Independent Review of the New York Life Clear Income Fixed Annuity – FP Series
What Will We Cover in this Annuity Review?
In this review, we’ll cover the following information on the New York Life Clear Income Fixed Annuity – FP Series:
- Product type
- Current rates
- Realistic long-term return expectations
- How it is used
- How it is most poorly used
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 the purchase of a financial vehicle that can provide you with a guaranteed rate of growth and protection of principal, along with a lifetime income in retirement, then the New York Life Clear Income Fixed Annuity – FP Series may be a good option for you.
That’s because, with a fixed annuity, you get a set amount of growth in your account – along with protection of your principal – even in the event of a market downturn. These annuities can also offer you a lifetime income option so that you can rid yourself of the worry that you’ll run out of income in retirement.
However, prior to running out and signing on the dotted line to buy this – or any other – annuity, it is imperative that you first have a good understanding of just exactly how the product works, as well as how it may or may not fit in with your overall financial needs and goals.
Over the past few years, the purchase of fixed annuities has increased dramatically. One reason for this is because of the many benefits these vehicles can offer during their “accumulation” period, as well as when the time comes to convert the annuity to an income stream.
However, due to the increased demand for annuities over the past several years, there have been a number of insurance carriers that are bringing to market new products. These offer numerous bells and whistles that can make what is an already confusing product even more so.
With that in mind, unless your current insurance or financial representative has a primary focus on annuities, you might want to spend some time learning more about how these financial vehicles work – especially as you could be placing a substantial portion of your hard earned savings into it.
That’s where the Annuity Gator comes in!
Annuity and Retirement Income Planning Information You Can Actually Trust
If this is the first time that you’ve visited the AnnuityGator.com website, please allow us to officially welcome you here. At Annuity Gator, we make up a team of annuity experts who focus on providing highly comprehensive, yet unbiased, annuity reviews. We have been doing this for many years now – far longer than our competitors have – and because of that, we’ve become a trusted source of annuity information.
Recently, though, there have been numerous “copycat” websites that have been popping up all over the Internet. And, while some of these may be able to give you some basic information regarding annuities, what you are likely going to find is that these sites are often just simply reiterating what our information here already shows.
If you’ve been spending a considerable amount of time online seeking information about annuities, then it’s likely that you’ve run across some conflicting details about these financial vehicles. This, however, is not really surprising, as there are many different thoughts and feelings about annuities.
It is also possible that you’ve recently been an attendee at a seminar about annuities where, in return for a dinner or a lunch, the presenter offered you information about the American Equity Investment Life RateShield 10 Plus or some other similar annuity.
It may even have been your attendance at that seminar that has led you here to our website in search of additional information. Likewise, in your quest for information about annuities via the Internet, you may also have seen some 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
Unfortunately, as enticing as these claims may sound, it is absolutely essential that you first verify their validity before you move forward with a long-term financial commitment, just like you would likely do before purchasing any other type of “high ticket” item.
The good news is that, if you are in fact looking for more details about the New York Life Clear Income Fixed Annuity, you are definitely in the right place. In fact, dare we say that this website is the only place online where you will find all of the pertinent details that you require for making a well-informed decision about whether this annuity is right for you (or if you should instead move on to something else).
Just to be clear here before we move on – we do want to state that we fully believe that annuities can be wonderful products for some people, provided that they fit in with both your short- and your long-term financial goals.
So, if you are ready to begin this annuity review, let’s go ahead and dive in!
New York Life Clear Income Fixed Annuity – FP Series at a Glance
|Product Name||Clear Income - FP Series|
|Issuer||New York Life Insurance Company|
|Type of Product||Fixed Deferred Annuity|
|Phone Number||(800) CALL NYL|
Opening Thoughts on the New York Life Clear Income Fixed Annuity – FP Series
With more than 170 years of service under its belt, New York Life Insurance Company is considered to be one of the largest and most respected insurance companies in the industry today.
In 2016, this insurer brought in more than $1.95 billion in operating earnings, and held in excess of $23.3 billion in surplus and asset valuation reserve, making it a strong source of policyholder payments. That same year, New York Life held roughly $538 billion in assets under management, with over $956 billion in just individual life insurance in force.
The company is proud of its conservative investment philosophy, and it prudently invests the premiums and fees that it collects on life insurance and annuity products for the long-term. In addition, while dividends are never guaranteed, New York Life has consistently paid out dividends to qualifying policyholders for 163 years. In 2017, the amount of these dividend payments (cumulatively) was nearly $1.8 billion. Based on its financial strength and stability, New York Life has consistently received the highest ratings from the insurer rating agencies, including:
- A++ from A.M. Best Company
- AAA from Fitch Ratings
- Aaa from Moody’s Investors Service
- AA+ from Standard & Poor’s
Over the past few years, fixed annuities in have become much more popular with investors. One of the key reasons for this is because these products can provide the opportunity for a guaranteed rate of growth, while also keeping the account value safe and sound, no matter what occurs in the stock market. And, like other types of annuities, a fixed annuity will also be able to pay out a lifetime income in retirement so that you don’t have to worry about your income stream running out. In this case, you can count on a specific amount of income in the future.
