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Guaranteed Income Annuities

Guaranteed Income Annuities.

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Guaranteed Income Annuities

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  1. Guaranteed Income Annuities The New York Life Guaranteed Lifetime Income Annuity II, the New York Life Guaranteed Future Income Annuity II, and the New York Life Guaranteed Period Annuity II are issued by New York Life Insurance and Annuity Corporation (NYLIAC), a Delaware corporation, a wholly-owned subsidiary of New York Life Insurance Company, 51 Madison Ave, New York, NY 10010. Products available in jurisdictions where approved. INC31a-06/13 474957 (Exp. 1/2/14) For Representative Use Only. Not to be reproduced or shown to the public.

  2. Agenda • Understanding the Role of Income Annuities1 in Retirement Planning • Income Annuities Provide a Simple Solution for Retirement Income • Product Overview and Proven Sales Concepts Guaranteed income annuities refer to the New York Life Guaranteed Lifetime Income Annuity II , New York Life Guaranteed Future Income Annuity II, and New York Life Guaranteed Period Annuity II which are issued by New York Life Insurance and Annuity Corporation (NYLIAC), A Delaware Corporation, a wholly owned subsidiary of New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010. Products available in jurisdictions where approved. All guarantees are subject to contract terms, exclusions and limitations, and the claims paying ability of NYLIAC (a Delaware Corporation). GFI contract is irrevocable, has no cash surrender value and no withdrawals are permitted prior to the income start date. Income payments are guaranteed at least as long as the annuitant is living, provided the annuitant is alive on the chosen income start date. Certain payout options will not provide a death benefit either prior to, or after, the designated income start date. Please remember to provide a copy to your clients so they have complete information prior to making any decision to purchase this product. For Representative Use Only. Not to be reproduced or shown to the public.

  3. Understanding the Role of Income Annuities in Retirement Planning For Representative Use Only. Not to be reproduced or shown to the public.

  4. Plan for the “Perfect Storm” of Retirement • What if you could help give them financial security in this uncertain environment by: • Providing your clients with guaranteed income • Eliminating the worry of outliving assets • Helping to ensure basic income needs are met, allowing for greater investment flexibility For Representative Use Only. Not to be reproduced or shown to the public.

  5. The Retirement Market Has a Considerable Need for Income Population by Age Deferred Income Annuities Immediate Income Annuities Income Later Income Soon Income Now Source: LIMRA Analysis of U.S. Census Bureau’s Current Population Survey, March 2009 Supplement For Representative Use Only. Not to be reproduced or shown to the public.

  6. Retirees Face Different Financial Risks During Retirement versus Before Retirement Distribution Risks • Investment Risk • Sequence of Returns Risk • Longevity Risk • Withdrawal Rate Risk Accumulation Risks • Investment risk • Sequence of Returns Risk • Longevity Risk • Withdrawal Rate Risk x x x Lifetime income annuities provide a way to minimize or eliminate these risks. For Representative Use Only. Not to be reproduced or shown to the public.

  7. Today’s retirees expect more out of retirement. For Representative Use Only. Not to be reproduced or shown to the public.

  8. Income Annuities Provide a Simple Solution for Retirement Income For Representative Use Only. Not to be reproduced or shown to the public.

  9. Cash Refund Payout Option Allows for Return of Premium What if the annuitant dies soon after buying the annuity? Lifetime income annuities with a “cash refund” payout option guarantee that the policyowner(s), or their beneficiaries, will receive the premium back, no matter what. Cash Refund Payout Option1 $1,000,000 premium at a 5.9% Payout ($58,988 annual income). Payout includes both interest and return of premium. Return of $1M premium $118K paid to Annuitant $882Kpaid to beneficiaries Annuitant dies2 years after income start date $1Mpaid to beneficiaries Annuitant diesbefore income start date $1,179,800paid to Annuitant ($0 paid to beneficiaries) Annuitant dies 20 years after income start date Income payments exceed premium paid. 1 GLI with Cash Refund option, male age 65, $1,000,000 premium,. Rates are as of 6/4/2013 and are subject to change. Provides income payments beginning on the income start date and guaranteed for one life (or two lives if a Joint Life policy). This option guarantees that, if the annuitant (or both annuitants for a Joint Life policy) dies before the income payments received equal the premium paid, the beneficiary(ies) will receive a lump sum equaling the premium, less all income payments received. If the total payments received prior to annuitant’s death equal or exceed the premium paid for the policy, no payments will be made to beneficiaries upon death. For Representative Use Only. Not to be reproduced or shown to the public.

