first year of the new contract. If you requested this exchange after this contract had been in force for only 6 months, we would apply a credit of $5 ($10 multiplied by 6, divided by 12) on each date on which we receive payment of $95 for a monthly premium that is due or scheduled during the first year of the new contract.

AL 130E

CONTRACT DATE

     The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be less than five years before the end of the term period for the benefit. And it may not be more than 31 days before we have your request at our Home Office.

CONTRACT SPECIFICATIONS

     The new contract will be in the same rating class as this contract. We will set the issue age and the premiums for the new contract in accordance with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex.  But it cannot be any of these: (1) a single premium contract: or (2) one that insures anyone in addition to the Insured: or (3) one that includes or provides for term insurance other than extended insurance: or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium: or (5) one with supplementary benefits other than the benefit to which we refer later in these paragraphs.

     Its face amount will be the amount you ask for in your request. But except as we state below, that amount must be an amount we would regularly issue for the plan you choose. And it cannot be less than $10,000 or more than 80% of an amount we would have paid under this benefit if the Insured had died just before the contract date of the new contract. (Since $10,000 is 80% of $12,500, the amount we would have paid must be at least $12,500 for an exchange to be possible.) The face amount you want might be less than the smallest amount we would regularly issue on the plan you wish. In that case we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to do so.

     If (1) the new contract is either on the Life Paid Up at Age 85 plan or has a premium period at least as long as for that plan, (2) this contract has a benefit for waiving or paying premiums in the event of disability, and (3) we would include that kind of benefit in other contracts like the new contract, we will put that kind of benefit in the new contract. The benefit, if any, in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In this paragraph, when we refer to other contracts, we mean contracts we would regularly issue on the same plan as the new contract and for the same rating class, amount, issue age and sex.

     We will not deny a benefit for waiving or paying premiums that we would have allowed under this contract, and that we would otherwise allow under the new contract, just because disability started before the contract date of the new contract. But any premium to be waived or paid for that disability under the new contract must be at the frequency that was in effect for this contract when the disability started.

     We will not waive or pay any premium under a new contract unless it has a benefit for waiving or paying premiums in the event of disability. This will be so even if we have waived or paid premiums under this contract.

CHANGES

     You may be able to have this benefit changed to a new contract of life insurance (either with us or with a subsidiary of ours) other than in accord with the requirements for exchange that we state above. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

AL 130E

MISCELLANEOUS PROVISIONS

BENEFIT PREMIUMS AND CHARGES

     We show the premiums for this benefit in the contract data pages. From each premium payment, we make the deductions as shown in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is also shown on the contract data pages.

     Benefit premiums and monthly charges stop on the contract anniversary at the end of the tern period for this benefit.

TERMINATION

This benefit will end on the earliest of:

     1. the end of the last day of grace if the contract is in default; it will

        not continue if a benefit takes effect under any contract value options

        provision that may be in the contract;

     2. the end of the last day before the contract date of any other contract

        (a) for which the benefit is exchanged, or (b) to which the benefit is

        changed;

     3. the date the contract is surrendered under its Cash Value Option, if it

        has one; and

     4. the date the contract ends for any other reason.

     Further, if you ask us in writing in the premium period, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

     This Supplementary Benefit rider attached to this contract on the Contract Date

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

    ---------------------------

         Secretary

AL 130E

EXHIBIT 26(d)(xxxvii)

RIDER FOR A LEVEL PREMIUM OPTION

     This is a modified premium contract. On the contract change date (see Contract Change Date) the basic premium may increase to an amount no greater than that shown in the Schedule of Premiums in the contract data pages. This rider describes a level premium option which guarantees the basic level premium (excluding additional premiums for any supplementary benefits) will not change on the contract change date. But this is subject to all the provisions of this rider and of the rest of the contract.

BASIC LEVEL PREMIUMS

     We show the amount and frequency of the basic level premium in the Optional Schedule Of Level Premiums included in this rider. An increase or decrease in the face amount will change the basic level premiums.

SCHEDULED LEVEL PREMIUMS

     The scheduled level premiums are equal to the basic level premiums plus the charge for applicable taxes. The scheduled level premiums will change if the basic level premiums change or the charge for applicable taxes change. We show the amount of the first scheduled level premium in the level premium schedule.

     The scheduled level premium is the minimum premium required, at the frequency chosen, to continue the contract in full force and to guarantee the basic premium will not increase on the contract change date. This assumes you pay all level scheduled premiums when due, you make no withdrawals, and any contract debt does not exceed the cash value.

LEVEL PREMIUM ACCOUNT

     On the contract date, the level premium account is equal to the invested premium amount credited on that date, minus the basic level premium then due, plus the charge for payment processing. On any other day, the level premium account is equal to:

     1. what it was on the prior day; plus

     2. if the premium account was greater than zero on the prior day, interest

        on the excess at 4% a year; minus

     3. if the premium account was less than zero on the prior day, interest on

        the deficit at 4% a year; plus

     4. any invested premium amount credited on that day; minus

     5. any basic level premium due on that day less the charge for payment

        processing; minus

     6. any withdrawals on that day.

     On the contract change date, we will look at the level premium account described above. If the level premium account is zero or greater, we will not increase the basic premium from the amount shown in the schedule of level basic premiums. We may charge less. If the level premium account is less than zero, we will proceed as described under Contract Change Date(s).

     If level scheduled premiums that are due are not paid, or if smaller payments are made, the premium may increase on the contract change date.

     Payment of the level scheduled premium is at your option. We will bill you for the level scheduled premium if you ask us.

     This rider does not change the guarantees associated with the payment of scheduled premiums as described under Premium Payment And Reinstatement.

Rider attached to and made a part of this contract on the Contract Date.

The Prudential Insurance Company of America,

By /s/  SPECIMEN

   -------------------------

          Secretary

ORD 88705-92

EXHIBIT 26(d)(xxxviii)

PAYMENT OF UNSCHEDULED PREMIUM BENEFIT

TOTAL DISABILITY BENEFIT

     Under this rider we will pay the unscheduled premiums described below into the contract for you on the scheduled premium due dates while the Insured remains totally disabled. But this is subject to all the provisions of this benefit and of the rest of this contract.

DISABILITY DEFINED

     When we use the words disability and disabled in this benefit we mean total disability and totally disabled. Here is how we define them: (1) until the Insured has stayed disabled for two years, we mean that he or she cannot, due to sickness or injury, do any of the duties of his or her regular occupation; but (2) after the Insured has stayed disabled for two years, we mean that he or she cannot, due to sickness or injury, do any gainful work for which he or she is reasonably fitted by education, training, or experience.

     Except for what we state in the next sentence, we will at no time regard an Insured as disabled who is doing gainful work for which he or she is reasonably fitted by education, training, or experience. We will regard an Insured as disabled, even if working or able to work, if he or she incurs, during a period in which premiums are eligible to be paid by us as we describe below, one of the following: (1) permanent and complete blindness of both eyes; or (2) physical severance of both hands at or above the wrists or both feet at or above the ankles; or (3) physical severance of one hand at or above the wrist and one foot at or above the ankle.

CONDITIONS

     1. The Insured must become disabled while this contract is in force and not

        in default past its days of grace.

     2. The Insured must become disabled after the first contract year. If the

        Insured's issue age is less than 5, the Insured must become disabled on

        or after the first contract anniversary following his or her

        5th birthday.

     3. The Insured must become disabled before the first contract anniversary

        following his or her 65th birthday.

     4. The Insured must stay disabled for a period of at least 6 months while

        living.

