Income Plus Variable Annuity

Transcription

1 Just the facts about New York Life... Income Plus Variable Annuity What is the New York Life Income Plus Variable Annuity? 1 Why should I consider Income Plus with the Guaranteed Future Income Benefit (GFIB) rider? Designed for retirement income, the New York Life Income Plus Variable Annuity ( Income Plus ) is a long-term investment vehicle that provides tax deferral, an array of investment options, access to your money (see the Liquidity section on page 5 for limitations), and a death benefit for your loved ones. Income Plus also automatically comes with a free Income Benefit (IB) rider that allows you to use the money in your annuity to purchase guaranteed lifetime income streams that begin when you want them to. But perhaps most importantly, Income Plus provides an optional Guaranteed Future Income Benefit (GFIB) rider that allows you to lock in a guaranteed lifetime income stream that will start on a date of your choosing. It s important to note that there is a cost associated with electing this rider, as well as fees, expenses and risks associated with the policy. Please refer to page 7 for more information on applicable fees and charges. All guarantees, including death benefit payments, are dependent on the claims-paying ability of New York Life Insurance and Annuity Corporation and do not apply to the investment performance or the safety of the underlying investment divisions in the variable annuity. If having enough income in retirement is a priority for you, then Income Plus with the GFIB rider may be just the solution. It provides a guaranteed lifetime income payment that starts on a date of your choosing and is not affected by market fluctuations. This guaranteed income floor provides a cushion against the ups and downs of the market, while helping you generate retirement income that can help cover basic expenses, supplement existing income, or fund retirement goals. However, the Accumulation Value in your account will fluctuate based on the performance of the investment divisions selected. 1 Issued by New York Life Insurance and Annuity Corporation (NYLIAC) (A Delaware Corporation) and distributed by NYLIFE Distributors LLC, Member FINRA/SIPC. Securities are offered through properly licensed Registered Representatives of NYLIFE Securities LLC (Member FINRA/ SIPC), A Licensed Insurance Agency, 51 Madison Avenue, New York, NY NYLIAC, NYLIFE Distributors LLC and NYLIFE Securities LLC are wholly owned subsidiaries of New York Life Insurance Company.

2 Why should I consider Income Plus with the Guaranteed Future Income Benefit (GFIB) rider? (continued) What is the GFIB rider? How does selecting the GFIB rider affect my policy? What are Automatic and Discretionary Income Benefit Purchases, and how do they work? In addition, Income Plus allows you to pursue asset growth via investment options within your policy. We refer to the total value of your investments as your Accumulation Value. If your investments perform well, you may have the ability to increase your original guaranteed income amount or take any remaining Accumulation Value as a lump sum. We like to think of it as Guaranteed Income and the Pursuit of More. Only available at time of purchase, the GFIB rider is an optional rider on Income Plus that provides a guaranteed stream of lifetime income payments. (There is a fee associated with this rider.) When you buy the policy with this rider, you inform New York Life of your income start date (anywhere from 2-40 years from purchase) on which you d like to start receiving income. This time period between when you purchase the policy and when your income payments start is called the deferral period. Based on several factors, including your age, gender, premium amount, interest rate and deferral period, your guaranteed future income amount is quoted to you at purchase. This amount will be paid to you for life, guaranteed. An Income Plus policy purchased with the optional GFIB rider is a single premium product. 2 By selecting this rider, you agree to a certain set of investment guidelines that may affect your Accumulation Value. 3 Your policy will also be subject to fund rebalancing to stay within these guidelines and automatic transfers of money from your Accumulation Value to fund your Guaranteed Future Income Benefit. In addition, choosing this rider may restrict your market growth potential due to limitations placed on the amount of money you can allocate to certain funds. Please refer to page 7 for more information about the investment guidelines. If you select the optional GFIB rider, you agree to a certain set of investment guidelines 3 that helps New York Life manage your contractual guaranteed payment. These guidelines include rules about automatic and discretionary transfers of money called Income Benefit Purchases. There are two kinds of Income Benefit Purchases: Automatic Income Benefit Purchases (only applicable if the GFIB rider has been selected): During the deferral period, your annuity will be monitored on a quarterly basis by a preset, non-discretionary mathematical formula. This formula helps us manage your guaranteed income payment through all market cycles by determining if money should be transferred from your Accumulation Value to fund the GFIB. If the markets don t perform well enough or if interest rates decline, the formula will likely trigger an automatic transfer of money from your Accumulation Value to purchase a portion of the GFIB. 2 If the GFIB rider is cancelled during the policy s life, no additional premium payments will be accepted. 3 The Investment Division restrictions associated with the GFIB rider seek to moderate overall volatility or hedge against downside market volatility. With the purchase of the GFIB rider, the amounts that are allocated to some investment options may be limited to a maximum percentage of the overall allocation, which may limit the potential for higher returns. You should consult with your New York Life Financial Professional and carefully consider whether the Investment Division restrictions associated with the GFIB rider meet your investment objectives and risk tolerance.

