Prudential offers a range of annuities designed for different retirement income needs. Many of their six product offerings are a modified version of an index-linked annuity, which aims to let owners indirectly benefit from potential gains in stocks and/or bonds, while offering some protection against market losses.
Prudential also offers two fixed annuities, which tie their returns to a steady, fixed interest rate. The returns for fixed annuities might not offer the same upside potential as other varieties, but they let you bypass much of the complexity, restrictions and costs saddling their index-linked and variable counterparts.
The devil is in the details when it comes to annuities, so understanding the risks, fees and growth limitations is key before committing to any financial product.
If you’re considering buying an annuity from Prudential, here’s everything you need to know about what they offer.
What annuities does Prudential offer?
Prudential offers a suite of annuity products, from fixed annuities to variable annuities. Each is designed to cater to different retirement income needs, though some do so in a more straightforward manner than others.
Before buying an annuity, it’s smart to speak with a third-party financial advisor, preferably a fiduciary who’s ethically obligated to work in your best interest. They’ll be able to help you objectively consider all your options without the bias you’d likely encounter from an insurance agent or broker working on commission.
Here is a detailed look at Prudential’s six annuity offerings.
FlexGuard indexed variable annuity
The Prudential FlexGuard is a flexible premium deferred index-linked and variable annuity. If that feels like a mouth full, the ambiguity and jargon doesn’t end there. Indexed annuities are notoriously complex and this one is no exception.
You can allocate your funds between different index strategies and enjoy potential growth tied to market indexes, such as the S&P 500. It also offers some downside protection from market downturns via buffers. That’s the short of it: For all the nuts and bolts of participation rates, caps and buffers, you’ll need to consult the prospectus.
Key features and who it’s best for
- Different index strategies
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Offers a range of strategies with customizable buffers and growth potential.
- Downside protection
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Buffers limit initial index losses within a certain range, with a minimum 5 percent buffer. This prevents those losses from directly impacting your account value. However, losses exceeding the buffer still reduce your account value.
- Fees
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Annual fees (up to 1.3 percent), surrender charges (up to 8 percent within the first six years) and potential investment expenses (up to 1.26 percent).
- Who it’s best for
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People nearing or in retirement who are looking for some growth potential and downside protection.
PruSecure fixed index annuity
The PruSecure annuity offers growth potential while also offering a modest guaranteed fixed rate. The fixed-rate strategy is guaranteed for one year and index-linked strategies offer terms of one, three or five years. You allocate percentages of your initial investment to both strategies.
Caps or participation rates limit your potential gains and a floor protects against losses. For example, if your cap is 4 percent and the market goes up 3 percent, you get the entire 3 percent. If the S&P 500 runs up 20 percent, like it did in 2023 and 2024? You still only get 4 percent of the growth credited to your account.
Participation rates work in a similar way. Your returns are limited to a certain percentage of the market’s increase. At a 30 percent participation rate, you would see 6 percent growth if the market went up 20 percent and 0.9 percent if it rose 3 percent.
On the flip side, if the S&P 500 drops 20 percent in one year, like in 2022, you lose nothing, so your principal is protected by the floor.
Key features and who it’s best for
- Investment strategies
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Offers fixed-rate (one-year guaranteed) and index-linked strategies with one-, three- or five-year terms.
- Free withdrawal provision
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Up to a 10 percent free withdrawal each year.
- Fixed rate
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You’ll earn a 3 percent rate for the fixed strategy for a one-year period. After that, the rate can drop. However, the disclosure notes that during the surrender charge period, the rate “will always be at least 1 percent.”
- Surrender charges
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Five- or seven-year surrender charge period with a fee of up to 9 percent, decreasing annually. That’s a bit higher than the industry standard of 7 percent, and higher than Prudential’s other offerings.
- Minimum investment
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$10,000.
- Death benefit
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Pays the greater of the account value or the minimum guaranteed surrender value to beneficiaries.
- Who it’s best for
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Risk-averse people seeking modest long-term tax-deferred growth with downside protection.
Premier investment variable annuity
This variable annuity offers tax-deferred growth — like all annuities — along with a range of subaccount investment options, including managed and customized portfolios. However, its fee structure is dense and complex, and it carries the risk of loss with no floor to protect against market losses.
The “pro-growth” fee structure means fees fluctuate with your account value, potentially increasing if your balance declines, meaning you pay more if you have a smaller account. Payouts from this deferred annuity can last your lifetime or a period certain, depending on what you choose.
Key features and who it’s best for
- Tax deferral
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Delays income tax on growth until withdrawal.
- Investment flexibility
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Offers managed and customized subaccount portfolios.
- Death benefit
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It offers a standard death benefit that pays out the account value after you die. An optional “Return of Purchase Payments Death Benefit” is also available which ensures your beneficiary receives your initial investment back, but this rider tacks on an additional fee.
- Surrender charges
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Up to 7 percent during the first seven years, which is pretty standard for most annuities.
- Complex charges
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Multiple layers of fees apply to this annuity. Annual fees range from 0.95 percent to 1.39 percent for the base contract, plus 0.29 percent to 1.43 percent for investment options. Optional riders come with additional fees.
- Who it’s best for
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People seeking long-term, tax-deferred growth who are comfortable exposing their initial investment to market risk.
