In today’s review, I’ll be covering the following information on the Preference Plus MetLife Variable Annuity:
- Product type
- Current rates
- Realistic long term investment expectations
- How it is best used
- How it is most poorly used
There are certain things that the Preference Plus MetLife Variable Annuity does well compared to other variable annuities, however, there are certain limitations as well. There are also certain details some agents might say about how well this annuity performs that are not entirely true or accurate.
It’s really important that you fully understand the differences (between what advisors may say, and how the product actually works), so you can see for yourself if it’s really a good fit as part of your financial plan.
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When going online to get annuity education and information, what you’ll find is that most of the websites are run by annuity agents. They might appear (certainly trying their hardest) to look like unbiased educators, but keep in mind that their #1 motivation is to actually sell you an annuity. There are others that are vehemently opposed to annuities, but really have no idea how they actually work.
Either one of these approaches is flawed and doesn’t benefit you in any way as you’re out to discover if a certain annuity is right for you.
Our website is much different, here at Annuity Gator, we publish the most comprehensive independent annuity reviews on the web, and have been doing so longer than any other (and now many) copycat annuity websites you’ll find out there.
Let’s dig in!
Preference Plus MetLife Variable Annuity at a Glance
|Product Name||Metlife Preference Plus Income Variable Annuity|
|Issuer||Metropolitan Life Insurance Company (MetLife Inc.)|
|Type of Product||Variable Annuity|
|Standard & Poor's Rating||"AA-" (Very Strong)|
Opening Thoughts on Preference Plus MetLife Variable Annuity
According to LIMRA (an insurance and annuities a research institute), Metropolitan Life Insurance company (MetLife) ranks in the top six of variable annuity insurance companies sales.
MetLife offers a number of variable annuities including:
- Metlife Series VA4
- Metlife Series S
- Metlife Series L
- Metlife Series VA
- Metlife PrimElite IV
- Metlife Preference Premier
- Metlife Preference Plus Income Advantage
- Metlife Preference Plus Select
- Metlife Preference Plus Account
- Metlife Gold Track Select
- Metlife Enhanced Preference Plus Account
The MetLife Preference Plus Income Advantage is labeled an immediate variable income annuity or “Income Annuity”. When you buy this annuity, you are purchasing a promise to receive periodic payments under the terms of the contract. Income payments from the Preference Plus Income Advantage Variable Annuity typically begin within twelve months, which is why MetLife labels it an “immediate” annuity.
This annuity is considered a “variable” because the value of the income payments will vary based on the performance of the investments that you select, resulting in payments that may go up or down. Keep in mind that the performance of this annuity is NOT guaranteed, and your income payment dollar amounts are at risk in the performance of the investments contained within this annuity.
The primary purpose for this MetLife variable annuity is to produce income as there is no accumulation of cash value in an income annuity. Some investors may choose to make withdrawals from this annuity, it’s simply not designed for those looking to grow or accumulate their cash value to be withdrawn in the future.
Preference Plus Income Advantage does have a fixed payment option called the “Fixed Income Option”. The Fixed Income Options may guarantee lifetime fixed dollar amount income payments for yourself, or you and your spouse.
This annuity can provide you a regular stream of income payments for either your lifetime or a specific period. You may also choose the frequency of your payments to be either monthly, quarterly, semiannual or on an annual basis.
You may choose a portion of your income payments to be fixed and guaranteed with the Fixed Option. When you are choosing how to receive your income payments, you’ll want to consider the following:
- How much income you need
- How much income will you be expecting to receive from other sources
- The growth potential of your other investments
- How long you want to receive your income payments
Before we get into the gritty details, here are some legal disclosures…
This MetLife variable annuity review is an independent product review, not a recommendation to buy or sell an annuity. MetLife has not endorsed this review in any way nor do I receive any compensation for this review. This review is meant to be an independent review at the request of readers so they could see my perspective when breaking down the positives and negatives of this particular model annuity. Before purchasing any investment product be sure to do your own due diligence and consult a properly licensed professional should you have specific questions as they relate to your individual circumstances. All names, marks, and materials used for this review are the property of their respective owners.
How MetLife Describes The Preference Plus Income Advantage
Per the Preference Plus Income Advantage Prospectus, here are some key points as to how it’s marketed:
- Labeled as an Income Annuity designed to produce income and not to accumulate the cash value of the annuity.
- Ability to receive “Fixed Income” guaranteed payments or “Variable Income” payments tied to the performance of its investment sub-accounts (or a combination of Fixed and Variable income payments).
- Value of income payment increase when its containing investments perform well.
- Similar to an “immediate annuity” because income payments begin within twelve months.
- Flexibility to select investment portfolios amongst Metropolitan Fund and Met Investors Fund’s diverse fund options.
There are other options to consider, but what is listed above covers the basics. If you’re looking for the entire prospectus, you can download the MetLife Preference Plus Income Advantage Prospectus here.
