Independent Review of the New York Life Secure Term Choice Fixed Annuity ll
What Will We Cover in this Annuity Review?
In this annuity review, we will be going over the following details regarding the New York Life Secure Term Choice Fixed Annuity ll:
- Product type
- Current rates
- Realistic long-term expectations
- How the annuity is best used
- How the annuity 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.
For anybody who may be thinking about purchasing an annuity so as to assure that income will continue flowing in (regardless of how long you need it), as well as knowing that principal will be safe, then the New York Life Secure Term Choice Fixed Annuity ll could be a good option for you.
One reason for this is because no matter what happens in the volatile stock market – or even in the economy overall – your money will be safe inside this product. In addition, when the time comes to convert the annuity funds over into an income stream, those payments will keep coming in, alleviating the worry of running out of income before you “run out of time.”
However, before you jump into a long-term financial commitment with the Secure Term Choice Fixed Annuity ll from New York Life Insurance Company – or with any annuity, for that matter, it is essential that you have a good understanding of the benefits that it can provide you, as well as any of the features that could be a drawback.
For instance, even though fixed deferred annuities can offer a long list of nice guarantees, they can be quite difficult to get out of once you’ve gotten in. So, it is best to know all that you can before you do so.
Over the past several years, fixed annuities have risen in popularity – particularly with people who are retired and those who are approaching that time in their lives. However, due in part to this increase in demand, there are many insurance companies that have been coming out with new products. And, while it can provide you with many more options, doing so has also ended up making an already confusing product even more so.
Because of that, unless the insurance or financial advisor that you work with really know 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 you have never been to our website before, please allow us to personally welcome you here. At Annuity Gator, we are a team of experienced financial experts who are dedicated to helping you decode the complicated world of annuities. We strive to create unbiased, yet highly comprehensive, annuity reviews – and we have been at this for far longer than most of those “copycat” websites out there.
Annuities are a highly unique insurance product in that they are the only financial vehicle that can make the promise of providing you with a lasting, lifetime income stream. Unfortunately, though, some insurance and financial services advisors – albeit unintentionally – will tend to make them sound better than they actually are.
Not that they are trying to mislead their clients. Most of them aren’t. But many of these professionals just simply don’t know the intricate details about annuities. Also, in order to obtain the nice benefits and guarantees that you can get with a fixed annuity, there are oftentimes also some tradeoffs that you need to make. So you need to know just exactly what you might have to give up in order to get the guarantees and other benefits an annuity can provide.
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
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, let’s dive in!
New York Life Secure Term Choice Fixed Annuity ll at a Glance
|Product Name||Secure Term Choice Fixed Annuity ll|
|Issuer||New York Life Insurance Company|
|Type of Product||Fixed Deferred Annuity|
|S&P Rating||AA+ (Very Strong)|
|Phone Number||(800) CALLNYL|
Opening Thoughts on the New York Life Secure Term Choice Fixed Annuity ll
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
Given the unpredictability in the stock market over the past several years, the demand for fixed annuities has grown a great deal. One reason for this is because fixed annuities can provide the benefits of keeping assets safe, as well as an assurance of a stable and reliable income stream in the future.
However, because of the extremely low-interest-rate environment that we have been in for roughly the past ten years, the return that is offered by most fixed annuities is painfully low – and that can create problems for you and your money.
For instance, the returns that are obtained on fixed annuities have not even been enough to outpace the inflation rate over time. Because of these low rates, your future purchasing power could be affected – especially if you plan to use the income from a fixed annuity as a primary source of your retirement income down the road.
So, even though your money is technically “safe,” going this route may or may not actually be the most beneficial course of action for you. That’s why we’ve compiled this annuity review so that you can weigh the pros and cons.
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 Insurance Company 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.
For additional information on how to compare fixed annuities so that you can decide which may be the best one for you, click here in order to obtain our free annuity report.
How New York Life Describes the Secure Term Choice Fixed Annuity ll
New York Life Insurance Company describes the Secure Term Choice Fixed Annuity ll as a single premium fixed deferred annuity with a number of interest rate guarantee/surrender periods to choose from.
