New York Life Adds Fixed Annuity With Lifetime Withdrawal Guarantee
Buyers of the contract can get a guaranteed lifetime withdrawal benefit rider.
Many life insurers have announced plans to shift away from taking on new annuity benefits guarantee risk in recent years.
New York Life is moving in a different direction with the introduction of its Clear Income Advantage annuity.
The product is a fixed deferred annuity with a guaranteed lifetime withdrawal benefit rider. New York Life is including the rider with the contract automatically for purchasers who are ages 75 or younger at the time of purchase, according to a product fact sheet.
The product is aimed at clients who want a guaranteed lifetime stream of income along with some access to their cash.
What It Means
Clients are scared of volatility, and so are many insurers. But some new products with guaranteed benefits are still out there.
New York Life
New York Life is a policyholder-owned mutual insurer, with $710 billion in assets under management at the end of 2022.
It ranked first for sales of deferred fixed-rate annuities in 2022, with $15 billion in sales of those products, according to the Life Insurance Marketing and Research Association (LIMRA).
It generated $3.3 billion in sales of payout annuities, including immediate income annuities, deferred income annuities and annuities used to fund lawsuit settlements, and it ranked first in that LIMRA sales category.
The Annuity Details
New York Life is writing the new contract through its New York Life Insurance and Annuity Corp. subsidiary.
The company is offering the annuity to people ages 50 through 80, with a minimum initial premium of $50,000.
New York Life is guaranteeing to pay a set rate of interest for seven years. At the end of the seven-year period, the company will pay at least the contract’s guaranteed minimum interest rate. The actual renewal rates will depend on how much cash is still in the contract.
But “a client’s account value and guaranteed income are never tied to market performance,” New York Life says.
The initial guaranteed lifetime withdrawal rate is locked in at purchase and will depend on the purchaser’s age. Purchasers who use the lifetime withdrawal mechanism can continue to take withdrawals, starting at any age after the contract holder turns 59 1/2, even if the contract’s “accumulation value” falls to zero.
The annual fee for the guaranteed living withdrawal benefit rider is 0.95% of the contract accumulation value.
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