How Financial Advisors Might “Pitch” This MetLife Variable Annuity
Since this MetLife variable annuity has multiple benefits – there are a few different ways it might be pitched. In my experience, however, is that most agents will focus on two main components:
- Get “Fixed Income” or guaranteed payments for life
- Flexibility to select from numerous investment choices and receive increased “Variable” payments based on the performance of the selected investment portfolios.
Although this the Preference Plus Income Advantage is technically a variable annuity, it has immediate and fixed annuity-like features and may be termed a “hybrid annuity”. The hybrid annuity has been popularized in recent years through aggressive advertising (particularly online) and is really just a marketing term some agents have created to explain an annuity that gives you a form of growth, access to your balance, and guaranteed income all rolled into one annuity.
While these might be true statements, this MetLife variable annuity (or any investment) is not perfect. It tends to work really when used properly, but has it does have its shortcoming just like any other financial strategy. One of the biggest concerns that I have is seeing agents misrepresent how this annuity will actually perform, which could pose a huge problem to the investor later down the road.
From the many people I’ve spoken to personally about their experience working with agents, most seem to have been told that this annuity will perform “better” than other annuities.
Is any of that true? Not exactly.
If that’s part of your agent’s sales pitch – run, don’t walk, to find a more honest financial advisor. It certainly has the potential for upper single digit returns (and could even produce low double-digit returns), but could also return less. A lot of the return potential will be determined by how you allocated your deposit in the annuity, so having a good advisor that knows how to best structure the product is paramount.
The Annuity Gator’s End Take On Preference Plus MetLife Variable Annuity
Where it works best:
- For producing a reliable, “pension-like” guaranteed income stream (so long as “Fixed Income” option is elected to guaranteed a consistent income payout)
- For producing an income for life that cannot be outlived by a surviving spouse
- For producing additional income for home health care needs (subject to state approvals and annuity holder qualification)
- For investors not needing to grow their principal balance to cover their retirement lifestyle
Where it works worst:
- For those who need to have substantial liquidity with their financial assets (this does have liquidity, but just not 100% without incurrent penalties during the surrender period)
- For those seeking maximum long-term growth
This MetLife variable annuity provides numerous potential benefits, rolled up into one annuity. You can think of it like a Swiss army knife in that it can do a number of things, it just doesn’t do any one thing best if you try to use all the features/options simultaneously.
If you’re looking for guaranteed income with and minimized mark risk, you’ll want to ensure that you have this annuity tested against numerous others to be sure it’s the right fit for your unique situation. For someone looking for immediate income payments and have the option to have their income increase when the market performs well – this might be a very good fit.
My biggest concern with this MetLife variable annuity (and most annuities in general), is that some agents really don’t understand what the real return potential is (and the associated fees), and significantly over-promise what’s realistic – so be especially wary of an agent who suggests this annuity will work better than how I have illustrated it here. If your agent is being upfront and honest with you, you’ll notice their explanations will match up very closely (if not exactly) as described in this annuity review. If that’s the case, then you have an agent that you can trust. If you’d like to have us check up on your agent, or refer you to one we know in your area, simply click here to reach out via our secure contact form.
The only way to be sure that this annuity is right for you is to have it tested. We do this free at AnnuityGator.com, so if you get in touch with us, we’ll use our proprietary calculator to illustrate for you what likely returns you’ll see for your situation. If your agent was honest with you, the numbers will match up – if not, well then you might want to reconsider who your agent or advisor is.
Have Questions on the Metlife Preference Plus Income Advantage Variable Annuity? See any Mistakes?
If you have any questions about this annuity, please let us know. You can reach the Annuity Gator via the Free Annuity Help form here.
Variable annuities can certainly be confusing and a lot of advisors are pushing investors very hard to buy them. But you need to know the real facts to make sure that if you go down that route, you don’t end up making an irreversible decision that you’ll regret. After all, annuities are long-term investments with contracts, surrender penalties, etc. For some people, they really don’t make sense at all, while others they might.
If you know someone who has an annuity or is considering purchasing one, please share this article with them. There’s a lot of people getting very conflicting information out there and our goal in writing this review is to educate in an objective way. Also, if you have a Facebook account you can click on the little “Facebook” icon and share this post, that way more people will be able to find it and hopefully more people will benefit.
Thanks for bearing with me on this rather long post, I hope you found it beneficial in your research on the Preference Plus MetLife variable annuity.
If you know anyone who has an annuity or is thinking of buying one, please share this post with them. I know a lot of people are getting very conflicting information and my goal in writing this review and making the video was to educate in an objective way. If you have a Facebook account you can click on the little “Facebook” icon and share this article. That way more people will be able to find it and hopefully, more people will benefit.
Thanks for bearing with me on this rather long post, I hope you found it beneficial in your research on the MetLife Preference Plus Income Advantage Variable Annuity.
Lastly, like all humans – we do make mistakes, so if you find any mistakes on this review please reach out and let us know. We’re always more than happy to make corrections and give credit where credit is due. If you’re an investor and you found this review confusing and have more questions, feel free to reach out to us as well. We may not be able to get back to you right away, but we can usually answer most questions within a few days.
The Annuity Gator