UNSCHEDULED PREMIUMS ELIGIBLE TO BE PAID BY US

     If the Insured becomes disabled as described above, we will pay an unscheduled premium on each scheduled premium due date that occurs while the Insured remains disabled and prior to the first contract anniversary following his or her 65th birthday. In determining whether a due date occurs we will use the scheduled premium frequency in effect when the Insured becomes disabled. The total amount of unscheduled premiums we will pay in a contract year (the annual benefit amount) is described below.

     The amount of each unscheduled premium we pay will depend on the frequency with which scheduled premiums are due. If the scheduled premiums are due annually, each unscheduled premium we pay will equal the benefit amount. If the scheduled premiums are due other than annually, each unscheduled premium payment will be correspondingly smaller.

ANNUAL BENEFIT AMOUNT

     If the Insured becomes disabled during the first contract year, the annual benefit amount for that period of disability is zero.

     If the Insured becomes disabled during the second contract year, the annual benefit amount for that period of disability is equal to the smaller of: (1) the maximum annual benefit amount shown for this benefit in the contract data pages, and (2) the amount in the premium account (the premium account is described elsewhere in this contract) at the start of the second contract year.

0RD 88966--93

     If the Insured becomes disabled after the second contract year, the annual benefit amount for a period of disability will be the amount determined at the start of the contract year in which the Insured becomes disabled. It is equal to the smallest of: (1) the maximum annual benefit amount shown in the contract data pages, (2) the amount in the premium account divided by the number of whole years from the contract date, and (3) the annual benefit amount for the preceding contract year. The benefit amount may decrease only on a contract anniversary. It will never increase.

     If the annual benefit amount determined at the start of the second contract year is less than $50, we will consider it to be zero. If any subsequent benefit amount is less than one-half of the benefit amount determined at the start of the second contract year, we will consider it to be zero.

EXCEPTIONS

     We will not pay any unscheduled premiums if the Insured becomes disabled from: (1) an injury he causes to himself, or she causes to herself, on purpose; or (2) sickness or injury due to service on or after the contract date in the armed forces of any country(ies) at war. The word war means declared or undeclared war and includes resistance to armed aggression.

SUCCESSIVE DISABILITIES

     Here is what happens if the Insured becomes disabled (even in the first contract year), then gets well, and then becomes disabled again. In this case, we will not apply the six-month period that would otherwise be required by Condition (4) and will consider the second period of disability to be part of the first period unless: (1) the Insured has done gainful work, for which he or she is reasonably fitted, for at least six months between the periods; or (2) the Insured became disabled the second time from an entirely different cause.

     If we do not apply the six-month period required by Condition (4), we also will not count the days when there was no disability as part of the two year period when disability means the Insured cannot do any of the duties of his or her regular occupation.

NOTICE AND PROOF OF CLAIM

     Notice and proof of any claim must be given to us, if possible, while the Insured is living and disabled. We may also require proof at reasonable times that the Insured is still disabled. After he or she has been disabled for two years, we will not ask for proof of continued disability more than once a year.  As a part of any proof, we have the right to require that the Insured be examined at our expense by doctors of our choice.

WHEN WE WILL STOP PAYING ELIGIBLE UNSCHEDULED PREMIUMS

     We will stop paying unscheduled premiums that we would otherwise pay if: (1) we ask for proof that the Insured is disabled and we do not receive it; or (2) we require that the Insured be examined and he or she fails to do so.

CHARGES

     The monthly deduction from the contract fund for this benefit during any contract year will be the annual benefit amount for that contract year times the monthly rate. The monthly rate is shown in the contract data pages. Monthly deductions begin on the first contract anniversary.

ADDITIONAL UNSCHEDULED PREMIUMS DURING DISABILITY

     You may make additional unscheduled premium payments as provided in the Unscheduled Premiums section of the contract even when we are paying unscheduled premiums under this benefit. These unscheduled premiums will not change the benefit amount during that period of disability.

REINSTATEMENT OF BENEFIT

     If the conditions for reinstating this contract are met, this benefit may also be reinstated. To reinstate the full benefit, we must be paid an amount sufficient to restore the premium account to what it would have been had the contract not lapsed.

TERMINATION

     This benefit will end on the earliest of:

     1. the end of the last day of grace if the contract is in default; it will

        not continue if a benefit takes effect under any contract value options

        provision that may be in the contract;

     2. the end of the day before the first contract anniversary following the

        Insured's 65th birthday;

     3. the date the contract is surrendered under its Cash Value Option, if it

        has one;

     4. the contract anniversary on which the annual benefit amount is deemed to

        be zero, as described under Annual Benefit Amount; and

     5. the date the contract ends for any other reason.

CANCELLATION OF RIDER

     If you ask us in writing, we will cancel this rider as of the date of your request.

RIDER ATTACHED TO AND MADE A PART OF THIS CONTRACT ON THE CONTRACT DATE.

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

    ---------------------------

         Secretary

ORD 88966--93

EXHIBIT 26(d)(xxxix)

RIDER FOR SCHEDULED TERM INSURANCE BENEFIT

ON LIFE OF INSURED

     This benefit is a part of this contract only if it is included in the list of supplementary benefits on the contract data pages.

BENEFIT

     If we receive due proof that the Insured died while this rider was in force, we will include the amount of this benefit in any proceeds under the contract that may arise from that death. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

     We show the Schedule of Benefit Amounts on the contract data pages.

RIDER PREMIUMS AND CHARGES

     We show the premiums for this rider on the contract data pages. From each premium payment, we make the deductions as shown in these pages and the balance is the invested premium amount which is added to the contract fund.

     The monthly charge for this rider is deducted on each monthly date from the contract fund. (See the contract data pages.)

REQUESTED CHANGES IN SCHEDULE OF BENEFIT AMOUNTS

     You may change the Schedule of Benefit Amounts once each contract year, while this rider is in force. You may do so subject to the following conditions:

     1. You must ask for the change in writing and in a form that meets our

        needs.

     2. The change must be one permitted by our then current underwriting rules.

     3. For an increase, you must give us any facts we need to satisfy us that

        the Insured is insurable for the amount of the increase in the rating

        class in effect at issue as shown on page 3. We will not approve an

        increase if we are paying premiums according to any payment of premiums

        benefit that may be included in the contract.

     4. You must pay us any required underwriting fee.

     5. You must send us the contract to be endorsed.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT CONDITIONS

     You may be able to exchange all or part of the term insurance under this Benefit for a new contract of life insurance on the Insured's life. You will not have to prove that the Insured is insurable. When we use the phrase new contract in this provision, we mean the contract for which the term insurance may be exchanged.

CONDITIONS

     Your right to make this exchange is subject to all these conditions: (1) You must ask for the exchange in writing and in a form that meets our needs.  (2) You must send this contract to us to be endorsed. (3) We must have your request and the contract at our Home Office while this rider is in force and not later than the second to occur of (a) the fifth contract anniversary; and (b) the contract anniversary on which the Insured's attained age is 65. (4) This Benefit amount will be reduced by the exchanged amount of term insurance and premiums will be reduced accordingly.

     The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that: (1) the insurance under the new contract took effect on its contract date; and (2) the exchanged amount of term insurance ended just before that contract date. With respect to the part of the last premium that was used to pay for the exchanged amount of term insurance, we will return any of such part that is more than was needed to pay premiums to the contract date of the new contract.

AL 193

CONTRACT DATE

     The date of the new contract will be the date you ask for in your request. But it may not be more than 61 days after the date of your request. It may not be later than the second to occur of (a) the fifth contract anniversary; and (b) the one on which the Insured's attained age is 65. And it may not be more than 31 days before we have your request at our Home Office.

