Lifetime Income Annuity Product Details

Guaranteed to Last a Lifetime
The Lifetime Income Annuity provides protection against outliving your resources. It provides you with a stream of guaranteed income payments for the rest of your life, no matter how long you live. You can also choose from among several alternatives that enable you to structure your income stream to meet your unique needs.

Retirement Challenges
As a retiree or someone close to retirement age, you may have several concerns in addition to making sure your money lasts.

If you're:

• Seeking a way to make sure you don't outlive your income;
• Looking to insulate your income from the ups and downs of the stock market;
• Worried about the effect that inflation may have on your purchasing power;
• Interested in providing a legacy for your heirs;
• Searching for a product that allows you access to money periodically;
• Looking to convert your 401(k) or other employer sponsored plan into a stream of income; or
• Committed to entrusting your future to a financial services leader you can count on,

Income Solutions to Help Provide Peace of Mind
The Lifetime Income Annuity provides:

• Guaranteed payments for your lifetime and, if you desire, the lifetime of a loved one, too;
• Steady income that will not fluctuate with changes in the financial markets;
• An option for your income payments to increase annually to offset the effects of inflation;
• The ability to provide a cash benefit to your beneficiaries if you die prematurely;
• Access to cash¹ in the event of an emergency;
• The convenience of payments that can be sent to you by check or directly deposited into your bank account; and
• The security of knowing your payments are guaranteed by New York Life — one of the strongest financial institutions in the world.²

An Annuity Can Provide Tax Advantages
An income annuity can provide you with tax advantages. The nature of these advantages depends on the type of money you use to purchase your policy:

Tax–qualified annuities are purchased using "pre–tax" dollars you may have accumulated in a 401(k), Keogh, IRA, or other pre–tax savings plan. Tax–qualified annuity payments are fully taxable as ordinary income in the year they are received.

However, rolling a qualified plan into an income annuity rather than taking a lump–sum distribution will spread your tax liability over many years, which may reduce your total tax liability.

An additional benefit gained from purchasing a Lifetime Income Annuity with tax–qualified money is that the income payments you receive automatically satisfy the Internal Revenue Service's requirement that you withdraw Required Minimum Distributions (RMD) from accounts set up under certain tax qualified plans. Your RMD amounts generally must be withdrawn each year after you reach age 70½, and severe penalties are imposed if you fail to withdraw the full RMD amount from your pre–tax plans and policies. A lifetime income annuity may help ensure that you satisfy the IRS' requirements.

(If you choose a minimum guaranteed payment period, it cannot extend beyond your life expectancy, as specified in the IRS' Life Expectancy Table, if you want the payments to satisfy your RMD requirements. Also, if you elect a Joint Life policy covering you and someone other than your spouse, there are additional restrictions that apply in order for your policy to satisfy RMD requirements.)

Non–qualified annuities are purchased using after–tax dollars you may have accumulated in other savings vehicles. Each annuity income payment consists of a taxable income portion, and a return of premium portion, which is not taxable. The division between taxable and "tax–free" portions of the payment is determined by IRS rules based on several factors, including your life expectancy, the premium you paid for your policy (or other "cost basis"), and any guarantees chosen. Once the "tax–free" payments you receive equal your policy's "cost basis," all future payments you receive are 100% taxable as ordinary income.

The Lifetime Income Annuity may allow you to take advantage of a number of tax benefits. However, the tax treatment of annuity income payments is a complex subject that you should discuss carefully with your professional tax advisor, so you will understand how purchasing a lifetime income annuity will impact your personal tax situation.

Your Income Options: Cover One or Two Lives and Leave Your Heirs a Legacy
The Lifetime Income Annuity can address all of your concerns. You can choose from the following³:

Single Life policy provides payments for the remainder of your life, regardless of how long you live. This option provides the highest income for any given premium. However, payments cease upon your death.

Joint Life policy pays an income for as long as you or one other person — usually your spouse — continues to live. If one of you dies, payments will continue to the survivor for the rest of his or her lifetime. Of course, all else being equal, a given premium amount will provide a lower income if it is designed to last for the lives of two individuals, rather than on one life alone. With this option, payments cease after both of you have died.

You also have the flexibility to choose whether the survivor will continue to receive the same income that was paid while both of you were alive or only a portion (40% to 99%) of that amount. You might decide, for example, that if one of you were to die, the survivor would only need 80% of the income that both of you lived on. Choosing this may best meet your needs because a Joint Life policy that pays a smaller income to the survivor will provide a higher income while both of you are alive.

Single or Joint Life with Period Certain pays a lifetime income that lasts for either one or two lifetimes (as above), but it also provides a legacy to your heirs in the event of your premature death. It guarantees a minimum number of years of payments, even if you (or both of you) were to die before the end of that period of time. You select the guaranteed payment period when you purchase your policy.

If you (or both of you, if you've elected a Joint Life with Period Certain policy) die before the guaranteed minimum payment period has elapsed, the remaining guaranteed payments will be made to your beneficiaries.⁴

Single or Joint Life⁵ with Cash Refund pays a lifetime income that lasts for either one or two lifetimes (as above), but it also guarantees that you and your beneficiaries will get back at least the money you paid for your policy.

