What will we be covering in this annuity review?
In this review of the New York Life Insurance Company’s Flex Premium fixed annuity, we will be going over the following topics:
- Type of annuity
- How the annuity works
- Pros and cons
- Who may (and may not) be a good candidate for this annuity
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you are thinking about purchasing a fixed annuity because of the protection it can provide, as well as the guaranteed lifetime income in retirement, then the New York Life Insurance Company’s Flex Premium fixed annuity could be right for you.
But before you make a long-term commitment to this – or to any – annuity, you really need to know how the product works, as well as what it will and won’t do, so that you’ll know what to anticipate.
Throughout the past several years, fixed annuities have risen in popularity. This is due in large part to the potential for substantial loss in the market – particularly after the 2008 recession, and more recently, the 2020 COVID-19 virus (and corresponding stock market drop).
Because they want to outdo their competition, many insurance companies have come out with “new and improved” fixed annuities – some that offer a long list of added “bells and whistles” so as to cover every financial need you’ll ever have!
Ok, well maybe not every financial need…
But because of all the “fine print” you’ll find on these products, they can be even more confusing than they already were! This is the case for consumers AND insurance and financial advisors.
With that in mind, unless the insurance or financial advisor that you work with really knows the ins and outs of annuities, it may be necessary for you to do some additional research, as annuities can typically require a substantial amount of your overall savings.
This is where we come in.
Annuity and Retirement Income Planning Information That You Can Trust
If this is the first time that you have visited our website, please allow us to personally welcome you here to AnnuityGator.com. We are a team of annuity experts who are highly focused on offering in-depth, yet non-biased, annuity reviews. We have been doing this for quite some time now – much longer than our competitors – and because of that, we have come to be a trusted source of annuity information.
When looking for details about annuities via the Internet, it’s possible that you have run across a lot of very conflicting opinions about them. This, however, is not really all that surprising. That is because there are many different annuity products available, and many people – both consumers and financial advisors alike – will often have differing thoughts.
But while there are many very good websites out there online that are keyed in on offering annuity products and information, there are some that will attempt to “lure” visitors in by making some pretty bold claims, such as the following:
- Lowest fees
- Highest income payouts
- Guaranteed lifetime income
- Top-rated companies
Although these highlights might sound very enticing, it makes it all that much more important to know whether or not these claims are actually true. If you have come to our website in search of more details about the New York Life Flex Premium annuity, you are definitely in the right place.
Here you will not only find the nice, rosy details about everything good that this annuity offers, but also the factors that may be considered as drawbacks. That is because we feel that knowing the entire picture is really the only way to make a well-informed decision as to whether or not the annuity will be right for you.
If you’ve done any amount of investing in the past, you may notice that insurance and financial advisors will often tend to happily give you all of a product’s benefits, yet will simply gloss over the disadvantages – if they even discuss them at all.
Just to be clear here, we want to state for the record that we feel annuities can provide investors with some very nice benefits. However, this is only the case if the product fits in with your specific short- and long-term goals.
This annuity review was created with the intent of assisting you with better understanding the “fine print” that relates to the New York Life Flex Premium fixed annuity so that you can make a well-informed decision about whether or not it is a good option for you.
So, if you are ready to begin, let’s dive in!
New York Life Flex Premium Fixed Annuity at a Glance
|Product Name||Flex Premium|
|Issuer||New York Life Insurance Company|
|Type of Product||Fixed Annuity|
|S&P Rating||AA+ (Very Strong)|
|Phone Number||(800) CALLNYL|
Opening Thoughts on the New York Life Flex Premium Annuity
For 175 years, New York Life Insurance Company has been helping individuals, families, and business owners build and protect wealth. Today, the company is the Number One largest mutual insurance company in the United States, ending the 2019 years with more than $27 billion in surplus and asset valuation reserve.
New York Life is known for paying dividends to its policyholders (although dividends are never guaranteed). In just 2019 alone, the company paid roughly $11.5 billion in both dividends and policy owner benefits. That same year, New York Life brought in more than $13 billion in just annuity sales alone.
Due in large part to the company’s strong and stable financial footing, it has received among the highest ratings, including a(n):
- A++ from A.M. Best
- AAA from Fitch Ratings
- Aaa from Moody’s Investor Services
- AA+ from Standard & Poor’s
The company is also rated with an A+ from the Better Business Bureau, and it has a score of 770 from J.D. Power & Associates.
That being said, it can make a lot of sense to purchase an annuity from a highly rated insurer, as these products are not FDIC insured, but rather back their guarantees on the strength of the offering insurance company.
Fixed annuities are typically known for the guarantees they provide, including protection of principal, a set interest rate, and a regular income stream – including a lifetime option. Yet, while this may sound like a win-win-win scenario, the truth is that whenever something sounds too good to be true, it very well may be. In any case, it can be beneficial to at least check the information further, in order to ensure that you know all of the advantages, as well as any potential drawbacks.
Before we get into the gritty details, here are some necessary legal disclosures…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. New York 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. Before purchasing any type of insurance and/or investment product, it is important that you do your own due diligence, and that you consult a properly licensed professional if you should have any specific questions that relate to your individual situation. All of the names, marks, and materials that were used for this annuity review are the property of their respective owners.
For more information on how to compare annuities in order to determine which one may be the best for you and your financial circumstances, click here to obtain our free annuity report.