CONTRACT SPECIFICATIONS

     The new contract will be in the same rating class as this contract. We will set the issue age and the premiums for the new contract in accordance with our regular rules in use on its contract date.

     The new contract may be on any life or endowment plan we would regularly issue on its contract date for the same rating class, amount, issue age and sex. But it cannot be any of these: (1) a single premium contract; (2) one that insures anyone in addition to the Insured; (3) one that includes or provides for term insurance other than extended insurance; or (4) one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium.

     The new contract's face amount will be the amount you ask for in your request. It must be at least $10,000 and not more than the amount of term insurance that would have been in force under this Benefit on the contract date of the new contract if there had been no exchange. The face amount you want might be less than the smallest amount we would regularly issue on the plan you wish. In that case we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to do so.

     The new contract may have supplementary benefits only if you give us any facts we need to satisfy us that the Insured is insurable for the benefit(s), and if we consent.

MISCELLANEOUS PROVISIONS

CHANGES

     You may be able to have this Benefit changed to a new contract of life insurance other than in accord with the requirements for exchange that we state above. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

SUICIDE

     The Suicide Exclusion provision of the contract applies to this rider as issued.

     The following statement applies only with respect to any increase in coverage that results from a request you make in accordance with this rider.  If the Insured, whether sane or insane, dies by suicide within two years from the date of your application for the increase, we will pay no more than the sum of the premiums paid for the increase.

TERMINATION

     This rider will end on the earliest of:

     1. the end of the last year for which a benefit is shown in the Schedule of

        Benefit Amounts;

     2. the end of the last day before the contract date of any other contract

        for which the term insurance under this Benefit is exchanged or changed;

        but this applies only if the amount of term insurance left under the

        benefit after the exchange or change is less than the minimum allowed by

        our rules;

     3. the end of the last day of grace if the contract is in default;

     4. the date the contract is surrendered under its Cash Value Option, if it

        has one; and

     5. the date the contract ends for any other reason.

     Further, if you ask us in writing, we will cancel the rider as of the last monthly date on or before the date we receive your request. If we do so, or if the rider ends as we describe in 2 above, contract premiums and monthly charges due then and later will be reduced accordingly.

This Supplementary Benefit rider attached to this contract on the Contract Date

The Prudential Insurance Company of America,

By /s/ DOROTHY K. LIGHT

   ------------------------

          Secretary

AL 193

Exhibit 26(d)(xl)

 ENDORSEMENTS

 (Only we can endorse this contract.)

 ALTERATION OF TEXT

 The provision of this contract entitled "Assignment" is replaced

 at issue by the following:

AssignmentWe will not be deemed to know of an assignment unless we receive

 it, or a copy of it, at our Home Office. We are not obliged to

 see that an assignment is valid or sufficient. This contract may

 not be assigned to any employee benefit plan or program without

 our consent. This contract may not be assigned if such assignment

 would violate any federal, state, or local law or regulation

 prohibiting sex distinct rates for insurance.

 The Prudential Insurance Company of America,

 By Dorothy K. Light

 Secretary

--------------

 ORD 89224-94

--------------

EXHIBIT 26(d)(xli)

RIDER FOR TERM INSURANCE BENEFIT ON LIFE OF

INSURED SPOUSE

This benefit is a part of this contract only if it is listed on a contract data page.

BENEFIT

We will pay an amount under this benefit if we receive due proof that the insured spouse died: (1) in the term period for the benefit; and (2) while this contract was in force and not in default beyond the last day of the grace period. We will pay this amount to the beneficiary for insurance payable upon the insured spouse's death. But our payment is subject to all the provisions of the benefit and of the rest of this contract. The phrase insured spouse means the Insured's spouse named in the application for this contract.

We show the amount of term insurance under this benefit on a contract data page.  We also show the term period for the benefit there. The term period starts on the contract date.

BENEFIT PREMIUMS AND CHARGES

We show the premiums for this benefit on a contract data page. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the Contract Fund.

The monthly charge for this benefit is deducted on each monthly date from the Contract Fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

Benefit premiums and monthly charges stop on the earliest of: (1) the death of the Insured, (2) the death of the insured spouse, and (3) the first contract anniversary that follows the end of the term period.

PAID-UP INSURANCE

PAID-UP INSURANCE ON LIFE OF INSURED SPOUSE

If the Insured dies in the term period for this benefit, while this contract is in force and not in default past the last day of the grace period, and while the insured spouse is living, the insurance on the life of the insured spouse under the benefit will become paid-up term insurance during the remainder of the term period. While the paid- up insurance is in effect, the contract will remain in force. The paid-up insurance will have cash values but no loan value.

If this benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance plus any dividend credits. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary, adjusted for any dividend credits that were surrendered since then. We base this net cash value on the insured spouse's age and sex. The insured spouse's age at any time will be his or her age last birthday on the contract date plus the length of time since that date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year.

We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them.

AL 451 B--96

MISCELLANEOUS

OWNERSHIP

While any insurance is in force after the Insured's death, the insured spouse will be the owner of the contract and will be entitled to any contract benefit and value and the exercise of any right and privilege granted by the contract or by us. But any insurance payable upon the Insured's death will be payable to the beneficiary for that insurance.

BENEFICIARY

The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured.

On the contract date, unless we issue the contract with an endorsement that states otherwise, the beneficiary for insurance payable upon the death of the insured spouse will be the Insured if living, otherwise the estate of the insured spouse.

You may change the beneficiary for insurance payable upon the death of the insured spouse. The request must be in a form that meets our needs. It will take effect only when we file it; this will be after you send us the contract, if we require it to issue an endorsement. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the insured spouse is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee we know of.

When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated.

MISSTATEMENT OF AGE OR SEX

If the insured spouse's stated age or sex or both are not correct, we will change each benefit and any amount payable to what the premiums and charges would have bought for the correct age and sex.

The Schedule of Premiums may show that premiums change or stop on a certain date. We may have used that date because the insured spouse would attain a certain age on that date. If we find that the issue age for the insured spouse was wrong, we will correct that date.

SUICIDE EXCLUSION

If the insured spouse, whether sane or insane, dies by suicide within the period which we state in the Suicide Exclusion under Death Benefits provision, we will not pay the amount we describe under Benefit above. Instead, we will pay no more than the sum of the monthly charges deducted for this benefit to the date of death plus the charge for applicable taxes. We will make that payment in one sum.

REINSTATEMENT

If this contract is reinstated, it will not include the insurance that we provide under this benefit on the life of the insured spouse unless you prove to us that the insured spouse is insurable for the benefit.

INCONTESTABILITY

Except for default, we will not contest this benefit after it has been in force during the insured spouse's lifetime for two years from the issue date.

AL 451 B--96

TERMINATION OF BENEFIT

This benefit will end on the earliest of:

1. the end of the last day of the grace period if the contract is in default; it

   will not continue if either extended insurance or reduced paid-up insurance

   takes effect;

2. the date the contract is surrendered under its Cash Value Option, if it has

   one, or the paid-up insurance, if any, under the benefit is surrendered;

3. the end of its term period; and

4. the date the contract ends for any other reason.

Further, if you ask us in a form that meets our needs, we will cancel the benefit as of the first monthly date on or after we receive your request.  Contract premiums and monthly charges due then and later will be reduced accordingly.

THIS SUPPLEMENTARY BENEFIT RIDER ATTACHED TO THIS CONTRACT ON THE CONTRACT DATE

The Prudential Insurance Company of America.

