New Optional Benefit From American Skandia Seeks to Give Investors Added 'Peace of Mind' — Enhanced Beneficiary Protection Offers 50% of Contract Gain —

Business Wire, Feb 23, 2001

Business Editors

SHELTON, Conn.--(BUSINESS WIRE)--Feb. 23, 2001

In response to a growing market call for products that offer investors increased beneficiary protection, American Skandia Life Assurance Corp. has introduced Enhanced Beneficiary Protection (EBP), an optional variable annuity death benefit designed to help offset expenses beneficiaries may incur, such as federal and state taxes due on the death benefit amount.

With EBP, beneficiaries will receive the contract's standard death benefit plus an additional 50% of the lesser of:

-- 100% of premiums received by American Skandia at least 12 months prior to
the date of death, or

-- any growth in the contract's account value

The charge for this added benefit, available to annuity buyers less than 76 years old, is only 0.25% of the contract anniversary value (0.35% for AS Pro contracts). The EBP option will be available on new variable annuity contracts(a) as of 2/22/01 and must be selected when the annuity contract is purchased.

"With American Skandia's new optional EBP death benefit, investors can help offset the federal and state taxes beneficiaries face when they receive an annuity death benefit. This new benefit provides added peace of mind to annuity buyers concerned with offsetting some of the taxes their beneficiaries may face some day," said Jac Herschler, American Skandia's Vice President of Variable Annuity Marketing.

"This type of family protection benefit was introduced to the variable annuity marketplace within the last year. Some companies that offer this kind of optional protection provide only 40% of gain benefit and decrease the protection if the contract is purchased at age 70 or more. American Skandia's EBP requires that the contract owner buy it by age 75, and there is no reduction in coverage for buyers younger than that age. We see it as another option that provides a 'safety cushion' to investors who want to help offset the tax impact for their beneficiaries," Herschler added.

(a) EBP may not be available in all states, or as an option on all

American Skandia variable annuities. The investment return and

principal value of a variable annuity will fluctuate with changes

in market conditions.

Variable annuities, variable life insurance and qualified plans are issued by American Skandia Life Assurance Corp. and distributed by American Skandia Marketing, Incorporated. Both companies are located at One Corporate Drive, Shelton, Connecticut 06484.

Call 1-800-SKANDIA for a prospectus containing more complete information on charges, expenses and tax consequences. It should be read carefully before you invest or send money. Information about the company and its products can also be found on the company Web site at www.americanskandia.com.