The initial interest rate that you get will ultimately be determined by the amount of your premium payment when it is received, and the initial interest rate guarantee period that you have selected.
Interest Rates (as of December 18, 2017)
|Premium Amount||3 Year||4 Year||5 Year||6 Year||7 Year|
|$100,000 - $1,499,999||2.05%||2.10%||2.25%||2.35%||2.45%|
|$50,000 - $99,999||1.90%||1.95%||2.20%||2.25%||2.40%|
|$25,000 - $49,999||1.70%||1.75%||1.90%||2.00%||2.15%|
|$5,000 - $24,999||1.45%||1.50%||1.75%||1.85%||1.95%|
A return of premium benefit is effective on the second policy anniversary for those who purchase this annuity between the ages of 0 and 85, and it is effective immediately for those who purchase between the ages of 86 and 90. This benefit will entitle you to a return of at least the amount of premium that you paid into the annuity (minus any prior withdrawals and/or surrender charges related to withdrawals made prior to the return of premium effective date).
There are some other features that you get with this annuity, such as a death benefit whereby, in the event of your death prior to annuitization (i.e., converting the annuity to an income stream), your named beneficiary or beneficiaries will receive the full accumulation value of the annuity.
The Secure Term Choice Fixed Annuity ll also includes a Living Needs Benefit / Unemployment Rider. This benefit is automatically included with the annuity, and there is no additional premium required for it.
Here, if you should need immediate access to the money inside the annuity, this benefit can give you some flexibility in accessing it – assuming that you meet one of the following criteria:
- You are enrolled and living in a health care facility for 60 consecutive days
- You are diagnosed with a condition – by a licensed physician – that renders you a life expectancy of 12 months or less
- You have a total and permanent disability that prevents you from performing any work for pay or for profit for at least 12 consecutive months, or
- You qualify for and have been receiving state unemployment benefits for 60 consecutive days.
In addition, you may also choose from one of several optional riders. These include the following:
1) Interest Opportunity Rider (IOR)
The Interest Opportunity Rider is an option that offers you an opportunity to participate in a rising interest rate environment (while still keeping your principal safe). This rider offers you two different alternatives for doing so:
|Option 1||Option 2|
|Potential interest rate increase||0.50%||1.00%|
|Interest rate increase trigger||10-year Treasury rate increases by at least 0.50% on an interest rate opportunity date||10-year Treasury rate increases by at least 1.00% on an interest opportunity date|
|Interest opportunity dates (i.e., dates New York Life will check for Treasury rate increases)||Policy semi-anniversary and anniversary in the first year||Policy semi-anniversary and anniversary in the first two years|
|Rate increase||Occurs automatically if triggered||Occurs automatically if triggered|
|New rate period||New rate will apply for the remainder of the guarantee period||New rate will apply for the remainder of the guarantee period|
2) Enhanced Beneficiary Benefit Rider
If this rider is purchased, your beneficiaries may receive additional money to help offset expenses that could arise as the result of your death, such as tax obligations. This rider’s benefit is calculated as a percentage of the earnings in your annuity at your death, adjusted for withdrawals.
3) Enhanced Spousal Continuance Rider
The Enhanced Spousal Continuance Rider is automatically included if you select the Enhanced Beneficiary Benefit rider (and it may not be purchased separately). With this rider, if your spouse is your sole beneficiary, then he or she will be able to continue your annuity policy upon your death as the annuity’s new owner. Here, the policy’s value would include the amount that is payable under the Enhanced Beneficiary Benefit Rider.
As there are a number of “moving parts” on the New York Life Secure Term Choice Fixed Annuity ll, you can take a look at more of the in-depth details via the annuity’s product fact sheet HERE.
How an Insurance or Financial Advisor Might Pitch this Product
Given our longer life expectancy these days, worry about running out of retirement income is a very real fear. This is one reason why fixed annuities have grown in popularity of late, as they can offer you the assurance of income for the remainder of your lifetime.
