What will we be going over in this annuity review about the Manhattan Life Preferred Choice Multi-Year Guaranteed Annuity (MYGA)?
In this review, we will be discussing the following details about the Preferred Choice MYGA Annuity from Manhattan Life:
- Product type
- Current rates
- Realistic short and long-term expectations
- Where the annuity works best
- Where the annuity may not work well
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you’re thinking about buying an annuity because you want to be sure that you have a guaranteed stream of income in retirement, while at the same time keeping your money safe from market volatility, then a multi-year guaranteed annuity like the Manhattan Life Preferred Choice annuity could be a good option for you.
That is because, with a MYGA annuity, you can lock in a set interest rate for a certain period of time – in this case for a number of different guarantee periods – knowing that your money will grow no matter what occurs in the overall interest rate environment.
Multi-year guarantee, or MYGA, annuities can also offer you a lifetime income option (in some cases for two individuals, such as spouses or partners) so that you can stop worrying about running out of income in retirement.
But hold on a second!
Before you run out and commit to this annuity – or for that matter, before you make a commitment to purchasing any annuity – it is recommended that you first have a good understanding of how the annuity works, and how it may (or how it may not) work for you and your specific financial goals and needs.
MYGA annuities can have a long list of “rules” to abide by. For instance, you may be able to re-invest your proceeds at another set rate, once your initial time frame has elapsed. But that may or may not be the best idea, based on your specific needs.
This can make it even more essential that you read over all of the fine print before you commit what could be a large percentage of your savings to this annuity. Otherwise, it could cost you a substantial amount to get out of it down the road.
That’s where the Annuity Gator comes in!
Annuity and Retirement Income Planning Information You Can Trust
If you have never visited our website, then please allow us to officially welcome you here to AnnuityGator.com. We make up a team of experienced annuity specialists who focus on offering very comprehensive – and unbiased – annuity reviews.
We have been doing this for quite a few years now – longer than our competitors. And, because of the in-depth reviews that we provide, we have become a highly trusted source of annuity information online.
There are hundreds of annuities – fixed, indexed, and variable – that can be found in our comprehensive Annuity Review database, which is accessible from our website.
Over the past decade or so, however, there have been a number of “copycat” websites that have popped up on the Internet. While some of these can give you information about annuities, what you are likely to find is that they are oftentimes just simply reiterating what our information already shows.
If you have been researching annuities on the Internet lately, it is likely that you also have run across some conflicting information regarding these financial vehicles. That really is not surprising, though, as there are many, many annuities out there in the marketplace, and just about everyone seems to have a differing opinion about them.
It could also be that you’ve recently attended an annuity seminar. Here, the presenter may have given you more in-depth details about the Manhattan Life Preferred Choice annuity, or some other similar product. In fact, it may even have been your attendance at that seminar that led you here to our site in search of additional information.
When you’ve been looking at annuities online, it is also possible that you landed on some other annuity marketing websites that focus on luring visitors in for the purpose of obtaining their contact details. These sites will oftentimes do so by making some fairly bold claims about the annuities they offer, such as:
- High Annuity Income Payouts
- Guaranteed Income for Life
- Top-Rated Annuity Carriers
- Low Fees
Does this look familiar?
But, as nice as these claims might sound, it is really important that you verify their validity first before you decide to move forward with a long-term financial commitment. Otherwise, it could end up costing you.
That being said, if you are looking for more in-depth information about the Manhattan Life Preferred Choice annuity then you are definitely in the right place. In fact, dare we say that our website is the only place online where you can get all of the key details about this annuity so that you can make a well-informed buying (or non-buying) decision.
It is important to note here, however, that in addition to providing you with all of the nice keen benefits of this product, we are also going to lay out the product’s drawbacks. This is so that you will be in a better position to make a truly well-informed decision as to whether or not this is really the annuity for you.
We do want to be very clear in that we believe annuities are beneficial products – and they can be a great addition to a portfolio for some people – but only as long as they fit in with your overall financial objectives. This annuity review is here to provide you with what you need to know.