WealthGuard multi-year guaranteed annuity
WealthGuard is a fixed annuity offering guaranteed growth over three-, five- or seven-year terms, protecting your principal from market losses. A key feature is the 10 percent annual free withdrawal, but exceeding this triggers surrender charges and a market value adjustment.
After the initial term, you can renew for one year without penalties or choose a new multi-year term. Renewal rates can fluctuate.
Key features and who it’s best for
- Guaranteed growth
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Fixed returns for three, five or seven years.
- Minimum purchase
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$25,000.
- No contract fees
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There are no annual contract or administrative fees, unlike the variable annuity option mentioned earlier. However, if you withdraw more than 10 percent during the surrender period, charges may apply.
- Rates
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The rate you earn depends on the length of your term and the size of your initial investment, with longer terms and larger deposits fetching higher rates. In January 2025, rates ranged from 4.6 percent to 5 percent for accounts with more than $100,000 and about 4 percent for accounts with less than $100,000. Renewal rates will likely be lower.
- Annual free withdrawal
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You can withdraw 10 percent of your funds each year without penalty.
- Surrender charges
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Penalties apply for withdrawals exceeding 10 percent during the initial term, starting at 7 percent and decreasing over time.
- Who it’s best for
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People seeking safe, predictable growth with no participation in the market.
FlexGuard Income indexed variable annuity
Prudential’s FlexGuard Income annuity is even more complex than the FlexGuard option mentioned earlier. It’s a fee-heavy indexed variable annuity with multiple crediting strategies available, including capped and uncapped growth options, with buffers that aim to limit losses.
Key features and who it’s best for
- Lifetime income
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Provides a guaranteed income stream, with the potential for increased income based on index performance.
- Minimum purchase payment
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$25,000.
- Surrender charges
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Up to 7 percent for withdrawals within the first six years.
- Annual fees
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Base contract fees range from 1.20 percent to 1.45 percent plus investment expenses. However, the prospectus notes that the lowest annual cost for a $100,000 initial premium payment is $3,416, which works out to a 3.4 percent annual fee.
- Who it’s best for
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People with a long-term investment horizon who are willing to accept complex investment strategies and market risks.
Prudential Fixed Annuity with Daily Advantage Income Benefit
The Prudential Fixed Annuity with Daily Advantage Income Benefit offers guaranteed lifetime income and daily growth of future income that’s shielded from market risk. It’s a modified single premium deferred fixed annuity with a seven-year initial interest rate period that renews annually after that.
Key features and who it’s best for
- Guaranteed daily growth
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Income amount increases daily until withdrawals begin.
- Lifetime income but at a cost
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Provides a steady, predictable income stream for life. However the income benefit carries a 0.95 percent annual fee and you can’t cancel the income benefit until you’re five years into the contract.
- Minimum purchase
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$25,000.
- Surrender charges
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Up to 7 percent within the first seven years, decreasing each year.
- Free withdrawals
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You can withdraw up to 10 percent of the account value penalty-free annually.
- Death benefit
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Beneficiaries receive the greater of account value, income reserve or minimum guaranteed surrender value.
- Who it’s best for
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People seeking guaranteed retirement income with no market exposure who are willing to commit to a long-term contract.
What is Prudential Financial?
Prudential Financial is a large financial services provider established in 1875. It offers a wide array of financial products, including life insurance, annuities and mutual funds.
The company’s presence in the annuity market is significant: In the third quarter of 2024, Prudential ranked among the top 20 annuity issuers, with billions in annuity sales year to date, according to LIMRA, an insurance trade association.
Prudential holds top-tier ratings from independent agencies, including an A+ from AM Best in January 2025, which reflects its strong financial stability and ability to meet claims. This matters because an annuity’s guaranteed income is only as reliable as the insurer behind it.
Prudential annuities pros and cons
Pros
- Diverse annuity options: Prudential offers a variety of annuities — including fixed, indexed and variable — to fit different retirement income needs and risk tolerances.
- Strong financial stability: Prudential holds top-tier ratings from agencies like AM Best, reinforcing its reliability to make good on future annuity payouts.
- Downside protection: Many Prudential products feature buffers and floors to help limit losses from market downturns.
- Flexible withdrawal features: Most Prudential annuities allow penalty-free withdrawals up to 10 percent annually.
Cons
- High and complicated fees: Several annuities carry multiple layers of fees, including annual contract charges, investment option expenses and optional rider costs.
- Surrender charges: All Prudential annuities have surrender charge periods, which is standard fare for most annuities, regardless of the insurer. Still, it should be noted that Prudential’s PruSecure fixed index annuity carries a 9 percent surrender charge at the beginning of the contract, which is a bit higher than the industry standard of about 7 percent.
- Complexity: Indexed variable annuities, in particular, have intricate structures that make it difficult to understand your upside potential and protection from market losses.
Bottom line
Prudential offers a range of annuity options, but many of them come with complex fee structures and restrictions. These products might suit conservative retirees looking for income security, but if you’re seeking higher returns or more flexibility, carefully weigh your options. Consulting with a financial advisor is essential before signing any annuity contract to ensure it truly meets your financial needs.
Editorial Disclaimer: All investors are advised to conduct their own independent research into investment strategies before making an investment decision. In addition, investors are advised that past investment product performance is no guarantee of future price appreciation.
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