Because of that, if you’ve been presented the New York Life Secure Term Choice Fixed Annuity ll by an insurance or financial advisor, it is likely that they have focused heavily on such guarantees.
Likewise, insurance and financial professionals will also key in on the fact that your principal will be safe, and that you can essentially lock in a set rate of interest for a certain number of years – regardless of what occurs in the market, or even in the economy overall.
However, while having these assurances can certainly help you to sleep better at night, the reality is that the interest rates today (and for the past decade or so) that are offered on fixed annuity products would have you hard pressed to meet, much less beat, inflation. And this could lead you to struggle financially when trying to keep up with the rising cost of the goods and services that you’ll need to purchase in the future.
What About Any Fees on the Secure Term Choice Fixed Annuity ll?
While there is no up-front sales charge for this annuity, don’t let that lure you into believing that there are no charges or fees at all. That’s because you could end up incurring various “penalties” and/or trading of your receipt of an additional benefit by earning less.
For example, if you choose to add the Interest Opportunity Rider (IOR) to this annuity, you will receive a lower initial guaranteed interest rate than if you had not chosen to include it. This is somewhat ironic, though, as the IOR is a rider that “offers you the opportunity to participate in a rising interest rate environment.”
Likewise, there is also a charge for the optional Enhanced Beneficiary Benefit Rider. The charge for the rider is deducted from your annuity’s account value on a quarterly basis – although once the annuity has reached its 25th anniversary, the charge will be “discounted.”
Also, should you encounter an emergency and need to withdraw a portion (or all) of your money from this annuity, you can also incur surrender/withdrawal charges. The amount and timing of these will depend upon the interest rate guarantee period that you have selected. For example, if you have chosen the five-year rate guarantee, then your surrender charge period will also run for five years.
Secure Term Choice Fixed Annuity ll Surrender Charge Schedule
On top of that, any of the interest what you withdraw prior to turning age 59 1/2 will also incur an additional 10% “early withdrawal” penalty from the IRS.
The Annuity Gator’s End Take on the New York Life Secure Term Choice Fixed Annuity ll
Where it works best:
While it may not be right for everyone, this annuity will usually work the best for those who are looking for the following benefits:
- Guaranteed lifetime income
- Safety of principal
- Interest rate guarantee – at least for a certain period of time
Where it works the worst:
This annuity may not be an ideal fit if you:
- Want access to most or all of your funds within the first several years (during the surrender charge period)
- Are seeking a high rate of return on your money
- Do not anticipate using the annuity for lifetime income
If you want to really compare the best annuity options for you, click here so that you can download our free annuity report.
There are many different factors that you should ideally consider when you are thinking about the purchase of an annuity. That is because these products are a long-term commitment. Therefore, you should know how the annuity will produce a return, as well as how safe your money is inside the contract, and how (and when) the income from the annuity will pay out.
If you’re still leaning towards purchasing the New York Life Secure Term Choice Fixed Annuity ll, you can be sure that your money will be safe – and that you will also be able to count on a guaranteed income stream for the remainder of your lifetime (regardless of how long that may be).
However, you also need to consider some additional criteria, and the only way to truly know whether or not this particular annuity will be right for you is to have it tested. We can perform this test for you, based on your specific financial parameters, and we can do so for you free, with no obligation. So, if this is something that is of interest to you, all you need to do is just contact us here through our secure online contact form.
Do You Still Have Questions? Did You Notice Any Mistakes in this Review?
We know that this annuity review was a tad bit lengthy – and for that, we thank you for sticking with us here to the end. But our feeling is that we would much prefer to give our readers a bit too much detail than not enough.
So, if you found that this review was beneficial for you, then please do feel free to share it and to forward it on to anybody else that you think may also benefit from it. Also, we know that the details about annuities – and other financial products, too – can and do change somewhat quickly. With that in mind, if you happened to notice anything in this review that needs to be corrected and/or updated, please let us know that as well, and we will get on the revisions right away.
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