However, 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 out 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 Clear Income Fixed Annuity
According to New York Life Insurance Company, the Clear Income Fixed Annuity – FP Series is a fixed deferred annuity that is designed for those looking for income with some liquidity. This annuity offers a unique combination of income, flexibility, and security – which can provide income without having to give up safety or flexibility if or when your plans change.
There is an initial seven-year interest rate guarantee on this annuity (the rate on this is determined at the time of issue), and it is based in part on the amount of money that is deposited and has accumulated in the annuity contract. For example, the bands are broken down as follows:
- $50,000 to $99,999
- $100,000 to $1,499,999
- $1,500,000 and over
The interest rate will remain fixed, regardless of what occurs in the market, or even in the economy overall.
At the end of the rate guarantee period, the annuity will receive a new renewal rate each anniversary. This rate will be based on the amount of accumulated value that is in the annuity at that time. (Although it will not be lower than the guaranteed minimum interest rate that is stated in the policy).
With the Clear Income annuity, there is a Guaranteed Lifetime Withdrawal Benefit (GLWB) rider automatically included, which will ensure that you receive income for as long as you live, regardless of how long that may be.
This rider provides a guaranteed stream of lifetime income payments, which will be calculated from the annuity’s income base – and the income will be paid either on a single basis or joint (spousal), so two people could benefit from this.
During the annual increase period, the income base per this rider will grow each year at a 5% compounded rate, for up to ten years, or until you begin to take your lifetime withdrawals – whichever comes first.
There is also a death benefit included with the Clear Income fixed annuity. With this, in the event of the annuitant’s passing, a named beneficiary (or beneficiaries) will receive the remaining accumulation value in the annuity.
A return of premium benefit will take effect on the two-year contact anniversary. This entitles you to a return of at least the amount of premium that you’ve paid in (minus, of course, any prior withdrawals and/or surrender charges that may be incurred).
As an added benefit, there is a Living Needs / Unemployment rider that is automatically added to the policy, at no additional charge. With this, if you should require immediate access to the funds that are in the annuity, the rider could give you some flexibility in accessing it – provided that you meet the required guidelines.
If you want more of a full rundown of all the ins and outs of the New York Life Clear Income Fixed Annuity – FP Series, you can check out the product fact sheet HERE.
How an Insurance or Financial Advisor Might “Pitch” this Annuity
Because the Clear Income is a fixed annuity, it is likely that a financial or insurance advisor will pitch 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 (and even more so if market losses are still fresh in your mind from the 2008 economic and market downturn).
But as with most anything else in life, in order to get something, you need to give something – and this holds true for the Clear Income 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 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.
In this case, the guaranteed minimum interest rate is certainly nothing to write home about, as the minimum (as of mid-November 2017) is a mere 0.05%…which is likely something you could achieve in a basic bank savings account – without having to worry about surrender charges if you needed to make a withdrawal. Also, the guaranteed minimum interest rate is capped at a maximum of 5%.
It is also important to keep in mind that the income base is not the same thing as your annuity’s accumulation value. So, the guaranteed 5% annual growth for up to ten years on this is not at all the same as having your contract value grow by 5% compounded each year. This is where may annuity purchases (as well as some insurance and financial advisors) can get tripped up.
There are also some stipulations that you’ll need to meet in order to take advantage of the additional features such as the Living Needs / Unemployment rider. For example, you must have been enrolled and living in a healthcare facility for at least 60 consecutive days, be diagnosed with a life expectancy of 12 months or less by a licensed physician, have a total and permanent disability that prevents you from performing any work for pay or profit for at least 12 consecutive months, or qualify for and have been receiving state unemployment benefits for 60 consecutive days.
What About the Fees Associated with this Annuity?
As with most other annuities, there are some fees that you need to be mindful of with the Clear Income fixed annuity from New York Life Insurance Company. First off, even though it is automatically included and only cancelable by the owner upon full surrender of the annuity, there is an annual charge for the Guaranteed Lifetime Withdrawal Benefit.
In addition, in most cases, fixed annuities that offer a guaranteed interest rate for multiple years will also have a surrender charge for a matching time period. In the case of the New York Life Clear Income annuity, the surrender charge will run for seven years as follows:
The surrender charge will be incurred on withdrawals during the surrender period that exceeds 10% of the contract value. 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 Clear Income Fixed Annuity
Where it works the best:
As a fixed annuity, the New York Life Clear Income Fixed Annuity – FP Series can work well for those who are seeking the following benefits:
- The opportunity for a set amount of return – and a guaranteed interest rate for a full seven years
- Protection of principal, regardless of what happens in the stock market
- Guaranteed lifetime income benefits (for an individual, or an individual and a joint income recipient)
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 seven 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 Clear Income 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.
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