What will we be going over in this annuity review?
In this review of the New York Life Insurance Company Premier Variable Annuity ll, we will be discussing the following details:
- Annuity type
- How it works
- Pros and cons
- Fees
- How it may be presented by an advisor
- Where it works best
- Where it may not work very well
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you’ve been worried about having enough income to last you through retirement, then it is possible that you’ve looked into purchasing an annuity. Not only can these financial vehicles provide you with an ongoing cash flow in the future, but depending on the type of annuity you choose, you can also attain tax-deferred growth in your account during the “accumulation period”.
But before you make a commitment to any annuity, it’s important that you have a good understanding of what the product will and won’t do for you. Annuities can be complicated – especially some of the newer versions that have a lot of “moving parts.”
When it comes to variable annuities, you also need to be mindful of the fact that, even though your funds can grow in a tax-advantaged manner, you can also be subject to market risk in the event of a correction – or even a slight downward blip.
In addition, once you have committed to an annuity, it can typically be difficult to get your money back – at least without paying a surrender charge – if you determine later on that it really isn’t the right financial tool for you.
That’s where the Annuity Gator comes in.
We focus on providing in-depth education to people who are interested in annuities. You can check out our extensive annuity review database on our website. And, if you’re looking specifically for more details on the New York Life Premier Variable Annuity ll, then all you have to do is stay right here and keep reading!
Annuity and Retirement Income Planning Information You Can Trust
If you’ve never visited our website before, please allow us to personally welcome you here to Annuity Gator. We are a team of experienced financial experts who are dedicated to helping you decode the complicated world of annuities.
Here at Annuity Gator, we strive to create unbiased, yet highly comprehensive, annuity reviews – which you can find on our website in our annuity review database. We have been at this for far longer than most of those “copycat” websites out there…but that doesn’t stop them from trying to mimic what we do! (Imitation IS the highest form of flattery, though, isn’t it?!)
Annuities are a unique financial vehicle in that they are the only product that can make the promise of providing you with a lasting, lifetime income stream. Unfortunately, though, some advisors – albeit unintentionally – will try to make them sound better than they actually are. One reason for this is because in order to obtain the nice benefits from annuities, there are oftentimes some tradeoffs that you need to make.
For example, variable annuities are essentially designed to do two key things – grow principal and provide lifetime income. But the truth is that these particular annuity products are also prone to market risk, which can have an impact on the ability of your nest egg to last as long as you need it to. Plus, quite frankly, variable annuities are not really all that good at providing the retirement income you will need down the road.
Overall, variable annuities in general offer a lower income payout amount than what you can typically get by putting your money into a different – and safer – type of annuity…and without enduring endless sleepless nights worrying about a market downturn.
Many annuity sales reps, and even many of the annuity websites that you’ll see online, will make some pretty bold claims about the performance of the annuities that they offer, such as:
- 7 to 8% return
- Low fees
- Guaranteed income for life
- No market risk
Does this look familiar?
But the goal of the annuity reviews that you’ll find here on AnnuityGator.com is to provide you with information on the features and benefits inside the annuity, and to help you better understand what the benefits could mean to you and your financial situation – both now and in the future.
So, if you’re ready to get started on our review of the New York Life Premier Variable Annuity ll, then let’s dive right in!
The New York Life Premier Variable Annuity ll at a Glance
Policy Year | 1 | 2 | 3 | 4 | 5 | 6+ |
---|---|---|---|---|---|---|
Surrender Charge % | 9 | 8 | 7 | 6 | 5 | 0 |
Opening Thoughts on the New York Life Premier Variable Annuity ll
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.
Remember, though, with a variable annuity, there is the risk of market-related loss. But, there is also the opportunity growth – and as an added bonus, that growth can compound on a tax-deferred basis. So, it is important to weigh out all of the possible pros and cons of variable annuities before moving forward with one.
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, to obtain our free annuity report.
How New York Life Describes the Premier Variable Annuity ll
On its website, New York Life Insurance Company describes variable annuities as a financial vehicles that allow your savings to potentially grow in the market, provide that you are willing to accept the risk that returns will fluctuate – including the possible loss of principal.
So far, that doesn’t seem like a very good deal – especially if you’re hoping to ensure that you’ll have a guaranteed income in retirement. Even so, the Premier Variable Annuity ll from New York Life could still be a viable option for some investors.
This annuity offers a wide array of investment options in different asset classes and styles from well-known asset management companies. In order to make investing and managing your money easier, the insurer also offers a selection of asset allocation funds or model portfolios that are designed by an unaffiliated third-party investment advisor – QS Investors, LLC – which is a subsidiary of Legg Mason Inc.
There is also a fixed account that can offer a guaranteed interest rate for a portion of your investment in the annuity. So, depending on your overall risk tolerance and your time horizon until retirement, allocating at least some of your funds here could be a good way to diversify.
The Premier Variable ll from New York Life also offers some added features and benefits, including a death benefit that guarantees that your beneficiary(ies) will receive the greater of the account value (minus any applicable loan balance) or the money you invested into the account, less any withdrawals and/or fees.
There is also a one-time death benefit step-up that is included at no additional charge. This allows the amount of the death benefit, after the initial surrender period, to be stepped-up to the account value at that policy anniversary if that value is higher than the policy’s initial death benefit.
Likewise, the annuity offers a living needs benefit and unemployment rider, as well as a couple of optional riders that are available for an added premium price:
- Annual Death Benefit Reset Rider
- Investment Preservation Rider 3.0
To check out all of the New York Life Premier Variable Annuity ll features and benefits at a glance, you can view the fact sheet HERE.
You can also go here to download the updated Premier Variable Annuity prospectus.