3 What are Automatic and Discretionary Income Benefit Purchases, and how do they work? (continued) What if I select the GFIB rider and my Accumulation Value becomes too low? When can I begin receiving income payments? Once an Automatic Income Benefit Purchase occurs, it cannot be moved back into your Accumulation Value. However, once the total amount of Income Benefit Purchases equals your GFIB, no more automatic transfers will take place. Also, no more than 10% of your total Accumulation Value will be transferred per quarter. 4 (In order to guarantee the GFIB, the last transfer at your income start date may be substantially more than 10% of the Accumulation Value.) Depending on market performance, there may not be a need for an Automatic Income Benefit Purchase until right before your chosen income start date. Discretionary Income Benefit Purchases (available with the IB rider, as well as the GFIB rider): 5 During the deferral period, you also have the option of taking money from your Accumulation Value and making a Discretionary Income Benefit Purchase. You might do this to lock in any market gains as a way to fund your GFIB or to purchase income when it s less expensive, like when interest rates are high. (Income Benefit amounts are based on the income purchase rates in effect at the time an Income Benefit Purchase is made.) If you make enough Discretionary Income Benefit Purchases to fully fund your GFIB, then every Discretionary Income Benefit Purchase after that would increase your lifetime income. If you select the GFIB rider, your ability to make Discretionary Income Benefit Purchases may be limited. Please note: Discretionary Income Benefit Purchases are available with a 10-day free look period, meaning you have 10 days to rescind your Income Benefit Purchase without penalty. If poor market performance, declining interest rates, or Automatic Income Benefit Purchases cause your policy to dip in value below what is needed to fund your Guaranteed Future Income Benefit, New York Life Insurance and Annuity Corporation will fund the difference on your income start date. In other words, you ll get what you were guaranteed regardless of market performance. Your guaranteed stream of income will begin on your chosen income start date, which can be any day two to 40 years in the future. However, income payments must begin by age 85 (70½ for tax-qualified policies, after 59½ for Roth IRAs). You choose your income start date upon purchasing Income Plus. If you have any Accumulation Value left on your income start date, you can withdraw some or all of it without affecting your guaranteed income payments (withdrawal amounts may be subject to surrender charges). You might also consider annuitizing any remaining money to increase your guaranteed lifetime income. 4 Based on the previous quarter s ending Accumulation Value. 5 Discretionary Income Benefit Purchases can only occur if the cost to purchase the remaining GFIB that has yet to be funded is less than the Variable Accumulation Value.

4 Can I change my income start date? Can my income payments increase or decrease? How do taxes affect my policy? 6 Retirement plans change. That s why Income Plus comes with a flexible income start date feature that allows you to receive income sooner than originally planned (as soon as 13 months from when you purchased the policy) or later (up to five years after your original income start date). You can exercise this option once. For policies purchased without the GFIB rider, your Income start date can be accelerated to any date 13 months from the policy date or pushed back up to five years from your original income start date. Please note that accelerating your income start date will reduce your GFIB. Depending on market performance, you may have the ability to purchase additional guaranteed lifetime income amounts that would increase your total GFIB. One way your income payments could increase is through Discretionary Income Benefit Purchases during your deferral period (discussed on page 3). If you make enough Discretionary Income Benefit Purchases to fully fund your GFIB, then every Discretionary Income Benefit Purchase after that would increase your lifetime income. 5 After your deferral period, you may also have the ability to convert any remaining Accumulation Value to a guaranteed lifetime income stream that you d receive on top of your original GFIB. This is referred to as annuitization, which means a lump sum of your money is converted into a guaranteed income amount and distributed to you in regular increments over your entire life. The only way your guaranteed income payments can decrease is through your own actions, and not by any negative performance in the market. Actions you could take that would decrease your guaranteed income payments include withdrawing money before your income start date, moving your income start date forward, partial or full annuitization and/or cancelling the GFIB rider altogether prior to fully funding your Guaranteed Future Income Benefit. During the deferral period, any growth in your investments will occur tax-deferred, meaning you won t be taxed on gains until you withdraw the money. (For Roth IRAs, withdrawals are not taxed at all.) This can have a positive impact on your Accumulation Value, as it allows more of your money to work for you. 7 After the deferral period, income payments are taxed as ordinary income. However, if you purchase a policy using non-qualified money (i.e. money that doesn t come from an employer s retirement plan or an IRA), you ll benefit from something called the exclusion ratio. The exclusion ratio represents a portion of your income payment that is simply a return of your initial premium and therefore not taxed. This can help spread your tax liability over many years and reduce it significantly in early years after your income start date. Please note that each income payment will eventually become fully taxable once the cost basis is depleted. 6 Neither New York Life nor its affiliates offer tax advice. Please consult with your own tax advisor about your particular situation. 7 Tax-qualified retirement plans (like IRAs) already provide tax deferral under the Internal Revenue Code, so the tax deferral of an annuity does not provide any additional benefits. Thus, an annuity should only be purchased in an IRA or qualified plan if the client values some of the other features of the annuity and is willing to incur any additional costs associated with the annuity to receive such benefits.

