New York Life Introduces Three-Year Term for Its' Secure Term “Market Value Adjustment” Fixed Annuity
The New Three-Year Term Provides a Guaranteed Interest Rate At a Time When Many Expect Rates to Remain Flat
NEW YORK, N.Y., April 19, 2012 -- New York Life today announced the introduction of a three-year initial interest rate guarantee and matching three-year surrender charge period on its popular Secure Term MVA Fixed Annuity.1 This new offering provides a guaranteed 1.15% rate2 tax-deferred, over the three-year term, compared to the national average of 0.69% for three-year CDs. 3 The three-year term complements the product’s existing five-, six-, seven- and eight-year terms, and is now available to consumers through New York Life’s agency sales force as well as through select third parties.
“The new three-year term available on the Secure Term MVA Fixed Annuity offers clients a highly competitive rate that extends through 2014, a period through which many expect rates to be flat,” said Matthew Grove, vice president in charge of New York Life’s annuity business. “Retirees and investors continue to seek safe opportunities for stable growth, and our Secure Term MVA offers extremely competitive tax-deferred growth.”
According to LIMRA, New York Life was the largest seller of Market Value Adjustment Fixed Annuities in the fourth quarter of 2011, with $134.3 million in sales. In the first quarter of 2012, New York Life exceeded its fourth quarter sales with a company-record-setting $262.1 million in sales.
The Secure Term MVA Fixed Annuity offers the following features:
- multiple initial interest rate guarantee periods, including the new three-year term
- tax-deferred growth4
- access to the funds when needed through a surrender-charge-free window during each policy year5
- a guaranteed death benefit where beneficiaries receive the policy’s full accumulation value
- the ability to convert accumulated assets to guaranteed lifetime income
The Market Value Adjustment (MVA) provision6 on the Secure Term MVA Fixed Annuity allows policy owners to receive a potentially higher initial interest rate than other fixed deferred annuities. Optional riders are also available with the Secure Term MVA Fixed Annuity, providing clients with a customizable product designed to meet their unique retirement planning needs.
New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States7 and one of the largest life insurers in the world. New York Life has the highest possible financial strength ratings currently awarded to any life insurer from all four of the major credit rating agencies: A.M. Best (A++), Fitch (AAA), Moody’s Investors Service (Aaa), Standard & Poor’s (AA+).8 Headquartered in New York City, New York Life’s family of companies offers life insurance, retirement income, investments and long-term care insurance. New York Life Investments9 provides institutional asset management and retirement plan services. Other New York Life affiliates provide an array of securities products and services, as well as retail mutual funds. Please visit New York Life’s Web site at www.newyorklife.com for more information.
1. The New York Life Secure Term MVA Fixed Annuity is issued by New York Life Insurance and Annuity Corporation (NYLIAC) (A Delaware Corporation), a wholly owned subsidiary of New York Life Insurance Company. All guarantees are backed by the claims-paying ability of the issuer.
2. As of April 18, 2012.
3. Bankrate.com, as of April 18, 2012. CD’s are FDIC insured, whereas fixed annuities are guaranteed by the issuing insurance company. CDs are typically used for short to medium-term savings needs, while annuities are typically used for long-term funding needs such as retirement.
4. Tax-qualified plans like (IRAs, SEPs and TSAs) already provide tax deferral under the Internal Revenue Code, so the tax deferral of an annuity does not provide any additional benefit.
5. Withdrawals may be taxable and, if made prior to age 59½, may be subject to a 10% IRS penalty. Surrender charges and an MVA may also apply.
6. An MVA only applies when you surrender or make a withdrawal from the contract that is greater than the surrender-charge free withdrawal amount during the surrender charge period. The MVA will add or deduct an amount from your annuity, or from the withdrawal amount you receive. If the interest rates on which the MVA is based are higher than when the annuity was purchased, the MVA will likely be negative, meaning an additional amount may be deducted from either the annuity or the withdrawal amount. Conversely, if the interest rates on which the MVA is based are lower than when the annuity was purchased, the MVA will likely be positive, meaning money may be added to either the annuity or to the withdrawal amount. The MVA cannot decrease the surrender value of the policy below the premiums paid less prior withdrawals, applicable charges and taxes, accumulated at the guaranteed minimum interest rate as stated in your contract. However, the applicable surrender charges may further reduce the accumulation value below the premium paid or the amount you receive when you make a partial withdrawal or fully surrender the policy. Refer to the New York Life Secure Term MVA Fixed Annuity Examples and Explanation Flyer for more information.
7. Based on revenue as reported by “Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual),” Fortune magazine, May 23, 2011. See http://money.cnn.com/magazines/fortune/fortune500/2011/faq/ for methodology.
8. Source: Third Party Ratings Reports as of 1/25/12.
9. New York Life Investments is a service mark used by New York Life Investment Management Holdings LLC and its subsidiary, New York Life Investment Management LLC.