New York Life Insurance Company and Fidelity Investments are teaming up to offer a new variable annuity contract, the New York Life Premier Variable Annuity — P Series, with Investment Preservation Rider contract.
The deferred annuity contract comes with a guaranteed minimum accumulation benefit (GMAB) rider.
The GMAB rider can protect an annuity holder’s principal when stock prices fall.
An analysis commissioned by New York Life shows that, in a wide range of conditions, the performance of an annuity with a GMAB rider will beat the performance of “other annuities currently offered in the marketplace,” Fidelity said Monday in an annuity launch announcement.
The authors of the analysis, which was performed by CANNEX, compared the performance of a variable annuity with a GMAB rider to the performance of several different indexed annuities that are classified as fixed annuities.
Issuers of indexed annuities often manage their level of risk by capping the percentage of investment index gains that an indexed annuity holder can keep.
The holder of a variable annuity contract with a GMAB rider will often come out ahead of the holder of an indexed annuity, unless the indexed annuity comes with a very high participation cap, according to the analysis.
“We want to offer investors a product that is simple and easy to understand, while also providing confidence during periods of market volatility,” Bill Johnson, president of Fidelity Investments Life Insurance Company, said in a statement about the new annuity.
Fidelity already offers several New York Life annuity contracts, including a New York Life lifetime income annuity contract.
Fidelity notes in the disclaimers accompanying the announcement that investing in a variable annuity involves risk of loss.
“Investment returns and contract value are not guaranteed and will fluctuate,” the company says. “The contract’s financial guarantees are solely the responsibility of the issuing company.”
— Read Fidelity Executive to Lead LIMRA Retirement Arm, on ThinkAdvisor.