How an Advisor Might “Pitch” the Premier Variable Annuity ll from New York Life to You
If you have been presented the New York Life Premier Variable Annuity ll by an insurance or financial advisor, it is likely that he or she keyed in on the tax-deferral of the account, as well as the opportunity for generating a higher return than you could get with either a fixed or a fixed indexed annuity.
Of course, there are also a number of income options that are available on this annuity – which include an alternative for lifetime income either for an individual, or for joint annuitants. So, this could help to rid you of the worry about running out of money in retirement.
Your professionally-managed funds can also allow you the opportunity to generate a nice return – provided that the market doesn’t fall like it did in the 2008 recession, or the more recent 2020 Coronavirus pandemic. This growth is also tax-deferred, meaning that you won’t have to worry about taxes on the gains until the time of withdrawal.
Yet, while this is all well and good, variable annuities are not necessarily known for being the best alternative for generating lifetime income. So, if retirement income is your primary goal with this annuity, it may not be the best option for you.
One reason for this is because, while you can obtain a stream of income for life, oftentimes, due to the risk to the insurance company involved, these products end up only generating the same amount of income – or less – than safer options such as fixed annuities.
That being the case, would you really want to endure sleepless nights wondering what the market is going to do, and worrying that your hard-earned principal could be lost before you retire?
Variable annuities can actually be pretty confusing products – and because of that, it is important that you know what you’re getting into, and you know what questions you should ask before moving forward. With that in mind, if you would like some additional tips on what you need to know before buying an annuity, just simply so that you can immediately access our free report on how to shop for an annuity.
Fees Associated with the Premier Variable Annuity ll from New York Life
In addition to the risk of market-related losses, variable annuities can also be loaded with a wide variety of charges and fees. These, in turn, can reduce your overall return. With the Premier Variable Annuity ll from New York Life, you could incur a number of fees.
According to the product’s prospectus, “You will pay fees every year you own your annuity.” These fees can include:
- Mortality & Expense (M&E) charge. This can range from 1.00% to 1.70%
- Annual policy service charge of $30 to $40 per year
If you choose to add an optional rider to the annuity, you may also have to pay an additional premium charge for this/these benefit(s).
As with most other annuities, the Premier Variable ll product from New York Life Insurance Company also imposes a surrender charge if you make withdrawals that are over the free withdrawal amount during the first seven full years.
The surrender charge starts out at 8% in Year 1, and eventually grades downward until it reaches 0% in Year 8. With that in mind, it is important to make sure that you don’t contribute any money to this annuity that you may need in the near future for emergencies or other financial obligations.
New York Life Premier Variable Annuity ll Surrender Charge Schedule
Policy Year | 1 | 2 | 3 | 4 | 5 | 6+ |
---|---|---|---|---|---|---|
Surrender Charge % | 9 | 8 | 7 | 6 | 5 | 0 |
You could also owe taxes on part or all of these withdrawals. And, if you make such withdrawals before you have turned age 59 ½, you could owe an additional 10% “early withdrawal” penalty to Uncle Sam.
To view all of the fees and other details regarding the New York Life Premier Variable ll Annuity, you can download the prospectus here.
The Annuity Gator’s End Take on the New York Life Premier Variable Annuity ll
Where the annuity works best:
As a variable annuity, the Premier Variable Annuity ll from New York Life could be a viable option for those who:
- Want the opportunity for high, market-related returns
- Are seeking a lifetime income
- Want to keep depositing money into a tax-advantaged financial vehicle after they have maxed out their IRA and/or their employer-sponsored retirement plan(s)
Where it works the worst:
Conversely, this may not be a good option for those who:
- Have a lower tolerance for risk
- Need their money before the end of the 7-year surrender period
- Do not plan on using the lifetime income feature
In Summary
When you are weighing the pros and cons of purchasing any type of financial product, it is important to consider your overall goals – both the short and long term. With some investors, the primary draw of a particular product may be the opportunity for growth – even if it means risking the protection of principal.
As it relates to the New York Life Insurance Company’s Premier Variable Annuity ll, there are numerous benefits, such as the many investment options, the ability to diversify, and of course, the income stream you could obtain in retirement.
However, there are also some tradeoffs that you need to consider – which include being exposed to market-related risk, as well as the numerous charges and fees that are involved with variable annuity products such as this one.
So, if you are a bit hesitant to move forward – especially with depositing a sizeable chunk of your retirement savings – it is possible that it is because there are other financial product alternatives that could fit your needs a bit better.
The only way to truly know if this, or any, annuity is a good fit for you is to have it tested. We can provide this service for you, so if you would like to input your specific information and see the resulting details, just simply contact us.
Have Any More Questions on the New York Life Premier Variable Annuity ll?
We realize that this annuity review ran a bit long, so we thank you for sticking with us thus far. However, we believe that it is important to provide “too much” information, as versus as not enough.
If, after reading through this annuity review, you still have any questions or concerns about the Premier Variable Annuity ll from New York Life, we encourage to reach out to us directly via this secure online contact form. Our annuity experts will be happy to walk you through any of the information that you need.
Also, if you benefitted from this annuity review, please feel free to share it by forwarding it on to anyone whom you know that may also benefit from it. We are always happy to help others in determining whether or not a particular annuity may be right for them.
In addition, we know just how quickly information about annuities can, and does, change. Therefore, if you happened to notice anything in this review that may be outdated or in need of revision, please let us know that, too and we will make the necessary updates as soon as possible.
Are there any other annuities that you would like to have us review?
If so, no problem! Just let us know the name of the annuity (or annuities, if there is more than just one), and our team of annuity geeks will get on it!
Best,
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.