                                          By /s/ SPECIMEN

                                             -----------------------

                                                 Secretary

AL 451 B--96

EXHIBIT 26(d)(xlii)

RIDER FOR TERM INSURANCE BENEFIT ON LIFE OF

INSURED SPOUSE

This benefit is a part of this contract only if it is listed on a contract data page.

BENEFIT

We will pay an amount under this benefit if we receive due proof that the insured spouse died: (1) in the term period for the benefit; and (2) while this contract was in force and not in default beyond the last day of the grace period. We will pay this amount to the beneficiary for insurance payable upon the insured spouse's death. But our payment is subject to all the provisions of the benefit and of the rest of this contract. The phrase insured spouse means the Insured's spouse named in the application for this contract.

We show the amount of term insurance under this benefit on a contract data page. We also show the term period for the benefit there. The term period starts on the contract date.

BENEFIT PREMIUMS AND CHARGES

We show the premiums for this benefit on a contract data page. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the Contract Fund.

The monthly charge for this benefit is deducted on each monthly date from the Contract Fund. The amount of that charge is included in the Schedule of Monthly Deductions from the Contract Fund in the contract data pages.

Benefit premiums and monthly charges stop on the earliest of: (1) the death of the Insured, (2) the death of the insured spouse, and (3) the first contract anniversary that follows the end of the term period.

PAID-UP INSURANCE

PAID-UP INSURANCE ON LIFE OF INSURED SPOUSE

If the Insured dies in the term period for this benefit, while this contract is in force and not in default past the last day of the grace period, and while the insured spouse is living, the insurance on the life of the insured spouse under the benefit will become paid-up term insurance during the remainder of the term period. While the paid-up insurance is in effect, the contract will remain in force. The paid-up insurance will have cash values but no loan value.

If this benefit becomes paid-up, it may be surrendered for its net cash value. This will be the net value on the date of surrender of the paid-up insurance plus any dividend credits. But, within 30 days after a contract anniversary, the net cash value will not be less than it was on that anniversary, adjusted for any dividend credits that were surrendered since then. We base this net cash value on the insured spouse's age and sex. The insured spouse's age at any time will be his or her age last birthday on the contract date plus the length of time since that date. We use the Commissioners 1980 Standard Ordinary Mortality Table. We use continuous functions based on age last birthday. We use an effective interest rate of 4% a year.

We will usually pay any cash value promptly. But we have the right to postpone paying it for up to six months. If we do so for more than 30 days, we will pay interest at the rate of 3% a year. If we are asked for the values which apply, we will furnish them.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

While the Insured is living, you may convert this benefit to a new contract of life insurance on the life of the insured spouse. You will not have to prove that the insured spouse is insurable.

CONDITIONS

You must ask for the conversion in a form that meets our needs, while the benefit is in force, and on or before the fifth contract anniversary. The amount we would have paid under this benefit if the insured spouse had died just before the contract date of the new contract must be large enough to meet the minimum for a new contract, as we describe under Contract Specifications.

The new contract will not take effect unless the premium for it is paid while the insured spouse is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the new contract took effect on its contract date and that this benefit ended just before that date.

AL 450 B--96

PREMIUM CREDIT

If we receive your request for conversion before the fifth anniversary of this contract, we will allow a credit on each premium that is due or scheduled for payment during the first year of the new contract.

If this contract has been in force for at least one year on the contract date of the new contract, we will allow the full credit described below. If this contract has been in force for less than one year as of that date, the credit will be reduced to consider the portion of a year for which this contract has then been in force.

The full credit is equal to the premiums for the term insurance being converted that were due, on the premium mode in effect at the time of conversion, during the twelve months preceding the date of the new contract. Extra premiums or charges for extra risks or extra benefits other than a benefit for waiving premiums are not considered in determining this credit.

We will reduce each premium due or scheduled for payment in the first year of the new contract to consider either the full or reduced credit, as appropriate.

CONTRACT DATE

You may choose any date for the contract date of the new contract that is not more than 61 days after the date of your request, not after the contract anniversary on which the insured spouse's attained age is 65, and not more than 31 days prior to the date we receive your request.

CONTRACT SPECIFICATIONS

The new contract will be in the rating class we show for this benefit on a contract data page. We will set the issue age and the premiums for the new contract in accordance with our regular rules in use on its contract date.

Except as we state in the next sentence, the new contract may be on any life or endowment plan we regularly issue on its contract date for the same rating class, amount, issue age and sex. It may not be: a single-premium contract; one that insures anyone in addition to the Insured; one that includes or provides for term insurance, other than extended insurance; one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or one with any benefit other than the basic insurance benefit and the waiver benefit we refer to below.

The basic amount of the new contract may be any amount you ask for as long as it is at least $10,000 and not more than the amount of term insurance for this benefit. If the amount you want is smaller than the smallest amount we would regularly issue on the plan you want, we will issue a new contract for as low as $10,000 on the Life Paid-Up at Age 85 plan if you ask us to.

Even though this contract does not have a benefit for waiving premiums on the life of an insured spouse, we will include this benefit in the new contract if its premium period runs to at least the Insured's attained age 85 and if we would include a waiver benefit in other contracts like the new one.

We will not waive any premium under the new contract unless it has a benefit for waiving premiums in the event of disability, even if we have waived premiums under this contract. And we will not waive any premium under the new contract unless the disability started on or after its contract date.

Any benefit for waiving premiums in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In any of these paragraphs, when we refer to other contracts, we mean contracts we would regularly issue on the same plan as the new contract and for the same rating class, amount, issue age and sex.

CHANGES

You may be able to have this benefit changed to a new contract of life insurance other than in accordance with the requirements for conversion that we state above. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

AL 450 B--96

MISCELLANEOUS

OWNERSHIP

While any insurance is in force after the Insured's death, the insured spouse will be the owner of the contract and will be entitled to any contract benefit and value and the exercise of any right and privilege granted by the contract or by us. But any insurance payable upon the Insured's death will be payable to the beneficiary for that insurance.

BENEFICIARY

The word beneficiary where we use it in this contract without qualification means the beneficiary for insurance payable upon the death of the Insured.

On the contract date, unless we issue the contract with an endorsement that states otherwise, the beneficiary for insurance payable upon the death of the insured spouse will be the Insured if living, otherwise the estate of the insured spouse.

You may change the beneficiary for insurance payable upon the death of the insured spouse. The request must be in a form that meets our needs. It will take effect only when we file it; this will be after you send us the contract, if we require it to issue an endorsement. Then any previous beneficiary's interest in such insurance will end as of the date of the request. It will end then even if the insured spouse is not living when we file the request. Any beneficiary's interest is subject to the rights of any assignee we know of.

When a beneficiary is designated, any relationship shown is to the Insured, unless otherwise stated.

MISSTATEMENT OF AGE OR SEX

If the insured spouse's stated age or sex or both are not correct, we will change each benefit and any amount payable to what the premiums and charges would have bought for the correct age and sex.

The Schedule of Premiums may show that premiums change or stop on a certain date. We may have used that date because the insured spouse would attain a certain age on that date. If we find that the issue age for the insured spouse was wrong, we will correct that date.

SUICIDE EXCLUSION

If the insured spouse, whether sane or insane, dies by suicide within the period which we state in the Suicide Exclusion under Death Benefits provision, we will not pay the amount we describe under Benefit above. Instead, we will pay no more than the sum of the monthly charges deducted for this benefit to the date of death plus the charge for applicable taxes. We will make that payment in one sum.