If you (or both of you, if you've elected a Joint Life with Cash Refund policy) die prematurely, your beneficiaries are guaranteed to receive, in a lump sum, the difference between the premium you paid for your policy and the sum of the payments you received from the policy.⁶

Single or Joint Life with Percent of Premium Death Benefit⁷ pays a lifetime income for one or two lives (as above). However, when you (or both of you, if you've elected a Joint Life with Percent of Premium Death Benefit policy) die, a percentage of your premium payment — either 25% or 50%, which you select when you purchase your policy — is paid out to your beneficiaries in a single sum. This alternative pays a lower income than one that does not provide payments to your beneficiaries. However, it guarantees a legacy for your heirs. Furthermore, the amount your heirs receive will generally not be subject to taxes.

Protect Yourself from the Effects of Inflation
You can also choose our Inflation Protection⁸ feature. If you elect this option, your initial income will be lower, but your payments will increase each year by either 3% or 5% (whichever you select). This annual increase in your income may help neutralize the impact of inflation as your living expenses increase over time. This option must be elected at the time you purchase your policy.

How Your Income Payments are Determined
The factors that determine the amount of the payments you will receive include:

• The amount of your premium and the current interest rate environment at the time you purchase your policy
• The number of lives the policy covers (either one or two)
• Your age and gender (and those of the other person, for joint policies)
• Any guaranteed minimum payment, inflation protection, change in income schedule, or legacy options you select
• The frequency with which you choose to receive your income payments (monthly, quarterly, semi–annually, or annually)
• The date on which your payments are scheduled to begin⁹

Withdrawal Features May Help You Handle Unforeseen Circumstances
Life income annuities generally do not provide access to money beyond the scheduled income payments. However, we understand that unexpected circumstances can cause you to find yourself in need of

money. That's why the Lifetime Income Annuity includes withdrawal features that provide you access to cash in an emergency.

Your policy offers two withdrawal features:

Payment Acceleration¹⁰ is designed for short–term cash needs. This feature enables you to receive the five subsequent payments along with the next monthly payment you're scheduled to receive — for a total of six months of income payments paid to you all at once. Be aware that when you exercise this option, your income payments will not be paid for the next five months. Also, the accelerated payments may be fully taxable.¹¹ Once you are at least 59½ years old, you can use this feature twice during the life of your policy.

Cash Withdrawal¹²is a one–time only withdrawal of money from the contract. The Cash Withdrawal is 30% of the discounted value of the remaining payments expected to be paid to you based on your life expectancy when you purchased your policy or your policy's guaranteed minimum payment period (whichever is longer).¹³ The amount withdrawn may be fully taxable.¹¹ The Cash Withdrawal is only available if the annuity owner is at least 59½ years old. In addition, you can only exercise this option on the 5th, 10th, or 15th anniversary of your first income payment or upon proof of a significant, non–medical financial loss as specified in the policy.¹⁴ Once this option is exercised, future income payments are then reduced by 30%. (Not all of these options are available on all contracts, and in all states or to annuitants of all ages. Ask your insurance professional for details.)

Policy Fees
A policy fee of $325 is deducted from your premium payment as part of the calculation of your income under the Lifetime Income Annuity policy. If applicable, a state premium tax may also be deducted from your premium payment. The policy fee and any applicable state premium tax will be reflected in the calculation of your income payment.

For 160 years, we have conducted our business around the central values of financial strength, integrity, and humanity — and have remained committed to being a mutual company, owned solely by our policyholders. This means that, regardless of the economy, our focus is fixed on just one objective: meeting the needs of our customers, now and far into the future. Talk to your New York Life agent today and find out why New York Life is The Company You Keep®.

New York Life does not offer professional tax, legal, or financial planning advice. Please consult with your own professional advisors before making any decisions.

¹ Withdrawals are only available on non–qualified policies and after you are over age 59½. Withdrawals may be fully taxable.

³ The income option you choose, as well as your age and gender, will affect the amount of each income payment, so be sure to discuss this with your insurance professional.

⁴ If your Joint Life with Period Certain policy includes a survivor income that is less than 100% of the income while both of you are alive, the reduction in income will not take place until the LATER of the first annuitant's death or the end of the guaranteed minimum payment period.

⁵ The Life with Cash Refund option is not available on Joint Life plans where the survivor benefit is less than 100%.

⁶ If the total payments you receive prior to your death equal or exceed the initial premium you paid for your policy, then no further payments will be made to beneficiaries upon your death.

⁷ This income alternative is not available for tax–qualified policies, or in New York and Washington.

⁸ This option may only be elected if you are over 59½ years old at the time of the first payment.

⁹ Income payments generally begin one "mode" after the policy date. If you choose to receive a monthly income, your payments will begin one month after the policy date, whereas if you choose to receive a quarterly income, payments will begin three months after the policy date. You may select a different start date for receiving payments, but payments must begin within one year of the policy issue date.

¹⁰ The Payment Acceleration feature is not available on tax–qualified policies.

¹¹ Please consult with your professional tax advisor.

¹² The Cash Withdrawal feature is not available on tax–qualified policies, or in New Jersey and Washington.

¹³ The Cash Withdrawal amount is subject to an Interest Rate Change Adjustment that will increase or decrease the withdrawal amount based on the change in interest rates, as measured by the 10–Year Constant Maturity Treasury, between the time you purchase your policy and the time you elect to receive the Cash Withdrawal. See the policy for details.

¹⁴ The non–medical financial loss provision is not available in Florida, New York, or California.

New York Life Insurance Company
New York Life Insurance and Annuity Corporation (A Delaware Corporation)
51 Madison Avenue
New York, NY 10010

00270637CV(4/04)

Rate This
Rating: 0/0 (0 votes cast)

  Be the first to Comment