So, with that being said, let’s go ahead and get started!
The Manhattan Life Preferred Choice MYGA Annuity at a Glance
|Product Name||Preferred Choice Annuity|
|Type of Product||Multi-Year Guarantee Annuity (MYGA)|
|A.M. Best Rating||B+ (Good)|
|Phone Number||(800) 247-2045|
Opening Thoughts on the Manhattan Life Preferred Choice MYGA Annuity
Originally founded in 1850, Manhattan Life Insurance Company is one of the oldest continuously operating companies in the world. Today, Manhattan Life consists of a group of four operating life and health insurance companies, including:
- Manhattan Assurance
- Family Life
- Western United Life
- Manhattan Life
The Manhattan Life subsidiary offers Medicare Supplement insurance, life & supplemental health insurance, and fixed-rate annuities in the United States and Puerto Rico. Western United Life has been marketing and distributing a competitive line of short to mid-term fixed-rate and immediate annuity products, as well as Medicare Supplement coverage. (The Preferred Choice annuity offered through Manhattan Life is underwritten by Western United Life).
Today, with so many companies doing away with employer-sponsored pension plans, retirees – as well as those who are approaching retirement – need to find alternate ways of securing a long-term income stream. One solution is the multi-year guarantee annuity, or MYGA.
This type of annuity will provide a set rate of return – usually for a pre-set period of time. It can also offer an income stream in return for one or more premium payments. These contributions can be made with personal savings, or by depositing funds from a 401(k) and/or IRA (Individual Retirement Account).
But just like any other financial product, not all annuities are the same. So, it is highly recommended that you take a good, close look at this – or any other annuity that you are considering – before you commit to it.
Before we get into the in-depth details, we have some legal disclosures to present…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Neither Manhattan Life nor Western United Life has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners.
Want to know more about how annuities really work? Click here to receive our updated annuity report.
How Manhattan Life Describes the Preferred Choice Annuity
On its website, Manhattan Life describes the Preferred Choice annuity as a multi-year guarantee annuity or MYGA.
There are several interest rate guarantee period options, which include:
- 3 years
- 5 years
- 6 years
- 7 years
Your interest rate will be locked in for the time period that is selected – regardless of what happens in the stock market, with the Federal funds rates, or even in the economy overall. As with other annuities, the funds that are in the account are allowed to grow and compound on a tax-deferred basis. This means that there is no tax due on the gains until the money is withdrawn. It will be taxed at your then-current income tax rate in the future.
The annuity may be converted to an income stream, where payouts can come on a regular basis for a set period of time, or for the remainder of your lifetime – regardless of how long that may be.
If the annuitant (i.e. the recipient of the income from the annuity) dies before receiving back all of their contributions, a death benefit will be paid out to one or more beneficiaries. The amount of this benefit will be the annuity’s contract value, minus any previous withdrawals.
While there is no income tax due on a life insurance policy’s death benefit, the same is not true with regard to the death benefit paid on an annuity. So, the beneficiary could be subject to taxation when he or she receives the funds. (Note that the funds may be paid out to the beneficiary either as one single lump sum, or alternatively, as a series of payments).
How a Financial Advisor Might “Pitch” the Manhattan Life Preferred Choice Product
With interest rates in the U.S. still at historical lows, it can be quite difficult to secure a good return on your money without having to incur more risk as a “tradeoff.” The Preferred Choice MYGA annuity from Manhattan Life allows you to lock in a competitive interest rate, and you will receive that rate for the time selected – even if rates drop lower in the economy.
Plus, when the time comes for you to turn on the income stream, you could choose an option that ensures you won’t run out of money in the future, no matter how long you may need it to keep flowing in.
The guarantees associated with a multi-year guarantee annuity are likely what an insurance or financial advisor would focus on when presenting this product to his or her clients. But it’s really important to be careful here, as a jack of all trades is oftentimes a master of none.
