American Skandia's New Innovation Enhances Variable Annuity Appeal for Rollovers From 401 and IRA Accounts - K

Business Wire, Sept 10, 2001

Business Editors

SHELTON, Conn.--(BUSINESS WIRE)--Sept. 10, 2001

-- `Plus40(TM)' Could Cover Entire Beneficiary Tax Liability --

American Skandia Life Assurance Corporation has announced the introduction of Plus40(TM), an optional guaranteed issue term life insurance rider issued in conjunction with its deferred variable annuities.

American Skandia believes that the Plus40 rider, which is funded with after-tax dollars, will be a particularly popular way to offset income taxes due at the death of the annuitant on rollovers from 401(k)s, 403(b) Tax-Sheltered Annuities, or IRAs. It is designed to offer an option to the tens of millions of Americans who will be retiring with tax-deferred retirement plans and are concerned about the income taxes their beneficiaries may owe.

Available as an option on newly-issued American Skandia variable annuities beginning Sept. 17, the Plus40 rider:

- Can pay beneficiaries a federal income tax-free amount equal to 40% of the
annuity's Account Value at the owner's death, in addition to the annuity
contract death benefit

- Is available to new purchasers of the company's variable annuities between
the ages of 40 and 75, and coverage may continue through age 95

- Does not require purchasers to answer any medical questions or undergo
examinations - purchasers of Plus40, ages 40-75, cannot be turned down

- Includes a charge that is based on a percentage of Account Value.

Patricia J. Abram, Chief Marketing Officer, said: "Tax-deferred variable annuities are a great way to save for retirement and defer federal income taxes until you're in a lower tax bracket. They're the only product that can provide the security of guaranteed income payments for life. But if you die before you deplete your deferred annuity savings, your beneficiaries will owe income taxes on the earnings in the account. Unlike earlier industry enhancements, Plus40 covers 40% of the total annuity Account Value, not just growth. The difference is dramatic."

Jac Herschler, Vice President of Variable Annuity Marketing, stated: "Plus40 could re-ignite growth in the variable annuity industry by tapping into a huge new opportunity with rollovers from tax-deferred retirement plans. Plus40 will be particularly attractive to buyers with money from 401(k)s, 403(b) Tax-Sheltered Annuities, or IRAs who are looking for a way to protect their legacies. If you die before using up your qualified savings, Plus40 provides an important supplemental benefit to beneficiaries that would not be provided with typical tax-deferred accounts."

"Long-time annuity investors may have the same tax concerns for their beneficiaries if they have substantial gains in their current annuity contracts," added Herschler. "An American Skandia variable annuity with the Plus40 rider might be a suitable choice for investors with these needs."

Today, there are several trillion dollars in tax-deferred retirement investments. Most of that money will ultimately be converted into retirement income as both savers and investors reach retirement age. Plus40 is another example of how American Skandia builds products that can drive Investment Professionals' success through innovations.

Variable annuities and variable life insurance are issued by American Skandia Life Assurance Corporation and distributed by American Skandia Marketing, Incorporated. American Skandia Advisor Funds are offered 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 at www.americanskandia.com.