REINSTATEMENT

If this contract is reinstated, it will not include the insurance that we provide under this benefit on the life of the insured spouse unless you prove to us that the insured spouse is insurable for the benefit.

INCONTESTABILITY

Except for default, we will not contest this benefit after it has been in force during the insured spouse's lifetime for two years from the issue date.

AL 450 B--96

TERMINATION OF BENEFIT

This benefit will end on the earliest of:

1. the end of the last day of the grace period if the contract is in default; it

   will not continue if either extended insurance or reduced paid-up insurance

   takes effect;

2. the end of the last day before the contract date of any other contract to

   which the benefit is converted or changed;

3. the date the contract is surrendered under its Cash Value Option, if it has

   one, or the paid-up insurance, if any, under the benefit is surrendered;

4. the end of its term period; and

5. the date the contract ends for any other reason.

Further, if you ask us in a form that meets our needs, we will cancel the benefit as of the first monthly date on or after we receive your request.  Contract premiums and monthly charges due then and later will be reduced accordingly.

THIS SUPPLEMENTARY BENEFIT RIDER ATTACHED TO THIS CONTRACT ON THE CONTRACT DATE

The Prudential Insurance Company of America,

                                                By /s/ SPECIMEN

                                                   ---------------------

                                                       Secretary

AL 450 B--96

EXHIBIT 26(d)(xliii)

RIDER FOR LEVEL TERM INSURANCE BENEFIT ON LIFE

OF INSURED PREMIUM INCREASES ANNUALLY

This benefit is a part of this contract only if it is listed on a contract data page.

BENEFIT

We will pay an amount under this benefit if we receive due proof that the Insured died: (1) in the term period for the benefit; and (2) while this contract is in force and not in default past the last day of the grace period.  But our payment is subject to all the provisions of this rider and of the rest of this contract.

We show the amount of term insurance under this benefit on a contract data page.  We also show the term period for the benefit there. The term period starts on the contract date. The anniversary at the end of the term period is part of that period.

BENEFIT PREMIUMS AND CHARGES

We show the premiums for this benefit in the Schedule of Premiums in the contract data pages. From each premium payment, we make the deductions shown under Schedule of Deductions from Premium Payments in these pages and the balance is the invested premium amount which is added to the contract fund.  Benefit premiums and monthly charges stop on the anniversary at the end of the term period.

The monthly charge for this benefit is deducted on each monthly date from the contract fund. The amount of that charge is included in the Schedule of Monthly Deductions from the contract fund.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

You may convert this benefit to a new contract of life insurance on the Insured's life. You will not have to prove that the Insured is insurable.

CONDITIONS

You must ask for the conversion in a form that meets our needs, while this contract is in force and not in default past the last day of the grace period, and on or before the fifth contract anniversary. We may require you to send us this contract.

The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the new contract took effect on its contract date and that this benefit ended just before that date.

PREMIUM CREDIT

Upon conversion to a new contract with scheduled premiums, we will allow a credit, as described below, on each premium that is due or scheduled for payment during the first year of the new contract. Upon conversion to a new contract without scheduled premiums, we will allow a credit as of the contract date provided you pay any required minimum initial premium for the new contract.

If this benefit has been in force for at least one year on the contract date of the new contract, we will allow the full credit described below. If this benefit has been in force for less than one year as of that date, the credit will be reduced on a pro-rata basis taking into consideration the portion of a year for which this benefit has then been in force.

The full credit is equal to the premiums for the term insurance being converted that were due, on the premium mode in effect at the time of conversion, during the twelve months preceding the date of the new contract. Extra premiums or charges for extra risks or extra benefits other than a waiver benefit are not considered in determining this credit.

AL 402 B--96

If the new contract has scheduled premiums, we will reduce each premium due or scheduled for payment in the first year of the new contract to consider either the full or reduced credit, as appropriate. If more than one premium is due or scheduled for payment, we will apportion any credit between them. If the new contract does not have scheduled premiums, we will pay either the full or reduced credit, as appropriate, into the new contract as of the contract date provided you pay any required minimum initial premium for the new contract.

CONTRACT DATE

If this contract is not in default, you may choose any contract date for the new contract that is not more than 31 days after nor more than 31 days before the date we receive your request, and not later than the fifth contract anniversary.  If this contract is in default but not past the last day of the grace period, the contract date for the new contract will be the date on which this contract went into default.

CONTRACT SPECIFICATIONS

The new contract will be in the same rating class as this contract. We will set the issue age, premiums and charges for the new contract in accordance with our regular rules in use on its contract date.

Except as we state in the next sentence, the new contract may be any life or endowment policy we regularly issue on its contract date for the same rating class, amount, issue age and sex. It may not be: a single-premium contract; one that insures anyone in addition to the Insured; one that includes or provides for term insurance, other than extended insurance; one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or one with any benefit other than the basic insurance benefit and the waiver benefit we refer to below. A waiver benefit may either waive or pay premiums in the event of the Insured's total disability.

The basic amount of the new contract may be any amount you ask for as long as it is at least $10,000 and not more than the amount of term insurance for this benefit. If the amount you want is smaller than the smallest amount we would regularly issue on the plan you want, we will issue a new contract for as low as $10,000 on the Life Paid Up at Age 85 plan if you ask us to.

If this contract has a waiver benefit in the event of the Insured's total disability, we will include a waiver benefit in the new contract if its premium period runs to at least the Insured's attained age 85 and if we would include a waiver benefit in other contracts like the new one.

We will not deny a waiver benefit that we would have allowed under this contract, and that we would otherwise allow under the new contract, just because total disability started before the contract date of the new contract. Any premium to be waived or paid for total disability under the new contract must be on the monthly mode unless we agree otherwise. We will not waive or pay any premium under the new contract unless it has a waiver benefit, even if we have waived premiums under this contract due to the Insured's total disability.

Any waiver benefit in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In any of these paragraphs, when we refer to other contracts, we mean contracts we would regularly issue on the same plan as the new contract and for the same rating class, amount, issue age and sex.

AL 402 B--96

CHANGES

You may be able to have this benefit changed to a new contract of life insurance other than in accordance with the requirements for conversion that we state above. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

                             TERMINATION OF BENEFIT

This benefit will end on the earliest of:

1.   The end of its term period;

2.   the end of the last day of the grace period if the contract is in default;

     it will not continue if either extended insurance or reduced paid-up

     insurance takes effect;

3.   the end of the last day before the contract date of any other contract to

     which the benefit is converted or changed;

4.   the date the contract is surrendered under its Cash Value Option; and

5.   the date the contract ends for any other reason.

Further, if you ask us in a form that meets our needs, we will cancel the benefit as of the first monthly date on or after the date we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

THIS SUPPLEMENTARY BENEFIT RIDER ATTACHED TO THIS CONTRACT ON THE CONTRACT DATE

The Prudential Insurance Company of America.

                                               By /s/ SPECIMEN

                                                  --------------------------

                                                         Secretary

 AL 402 B--96

EXHIBIT 26(d)(xliv)

RIDER FOR TERM INSURANCE BENEFIT ON

LIFE OF INSURED

This benefit is a part of this contract only if it is listed on a contract data page.

BENEFIT

We will pay an amount under this benefit if we receive due proof that the Insured died: (1) in the term period for the benefit; and(2) while this contract was in force and not in default beyond the last day of the grace period. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

We show the amount of term insurance under this benefit on a contract data page. We also show the term period for the benefit there. The term period starts on the contract date.

BENEFIT PREMIUMS AND CHARGES

We show the premiums for this benefit on a contract data page. From each premium payment, we make the deductions as shown in these pages and the balance is the invested premium amount which is added to the Contract Fund.