5 Are there liquidity features available? What if my spouse needs income too? Is there a death benefit? 11 Surrender Charge-Free Withdrawals: During each of the years before your income start date, you may withdraw an amount from your policy without paying a surrender charge, which is a fee for withdrawing your money within the first seven years of your policy. Each year you may withdraw the greatest of the following without surrender charges: 10% of the Accumulation Value at the previous contract anniversary, 8 or 10% of the current Accumulation Value, or Current Accumulation Value less premiums adjusted for proportional withdrawals 9 Remaining Accumulation Value: After your income start date, you can withdraw any remaining money in your Accumulation Value without penalty (subject to surrender charges in the first seven years). Please note: Prior to your income start date, withdrawals, partial or full annuitization, or fully surrendering the policy will likely reduce your GFIB. Withdrawals prior to age 59½ may be subject to a 10% IRS penalty tax. Please consult with a professional tax advisor. Payment Acceleration: 10 If you need access to your money for whatever reason after your income payments begin (whether those are through GFIB payments, Income Benefit Purchases or annuitization), you can choose to receive your next scheduled monthly payment, along with seven subsequent payments for a total of eight months of income payments paid all at once. This is called Payment Acceleration. When this option is exercised, income payments will not be paid for the next 8 months. This feature can be exercised three times over the life of the policy. If you need income for more than just one person, you can select a joint-life policy, which will provide a guaranteed lifetime income stream for both you and your spouse. If one member of the couple should die, the living spouse will continue to receive income payments for the remainder of his or her life. Income Plus offers a guaranteed death benefit that passes your remaining policy value directly to your beneficiaries. During the deferral period, beneficiaries would receive the Accumulation Value plus Cumulative Income Benefit Purchases as of the date of death or the premium payment (adjusted for withdrawals), 9 whichever is greater. After the income start date, your beneficiaries would receive the greatest of: The Accumulation Value The Accumulation Value plus Cumulative Income Benefit Purchases less income payments received Adjusted premium payment 9 less the minimum of Cumulative Income Benefit Purchases or income payments received 8 10% of premiums during the 1st policy year. 9 The premium payment made under the policy reduced by any amount equal to the amount withdrawn from the policy (including any amount withdrawn that may include surrender charges), divided by the policy s Accumulation Value immediately preceding the withdrawal, multiplied by the Adjusted Death Benefit Premium Payment immediately preceding the withdrawal. Please see the product prospectus for more information. 10 The Payment Acceleration feature is only available for non-qualified policies with a monthly payment schedule selected. You must also be at least 59½ to utilize this feature. 11 Please refer to the product prospectus for more information on how the death benefit is calculated.

6 What if I don t select the GFIB rider? Can I cancel my GFIB rider after purchasing it? What else should I know about this product? Age limits Minimum initial premium Minimum subsequent premium If flexibility is more important to you than locking in guaranteed lifetime income, you may choose to purchase Income Plus without the optional GFIB rider and enjoy some additional features and benefits: Flexible premium payments 12 allow you to add more money into your policy whenever you d like. Discretionary Income Benefit Purchases (using the Income Benefit rider) can be made at any time to lock in a guaranteed income stream that begins on your income start date. No investment restrictions allow you greater flexibility to choose the funds your assets are invested in. Please refer to the prospectus for more complete information on this feature, as well as information about the product and underlying investment options. If you decide at any time during your deferral period that you no longer want the GFIB rider, you may cancel it. Doing so will cause a 2% fee to be deducted from your Accumulation Value but will also remove the investment restrictions placed on your policy (discussed on page 7). You will also have the ability to make withdrawals from your Accumulation Value without affecting any guaranteed lifetime income you ve purchased through Automatic or Discretionary Income Benefit Purchases. No additional premium payments will be accepted, however, and any GFIB rider fees paid prior to cancelling the rider will not be refunded. In the following section you will find important additional facts about the New York Life Income Plus Variable Annuity. Income Plus is available for the following ages: Non-Qualified: (Income payments must begin by age 85) Roth IRA: (Income payments must begin between ages 59½ and 85) Qualified: 18-68½ (Income payments must begin by age 70½) $10,000 Policy without GFIB Rider: $500 for each additional payment 12 Policy with GFIB Rider: No additional premiums allowed $500 minimum for each additional premium, and each premium has its own surrender charge schedule. 13 If indicated on the application, $5,000 minimum additional premiums are allowed within 60 days of the initial premium.