How New York Life Describes the Flex Premium Annuity
According to New York Life Insurance Company, the Flex Premium fixed annuity described as a fixed deferred annuity that gives you the flexibility to invest multiple premiums.
This annuity offers a one-year interest rate guarantee, with the interest rate applied to each payment until the end of its period. So, there is a new renewal rate on each policy anniversary that is based on the annuity’s accumulation value. While this may be more or less than the previous rate, it will never be less than the guaranteed minimum interest rate that is stated in the policy.
Just like other types of annuities, the growth that takes place in the account is tax-deferred. So, there is no need to pay any taxes on the gains until the time of withdrawal – which could be many years in the future.
The Flex Premium annuity from New York Life has a few added features, including a(n):
- Death Benefit
- Living Needs Benefit/Unemployment Rider
- Home Health Care Rider
So, you may be allowed to access funds from the annuity penalty-free in various situations.
To take a closer look at the Fact Sheet for the Flexible Premium Fixed Annuity from New York Life, go here.
How an Insurance or Financial Advisor Might “Pitch” this Annuity
Because the Flex Premium from New York Life Insurance Company is a fixed annuity, it is likely that a financial or insurance advisor will present this using the safety of principal feature, as well as the lifetime income benefit that this annuity can provide.
With so much volatility in the market today, guarantees can be comforting – especially for those who are at or nearing retirement. So, just knowing that this income stream won’t run out can allow you to live a less stressful retirement.
Yet, just like many other areas of life, in order to get something, you need to give something – and this holds true for the Flex Premium fixed annuity from New York Life. For example, first off, returns that are offered on fixed annuities today are extremely low. So, your chances of meeting – much less beating – future inflation are extremely small.
This, in turn, means that you may not be able to keep up your purchasing power with the rising cost of goods and services, which could make it quite difficult to buy the things you need in the future.
Do you really want to spend your retirement years “hoping” you have enough money to pay your living expenses?
Fees Associated with the New York Life Flex Premium Annuity
And then there are the fees. Annuities are notorious for charging fees – which can end up lowering your return even more. In this case, you’ll incur an administrative fee on the Flex Premium annuity (after the first policy year) that is the lesser of $30 or 2% of the accumulation value. (Although the insurance company is nice enough to waive this fee if you have more than $10,000 in the annuity contract).
There are also surrender fees that could be charged if you opt to withdraw more than 10% of the contract value in any of the first ten years and/or if you surrender the entire contract during that time.
New York Life Flex Premium Annuity Surrender Charge Schedule
You could also owe tax on any gain that is withdrawn. And, on top of that, if you take such withdrawals before your turn age 59 1/2, then you may also be subject to an additional “early withdrawal” penalty of 10% from the IRS.
The Annuity Gator’s End Take on the New York Life Flex Premium Fixed Annuity
Where it works the best:
As a fixed annuity, the New York Life Flex Premium Fixed Annuity can work well for those who are seeking the following benefits:
- The opportunity for a set amount of return
- Protection of principal, regardless of what happens in the stock market
- Guaranteed lifetime income benefits
Where it works the worst:
It is also important to consider the potential drawbacks of this annuity. This particular product will not likely be a good option if you:
- Need access to more than just 10% of your contract value within the first ten years of owning the annuity.
- Do not plan on utilizing the lifetime income benefits.
There can be a long list of factors to consider if you are looking for the ideal annuity for your short- and long-term financial goals. These criteria should include how the annuity earns a return, as well as what you plan to do with it when you are ready to convert the contract to an income stream. Certainly, any additional fees and charges should also be considered, as these can have an effect on how much you are able to earn, and in turn, the amount of income you may receive.
If you are still considering the New York Life Flex Premium fixed annuity, then you can be assured that your money will be safe, no matter what occurs in the market. In addition, there is also the plus of having an ongoing income in retirement, for as long as you may need it.
Yet, even with all of these nice advantages, this annuity could still fall somewhat short – and quite frankly, there may very well be a better alternative out there for you. The only way to really know this, though, is to have the annuity tested.
We can help you with this by running the appropriate figures through our annuity calculator, and then coming up with a personalized spreadsheet for you. If you are interested in obtaining this information, then just simply contact us through our secure online form here.
Have Any Additional Questions? Did You Happen to See Any Mistakes in this Annuity Review?
We realize that this annuity review was a bit on the long side. So, for that, we thank you for staying with us thus far. Our feeling is, though, that we would much rather provide you with “too much” detail than not nearly enough. So, if you found this annuity review to be helpful, please feel free to pass it along and forward it to anybody else who you think may also benefit from it.
Are there any other annuities that you would like us to review?
No problem! Just let us know the name of the annuity (or annuities), and our team of highly trained annuity “geeks” will get on it. Then, be sure to check back soon to AnnuityGator.com to view the new (and updated) reviews.
The Annuity Gator
P.S. If you would like to read more of our New York Life annuity reviews here are some links to check out:
- Independent Review of the New York Life Secure Term Choice Fixed Annuity ll.
- Independent Review of the New York Life Secure Term MVA Fixed Annuity lV.
- Independent Review of New York Life Annuities: The New York Life Guaranteed Lifetime Income Annuity II.
- Independent Review of the New York Life Guaranteed Future Income ll Deferred Income Annuity.
- Independent Review of the New York Life Guaranteed Period Income Annuity ll.
- Independent Review of the New York Life Secure Term MVA Fixed Annuity ll.
- Independent Review of the New York Life Clear Income Fixed Annuity – FP Series.