The monthly charge for this benefit is deducted on each monthly date from the Contract Fund. The amount of that charge is also shown on a contract data page.

Benefit premium and monthly charges stop on the contract anniversary at the end of the term period for this benefit.

TERMINATION OF BENEFIT

This benefit will end on the earliest of:

1. the end of its term period;

2. the end of the last day of the grace period if the contract is in default,it

   will not continue if either extended insurance or reduced paid-up insurance

   takes effect;

3. the date the contract is surrendered under its Cash Value Option, if ithas

   one; and

4. the date the contract ends for any other reason.

Further, if you ask us in the premium period in a form that meets our needs, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

THIS SUPPLEMENTARY BENEFIT RIDER ATTACHED TO THIS CONTRACTON THE CONTRACT DATE

The Prudential Insurance Company of America,

                                                By /s/ SPECIMEN

                                                   -------------------

                                                       Secretary

AL 401 B--96

EXHIBIT 26(d)(xlv)

RIDER FOR TERM INSURANCE BENEFIT ON

LIFE OF INSURED

This benefit is a part of this contract only if it is listed on a contract date page.

BENEFIT

We will pay an amount under this benefit if we receive due proof that the Insured died: (1) in the term period for the benefit; and (2) while this contract was in force and not in default beyond the last day of the grace period. But our payment is subject to all the provisions of the benefit and of the rest of this contract.

We show the amount of term insurance under this benefit on a contract data page.  We also show the term period for the benefit there. The term period starts on the contract date.

BENEFIT PREMIUMS AND CHARGES

We show the premiums for this benefit on a contract data page. From each premium payment, we make the deductions as shown in these pages and the balance is the invested premium amount which is added to the Contract Fund.

The monthly charge for this benefit is deducted on each monthly date from the Contract Fund. The amount of that charge is also shown on a contract data page.

Benefit premium and monthly charges stop on the contract anniversary at the end of the term period for this benefit.

CONVERSION TO ANOTHER PLAN OF INSURANCE

RIGHT TO CONVERT

You may convert this benefit to a new contract of life insurance on the Insured's life. You will not have to prove that the Insured is insurable. When we use the phrase new contract in this provision, we mean the contract to which this benefit may be converted.

CONDITIONS

You must ask for the conversion in a form that meets our needs, while this contract is in force, and on or before the fifth contract anniversary. The amount we would have paid under this benefit if the Insured had died just before the contract date of the new contract must be large enough to meet the minimum for the new contract, as we describe under Contract Specifications. We may require you to send us this contract.

The new contract will not take effect unless the premium for it is paid while the Insured is living and within 31 days after its contract date. If the premium is paid as we state, it will be deemed that the new contract took effect on its contract date and that this benefit ended just before that date.

PREMIUM CREDIT

If we receive your request for conversion before the fifth anniversary of this contract, we will allow a credit on each premium that is due or scheduled for payment during the first year of the new contract.

If this contract has been in force for at least one year on the contract date of the new contract, we will allow the full credit described below. If this contract has been in force for less than one year as of that date, the credit will be reduced to consider the portion of a year that this contract has then been in force.

The full credit is equal to the premiums for the term insurance being converted that were due, on the premium mode in effect at the time of conversion, during the twelve months preceding the date of the new contract. Extra premiums or charges for extra risks or extra benefits other than a benefit for waiving premiums are not considered in determining this credit.

We will reduce each premium due or scheduled for payment in the first year of the new contract to consider either the full or reduced credit, as appropriate.

CONTRACT DATE

You may choose any contract date for the new contract that is not more than 61 days after the date of your request, not less than five years before the end of the term period for this benefit, and not more than 31 days prior to the date we receive your request.

AL 400 B--96

CONTRACT SPECIFICATIONS

The new contract will be in the same rating class as this contract. We will set the issue age and the premiums for the new contract in accordance with our regular rules in use on its contract date.

Except as we state in the next sentence, the new contract may be on any life or endowment plan we regularly issue on its contract date for the same rating class, amount, issue age, and sex. It may not be: a single-premium contract; one that insures anyone in addition to the Insured; one that includes or provides for term insurance, other than extended insurance; one with premiums that increase after a stated time, if its first premium is less than 80% of any later premium; or one with any benefit other than the basic insurance benefit and the waiver benefit we refer to below.

The basic amount of the new contract may be any amount you ask for as long as it is at least $10,000 and not more than the amount of term insurance for this benefit. If the amount you want is smaller than the smallest amount we would regularly issue on the plan you want, we will issue a new contract for as low as $10,000 on the Life Paid-Up at 85 plan if you ask us to.

If this contract has a benefit for waiving premiums in the event of disability, we will include a benefit for waiving premiums in the new contract if its premium period runs to at least the Insured's attained age 85 and if we would include a waiver benefit in other contracts like the new one.

We will not deny a benefit for waiving premiums that we would have allowed under this contract, and that we would otherwise allow under the new contract, just because disability started before the contract date of the new contract. But any premium to be waived for disability under the new contract must be at the frequency that was in effect for this contract when the disability started. We will not waive any premium under the new contract unless it has a benefit for waiving premiums in the event of disability, even if we have waived premiums under this contract.

Any benefit for waiving premiums in the new contract will be the same one, with the same provisions, that we put in other contracts like it on its contract date. In any of these paragraphs, when we refer to other contracts, we mean contracts we would regularly issue on the same plan as the new contract and for the same rating class, amount, issue age and sex.

CHANGES

You may be able to have this benefit changed to a new contract of life insurance other than in accordance with the requirements for conversion that we state above. But any change may be made only if we consent, and will be subject to conditions and charges that are then determined.

AL 400 B--96

                             TERMINATION OF BENEFIT

This benefit will end on the earliest of:

1. the end of its term period;

2. the end of the last day of the grace period if the contract is in default; it

   will not continue if either extended insurance or reduced paid-up insurance

   takes effect;

3. the end of the last day before the contract date of any other contract to

   which the benefit is converted or changed;

4. the date the contract is surrendered under its Cash Value Option, if it has

   one; and

5. the date the contract ends for any other reason.

Further, if you ask us in the premium period in a form that meets our needs, we will cancel the benefit as of the first monthly date on or after we receive your request. Contract premiums and monthly charges due then and later will be reduced accordingly.

THIS SUPPLEMENTARY BENEFIT RIDER ATTACHED TO THIS CONTRACT ON THE CONTRACT DATE.

The Prudential Insurance Company of America,

                                               By /s/ SPECIMEN

                                                  -------------------

                                                      Secretary

AL 400 B--96

EXHIBIT 26(d)(xlvi)

ENDORSEMENTS

(Only we can endorse this contract.)

ALTERATION OF TEXT

This endorsement modifies certain provisions of the policy to which it is attached, as follows:

The first paragraph under List Of Investment Options is replaced with the following:

I. THE PRUDENTIAL VARIABLE APPRECIABLE ACCOUNT

This account is registered with the SEC under the Investment Company Act of 1940. Each investment option of this account invests in a specific portfolio of The Prudential Series Fund, Inc., and such other funds as we may specify from time to time. The Prudential Series Fund, Inc. and other funds identified below are registered with the SEC under the Investment Company Act of 1940 as open-end diversified management investment companies. We show below the available investment options and the funds and fund portfolios they invest in.

The Prudential Insurance Company of America.

By /s/ Susan L. Blount SPECIMEN

Secretary

 

EX-99.J OTH MAT CONT

POWER OF ATTORNEY

Know all men by these presents:

That I,     Thomas J. Baltimore, Jr.           , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this   9th day of February, 2010.