7 Fees and charges Income Plus has the following fees and charges built into the policy: Mortality and Expense Charge: 1.35%, annualized of the daily average Accumulation Value Fund Fees: Please refer to the fund prospectus for details on fund fees and expenses Annual Policy Fee: $30 (This fee is waived if you sign up for edelivery of all available materials, the Variable Account is fully annuitized, or GFIB payments commence.) GFIB Rider Fee: 1.00% 14 which only applies until your GFIB is fully funded. (This fee is fixed once you purchase the rider, but prior to purchase, this amount is subject to change.) Surrender Charge Schedule: Withdrawals over and above the free withdrawal amount are subject to the following surrender charges (based on date of the last premium payment): Years % of Payment Investment Divisions and guidelines The investment options available with Income Plus include a variety of investment divisions, spanning multiple asset classes, from an array of well-respected asset managers. These investment divisions are divided into three categories, depending on the type of securities they hold. If you purchase a policy with the optional GFIB rider, the amount you may allocate to each category will be restricted. If you purchase the GFIB rider, your investment restrictions are: Group A Fixed Income: At least 30% of your money MUST be allocated to this category. Group B Equity and Fixed Income: You are not required to allocate any of your money to this category; however, if you do, you cannot invest more than 70% within it. Group C Equity: You are not required to allocate any of your money to this category; however, if you do, you cannot invest more than 10% within it. Model Portfolios: Income Plus also offers the simplicity of choosing one of three model portfolios, each consisting of its own combination of pre-chosen funds. These model portfolios range in risk classification from more aggressive to more conservative and automatically satisfy the investment restrictions discussed above. 14 Calculated as an annualized percentage of the Unfunded Income Benefit Base, which is the amount used to determine the Unfunded Income Benefit, which is the amount that has yet to be funded by Automatic Income Benefit Purchases and Discretionary Income Benefit Purchases, if any, and which NYLIAC guarantees, subject to certain transactions, should there be insufficient Variable Accumulation Value to fully fund the GFIB Payments with the Funded Income Benefit. This fee is deducted from the Variable Accumulation Value on a quarterly basis. After the income start date, this fee is not assessed.

8 Investment Divisions and guidelines (continued) Choose from a variety of well-respected asset managers: Additional features and benefits 15 Dollar Cost Averaging Automatic Portfolio Rebalancing 16 Tax-Free Transfers 17 Systematic Withdrawals (only available if GFIB rider is not selected) Automated Required Minimum Distributions (RMDs) New York Life Insurance Company 51 Madison Avenue, New York, NY RB SMRU500257(Exp ) 15 See the product prospectus for more details and availability. 16 New York Life variable annuities offer automatic portfolio rebalancing through the Automatic Asset Reallocation (AAR) feature. AAR required with the GFIB rider. 17 This policy is not designed as a vehicle for market timing. Accordingly, your right to make transfers under the policy is subject to limitation if we determine, in our sole opinion, that the exercise of that right may disadvantage or potentially hurt the rights or interests of other policy owners. Please refer to your prospectus for details. This material is authorized for use by the general public only if preceded or accompanied by effective product and fund prospectuses. The prospectuses describe the features and benefits of the New York Life Income Plus Variable Annuity. Investors are asked to consider the investment objectives, risks, charges and expenses of the investment carefully before investing. The prospectuses contain this and other information about the product and underlying investment options. Please read the prospectuses carefully before investing. Variable annuities are long-term investment vehicles used for retirement savings. There are fees, expenses, and risks associated with this policy. All guarantees, including death benefit payments, are dependent on the claims-paying ability of NYLIAC and do not apply to the investment performance or the safety of the underlying investment divisions in the variable annuity. Please be aware that assets allocated to the investment divisions are subject to market risks and will fluctuate in value. In most jurisdictions, the New York Life Income Plus Variable Annuity policy form number is ICC11-P105 (it may be 211-P105); Guaranteed Future Income Benefit Rider (ICC11-R108) (it may be 211-R108); Income Benefit Rider (ICC11-R109) (it may be 211-R109). Please refer to the product prospectus for more information. The prospectus form number is