First, if you want to withdraw more than 15% of the annuity’s contract value in the first few years of owning the contract, you will be hit with a surrender fee. Plus, even though it is nice to have a set, known rate of interest locked in on your money, what happens if the interest rates in the economy go up (which they are likely to do in the future) – but you’re locked in at a low rate?
This is what is known as “opportunity cost” – losing out on a better opportunity because you are already locked into something else. To take a look at the Manhattan Life website, which includes information about the Preferred Choice annuity, you can go here.
Are there Fees Incurred on the Preferred Choice Annuity from Manhattan Life?
Even though you won’t have to pay an up-front agent or broker commission to the person who sells you the Preferred Choice annuity, it is possible that fees may be incurred for other reasons.
For instance, by withdrawing more than 15% of the value of the contract during any year of the surrender charge period, you will have to pay an early withdrawal fee. The length of the surrender period corresponds with the length of the interest rate guarantee period.
So, if you choose the 3-year rate guarantee, then the surrender charge period will last for three years. If you choose the 7-year rate guarantee period, your surrender charge will last for a full seven years, and so on.
On top of that, you could owe taxes on any gains that you withdraw. Plus, if you make such withdrawals before you have turned age 59 ½, then an additional 10% IRS early withdrawal penalty could also be due.
With that in mind, it is absolutely essential that you consider an annuity a long-term financial commitment, and that you only use money that you don’t anticipate needing in the near future for any financial emergency and/or other similar obligations.
The Annuity Gator’s End Take on the Manhattan Life Preferred Choice MYGA Annuity
Where this annuity is best used:
Although the Manhattan Life Preferred Choice annuity may not be the ideal option for everyone, it could be a good addition to your portfolio if you are seeking the following features:
- The option to lock in a competitive interest rate for a specified period of time
- Protection of your principal – even in a downward moving market
- Guaranteed income in retirement (for you and another individual, if you choose)
Where this annuity might not be a good fit:
The Preferred Choice annuity may not, however, work very well in all situations. This is especially the case if you:
- Want or need to access more than just 15% of your money during the surrender period
- Do not plan to use the lifetime income feature on the annuity
When you’re thinking over the purchase of an annuity, it is absolutely essential that you consider a number of factors and financial probabilities for your specific situation and goals – for both the short and the long-term time horizon.
These should typically include the annuity’s options for growing your money, as well as the way that it keeps your principal safe. And, because many people purchase annuities for the purpose of receiving long-term income, this too is extremely important.
If you’re still thinking about purchasing the Preferred Choice MYGA annuity from Manhattan Life, you can rest assured that your money will be safe, no matter what happens in the market. You can also count on a lifetime income in the future.
But, even with all of the alluring benefits that this annuity can provide you with, there could still quite honestly be a better option out there for you. With that in mind, it can be extremely beneficial to have this annuity tested, based on your specific parameters.
Have Any Additional Questions? Did You Notice Any Mistakes on this Annuity Review?
We know that this annuity review went a bit on the long side – and because of that, we would like to thank you for seeing it through here to the end. That being said, though, we would much rather provide you with “too much” information about these annuity products than not provide you with enough.
Therefore, if you felt that this annuity review was helpful to you, please do feel free to share it and forward it to anyone else that you think might also benefit from it. Likewise, if this review posed even more questions about the Preferred Choice annuity, please let us know that too.
Are there any other annuities that you would like to have us review and post in our Annuity Review Database?
If so, send ‘em on over to us!
There is a long list of annuity products out there in the marketplace today. So, if there is one (or more than one) that you would like to have us review, then please let us know the name, or names, of the annuity, and our annuity “geeks” will get to it ASAP.
Thank you for visiting our AnnuityGator.com site and be sure to check back often for new and updated information regarding all things annuity.
The Annuity Gator
P.S. If you would like to read more of our Manhattan Life annuity reviews here is a link to check out:
- Independent Review of the Manhattan Life Future Select MYGA Annuity
- Independent Review of the Manhattan Life Discovery MYGA Annuity
- Independent Review of the Manhattan Life Premium Preferred Annuity