  /s/ T.J. Baltimore

Thomas J. Baltimore, Jr.

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     Frederic K. Becker    , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this   9th day of February, 2010.

  /s/ Frederic Becker

Frederic K. Becker

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     Gordon M. Bethune     , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this   4    day of February, 2010.

   /s/ Gordon Bethune

Gordon M. Bethune

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     Gaston Caperton     , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this   9th day of February, 2010.

  /s/ Gaston Caperton

Gaston Caperton

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     Richard J. Carbone           , a Executive Vice President and Chief Financial Officer of The Prudential Insurance Company of America ("Prudential), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this   9th day of February, 2010.

  /s/ R.J. Carbone

Richard J. Carbone

EVP and Chief Financial Officer

POWER OF ATTORNEY

Know all men by these presents:

That I,     Gilbert F. Casellas      , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 9th   day of February, 2010.

 /s/ Gilbert Casellas

Gilbert F. Casellas

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     James G. Cullen      , of a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 9th   day of February, 2010.

 /s/ James G. Cullen

James G. Cullen

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     John T. Fleurant           , a Vice President and Controller of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 11th   day of March, 2010.

  /s/  John T. Fleurant

John T. Fleurant

VP and Controller

POWER OF ATTORNEY

Know all men by these presents:

That I,     William H. Gray, III      , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 9th   day of February, 2010.

  /s/ William H. Gray

William H. Gray, III

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     Mark B. Grier           , Vice Chairman and a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 9th   day of February, 2010.

 /s/ Mark B. Grier

Mark B. Grier

Vice Chairman and Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     Jon F. Hanson         , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 4th   day of February, 2010.

  /s/ Jon F. Hanson

Jon F. Hanson

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     Constance J. Horner         , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 9th   day of February, 2010.

 /s/ Constance J. Horner

Constance J. Horner

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     Karl J. Krapek         , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 9th   day of February, 2010.

 /s/ K. J. Krapek

Karl J. Krapek

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     Christine A. Poon    , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 9th   day of February, 2010.

  /s/ Christine Poon

Christine A. Poon

Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     John R. Strangfeld           , Chairman, Chief Executive Officer, President and a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 9th   day of February, 2010.

  /s/ John Strangfeld

John R. Strangfeld

Chairman, Chief Executive Officer,

President and Director

POWER OF ATTORNEY

Know all men by these presents:

That I,     James A. Unruh           , a member of the Board of Directors of The Prudential Insurance Company of America ("Prudential"), do hereby make, constitute and appoint as my true and lawful attorneys in fact THOMAS C. CASTANO, KENNETH E. PELKER, RICHARD E. BUCKLEY, C. CHRISTOPHER SPRAGUE, JONATHAN SHAIN, and JOHN M. EWING or any of them severally for me and in my name, place and stead to sign, where applicable:  Registration statements on the appropriate forms prescribed by the Securities and Exchange Commission, and any other periodic documents and reports required under the Investment Company Act of 1940, as amended, the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and all amendments thereto executed on behalf of the Prudential Insurance Company of America and filed with the Securities and Exchange Commission for the following:

The Prudential Variable Contract Account-2 (Reg. No. 811-01612) and group variable annuity contracts (Reg. No. 002-28316), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-10 (Reg. No. 811-03421) and group annuity contracts (Reg. No. 002-76580), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-11 (Reg. No. 811-03422) and group annuity contracts (Reg. No. 002-76581), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account-24 (Reg. No. 811-05053) and group annuity contracts (Reg. No. 033-12362), to the extent they represent participating interests in such account;

The Prudential Variable Contract Real Property Account (Reg. No. 033-20083-01) and individual variable life insurance and annuity contracts, to the extent they represent participating interests in such account;

The Prudential Investment Plan Account (Reg. No. 811-01850) and Systematic Investment Plan Contracts (Reg. No. 002-52715), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account (Reg. No. 811-01848) and Variable Annuity Contracts (Reg. No. 002-52714), to the extent they represent participating interests in such account;

The Prudential Annuity Plan Account-2 (Reg. No. 811-01849) and Variable Annuity Contracts (Reg. No. 002-52589 and Reg. No. 002-59232), to the extent they represent participating interests in such account;

The Prudential Individual Variable Contract Account (Reg. No. 811-03622) and Individual Variable Annuity Contracts (Reg. No. 033-25434 and Reg. No. 002-80897), to the extent they represent participating interests in such account;

The Prudential Qualified Individual Variable Contract Account (Reg. No. 811-03625) and Individual Variable Annuity Contracts (Reg. No. 002-81318), to the extent they represent participating interests in such account;

The Prudential Variable Appreciable Account (Reg. No. 811-05466) and Variable Life Insurance Contracts (Reg. No. 033-20000, Reg. No. 033-25372, Reg. No. 333-64957, and Reg. No. 033-61079), to the extent they represent participating interests in such account;

The Prudential Variable Contract Account GI-2 (Reg. No. 811-07545) and Group Variable Life Insurance Contracts (Reg. No. 333-01031 and Reg. No. 333-137572), to the extent they represent participating interests in such account;

The Prudential Discovery Premier Group Variable Contract Account (Reg. No. 811-09799) and group annuity contracts (Reg. No. 333-95637), to the extent they represent participating interests in such account; and

The Prudential Discovery Select Group Variable Contract Account (Reg. No. 811-08091) and group annuity contracts (Reg. No. 333-23271), to the extent they represent participating interests in such account.

IN WITNESS WHEREOF, I have hereunto set my hand this 3rd   day of February, 2010.

 /s/ James A. Unruh

James A. Unruh

Director

EX-99.I ADMIN CONTRT

ASSIGNMENT AND ASSUMPTION AGREEMENT

This Assignment and AssumptionAgreement ("Assignment and Assumption Agreement") dated

October 16, 2009 ("Signing Date") is by and among Regulus Group II LLC ("Assignee"), The Prudential

Insurance Company of America ("Prudential"), and First Tennessee Bank National Association

("Assignor").

WHEREAS, Assignor and Prudential are parties to an Amended and Restated Item Processing

Agreement dated the 1st day of January, 2005, with an execution date as of December 20, 2007 (the

"Processing Agreement"). All capitalizedterms not otherwise defined herein shall havethe meaning

ascribed to them in the Processing Agreement;

WHEREAS, Assignor has informed Prudential that Assignor intends to assign all of its client

contracts relating to remittance processing services provided at Assignor's facility in Louisville,

Kentucky to Assignee (the "Transaction"); and

WHEREAS, prior to Prudential recognizing the Transaction, including its ability to make

payments to Assignee, Prudential requires that Assignor formally assign its rights, obligations and

liabilities under the Processing Agreement to the Assignee and that Assignee formally assume all such

rights, obligations and liabilities under the Processing Agreement.

NOW THERFORE, for a good and valuable consideration given and received, the parties agree

as follows:

1.           Assignee will provide immediate written notice of the effective date of the Transaction

(the "Effective Date") to Prudential.

2.           As of the Effective Date, Assignee hereby ratifies and assumes all of the rights, liabilities

and obligations of Assignor under the ProcessingAgreement.

3.           As of the Effective Date, Assignee shall be substituted for Assignor under all of the terms

and conditions of the Processing Agreement.

4.           As of the Effective Date, Assignor hereby acknowledges and agrees that (a) the

Processing Agreement is valid, in full force and effect and binding upon Assignee in accordance with its

terms; (b) no default or breach byPrudential has occurred as to any material term of the Processing

Agreement; (c) Assignor assigns all rights, obligations and liabilities under the Processing Agreement to

Assignee; and (d) Assignor directs Prudential to make all payments for Services performed after the

Effective Dateto Assignee and, upon such payment, shall relievePrudential of all responsibility to pay

Assignor.

5.           Nothing herein alters or relieves Assignor of its rights or obligations to Prudential prior to

the EffectiveDate or in the event the Transaction does not take place.

6.           Assignee and Prudential agree that on the Effective Date, the Processing Agreement is

amended to change all references inSection 2 of the Processing Agreement to "December 31, 2009" to

"December 31, 2010", all references inSection 2 of the Processing Agreement to "July 1, 2009" to "July

1, 2010", and the reference in Section 2 of the Processing Agreement to "November 1, 2009" to

'November 1, 2010".

7.           Assignee and Prudential agree that on the Effective Date, Section 5.1.5 of the Processing

Agreement is deleted in its entirety and replaced with the following: "5.1.5 Convenience.Prudential may

terminate the Processing Agreement for convenience at any time without penalty upon one hundred twenty

(120) days prior written notice to Regulus Group II LLC; provided that any such notice may not

be delivered before June 1, 2010."

8.           On the Effective Date, and until December 31, 2010, Assignee agrees to waive any fee

increases under the Processing Agreement, notwithstanding the provision in Section 4.1 that provides for

increases in the fees payable by Prudential based upon increases in the Consumer Price Index.

9.           On the Effective Date, and for the remainder of the term of the Processing Agreement,

notwithstanding anything to the contrary in the Processing Agreement and without waiving any rights

under the Processing Agreement, Assignee agrees to (i) maintain the Services at the Performance

Standards using the same information technology processes and systems to provide the Services; and (ii)

not perform any Services from locations outside of the United States without prior approval from

Prudential.

10.           From the Signing Date until November 15,2009, provided that such time period may be

extended by Prudential if Prudential, after using reasonable efforts to complete the diligence referenced

below, requires additional time to complete such diligence, Prudential, will complete the diligence

referenced below. Assignee and Assignor agree to cooperate with and assist Prudential in any due

diligence that Prudential performs, including but not limited to site visits, related to Prudential's

assessment of the Assignee as provider of the Services. Such due diligence shall be conducted during

normal business hours and Assignee and Assignor agree to accommodate. Prudential's reasonable requests

for access to information and facilities; provided however, that neither Assignor nor Assignee shall be

required to divulge to Prudential any confidential information of other customers serviced by Assignor or

Assignee. Each party shall be responsible for its own costs in performing such due diligence

investigation. In the event Prudential notifies Assignor and Assignee on or before November 15, 2009

that it has detected deficiencies in its assessment of Assignee as provider of the Services or in Assignee's

processing sites, as determined in Prudential's sole discretion, Assignee will develop an action plan to

address such deficiencies within an agreed upon mutual timeframe. Assignee shall not be permitted to

relocate performance of the Services from Assignor's Processing Site until such deficiencies have been

corrected in accordance with Assignee's action plan or Prudential has otherwise given its consent to

Assignee for the relocation.

11.           This Assignment and Assumption Agreement shall be governed by and construed in

accordance with the laws of the State of New Jersey without giving effect to its principles or rules of

conflict of laws thereof to the extent such principles or rules would require or permit the application of the

laws of another jurisdiction.

12.           This Assignment and Assumption Agreement may be executed in several counterparts,

each of which shall be deemed to be an original and all of which shall together constitute one and the

same instrument. Except as amended herein, the Processing Agreement shall remain in full force and

effect.

13.           In the event the Effective Date does not occur by December 31, 2009, Prudential may

declare this Assignment and Assumption Agreement null and void as of December 31, 2009, by providing

notice to the other parties.

IN WITNESS WHEREOF, the parties hereto have caused the Assignment and Assumption

Agreement to be executed as of the day and year first above written.

Regulus Group II LLC                                                                           First Tennessee Bank National

Association

By: __________________________                                                                                     By: __________________________

Name: ________________________                                                                                     Name: ________________________

Title: _________________________                                                                                     Title: _________________________

The Prudential Insurance Company of America

By: _/s/________________________

Name: BA Connelly_______________

Title: ___SVP____________________

IN WITNESS WHEREOF, the parties hereto have caused the Assignment and Assumption

Agreement to be executed as of the day and year first above written.

Regulus Group II LLC                                                                           First Tennessee Bank National

Association

By: __/s/________________________                                                                                     By: __________________________

Name: _Kathleen Hamburger________                                                                                     Name: ________________________

Title: _CEO & President___________                                                                                     Title: _________________________

The Prudential Insurance Company of America

By: __________________________

Name: ________________________

Title: _________________________

IN WITNESS WHEREOF, the parties hereto have caused the Assignment and Assumption

Agreement to be executed as of the day and year first above written.

Regulus Group II LLC                                                                           First Tennessee Bank National

Association

By: __________________________                                                                                     By: __/s/________________________

Name: ________________________                                                                                     Name: _John C. Fox_______________

Title: _________________________                                                                                     Title: __EVP_______________________

The Prudential Insurance Company of America

By: __________________________

Name: ________________________

Title: _________________________

EX-99.K LEGAL OPININ

Exhibit 26(k)

The Prudential Insurance Company of America

Prudential Plaza

Newark, New Jersey 07102

Gentlemen:

In my capacity as Vice President and Corporate Counsel, Variable Products, Law Department of The Prudential Insurance Company of America ("Prudential"), I have reviewed the establishment on August 11, 1987 of The Prudential Variable Appreciable Account (the "Account") by the Finance Committee of the Board of Directors of Prudential as a separate account for assets applicable to certain variable life insurance contracts, pursuant to the provisions of Section 17B:28-7 of the Revised Statutes of New Jersey.  I am responsible for oversight of the preparation and review of the Registration Statements on Form N-6, as amended, filed by Prudential with the Securities and Exchange Commission (Registration Number: 33-20000) under the Securities Act of 1933 for the registration of certain variable life insurance contracts issued with respect to the Account.

I am of the following opinion:

1.Prudential is a corporation duly organized under the laws of the State of New Jersey and is a validly existing corporation.

2.The Account has been duly created and is validly existing as a separate account pursuant to the aforesaid provisions of New Jersey law.

3.The portion of the assets held in the Account equal to the reserve and other liabilities for variable benefits under the variable life insurance contracts is not chargeable with liabilities arising out of any other business Prudential may conduct.

4.The variable life insurance contracts are legal and binding obligations of Prudential, in accordance with their terms.

In arriving at the foregoing opinion, I have made such examination of law and examined such records and other documents as I judged to be necessary or appropriate.

I hereby consent to the filing of this opinion as an exhibit to the Registration Statement.

Very truly yours,

  /s/ Thomas C. Castano                       4/13/2010         

Thomas C. Castano                                   Date

EX-99.N OTH OPINIONS

Consent of Independent Registered Public Accounting Firm

We hereby consent to the use in this Registration Statement on Form N-6 (the “Registration Statement”) of our report dated April 1, 2010, relating to the financial statements of The Prudential Variable Appreciable Account, which appears in such Registration Statement. We also consent to the use in this Registration Statement of our report dated April 2, 2010, relating to the consolidated financial statements of The   Prudential Insurance Company of America and its subsidiaries, which appears in such Registration Statement. We also consent to the reference to us under the heading “Experts” in such Registration Statement.

/s/  PricewaterhouseCoopers LLP

New York, New York

April 13, 2010