  10. The Income-Generating Power of Income Annuity Payout Rates Payout rates are not interest rates. Income payments are comprised of: • Return of Premium • Each payment includes the return of a portion of the original premium made by the policy owner. 3. Mortality Credit Each payment includes income that is directly linked to the current age of the annuitant. This income comes from the mortality credit pool. 2. Interest There is a portion of each payment that comes from interest earned from the insurance company’s investment of premiums. For Representative Use Only. Not to be reproduced or shown to the public.

  11. The Anatomy of Income Changes Over Time Source: New York Life actuarial data and methodology. GLI payments based on rates as of 8/3/12, and are subject to change. Graphical representation based on an example introduced by Dr. David Blake. Lifetime income annuities can deliver higher payouts because they subsidize those who live longer with the capital of those who don’t live as long (mortality credits), in addition to distributing interest and premium. For Representative Use Only. Not to be reproduced or shown to the public.

  12. Mortality Credits Power the Payout Rate A Simple Way to Understand Mortality Credits1 A client’s payout from the mortality credit pool will increase with age. Mortality credits are designed to provide income should you live beyond life expectancy. 1 This example only considers the mortality credit pool and no other factors. Figures used are for simplified illustrative purposes only. Assume zero interest and zero inflation. For Representative Use Only. Not to be reproduced or shown to the public.

  13. Turn Existing Accumulation Vehicles into Income For Representative Use Only. Not to be reproduced or shown to the public.

  14. Income Annuity Product Overview For Representative Use Only. Not to be reproduced or shown to the public.

  15. Guaranteed Lifetime Income New York Life Guaranteed Lifetime Income Annuity II (GLI)1 • Single premium immediate annuity • Minimum initial premium: $5,0002 • Lifetime Payment Options • Lifetime income options (single or joint) that may include legacy protection • Optional Features to Meet Your Needs3 • Optional features to allow for payments to increase in the future and can provide for inflation protection • Cash Withdrawal Features3 • Available to provide flexibility and access to funds if needed. • Issued by New York Life Insurance and Annuity Company, a wholly owned subsidiary of New York Life Insurance Company, 51 Madison Avenue, New York, NY 10010. Product and optional features available in jurisdictions where approved. Guarantees backed by the claims-paying ability of the issuer. Payout amount is based on premium amount, age and gender of annuitant(s), interest rate environment at time of issue, payout options chosen and date of first income payment. • Minimum premium payments may vary by state or payment option. • Some restrictions may apply. Withdrawals may be subject to taxes and penalties. For Representative Use Only. Not to be reproduced or shown to the public.

  16. Guaranteed Future Income New York Life Guaranteed Future Income Annuity II (GFI)1 • Flexible premium deferred income annuity • Minimum initial premium: $5,000 • Lump sum or flexible premiums* • Flexible income start date • Two to 40-year deferral period2 • Ability to accelerate or defer income payments3 • Lifetime Payment Options • Lifetime income options for single or joint lives. • Optional Features to Meet Your Needs2 • Optional features to allow for payments to increase in the future and can provide for inflation protection • Guarantees are subject to contract terms, exclusions and limitations, and the claims paying ability of the issuer, New York Life Insurance and Annuity Corporation, (NYLIAC), a Delaware Corporation, a wholly-owned subsidiary of New York Life Insurance Company. This contract is irrevocable, has no cash surrender value and no withdrawals are permitted prior to the income start date. Income payments are guaranteed at least as long as the annuitant is living, provided the annuitant is alive on the designated income start date. Certain payout options will not provide a death benefit either prior to, or after, the designated income start date. Please remember to provide a copy to your clients so they have complete information prior to making any decision to purchase this product. • Some restrictions may apply. • Can accelerate to any data 13 months after the latest premium payment or defer income start date to 5 years from the original start date. May e exercised once. Restrictions apply. Not available in CT or on certain payout options. • * Future income amounts are based on rates in effect when each premium is received. Minimum initial premium $5,000 and Minimum subsequent premiums $100. For Representative Use Only. Not to be reproduced or shown to the public.

  17. GFI and GLI Can Provide Retirement Income Security Income Annuities: Portfolios containing them include: *Income Annuities are uncorrelated to equity and bond markets. Because the income stream is guaranteed and does not fluctuate, an income annuity has a standard deviation of zero. Remember these payments are always backed by the claims paying ability of the insurer and do not rise with inflation unless specified. Standard deviation is a statistical measure of how much variation there is from the average of a quantity. For Representative Use Only. Not to be reproduced or shown to the public.

  18. … And the Confidence to Spend More “I wish I could..but I just can’t afford it right now…” For Representative Use Only. Not to be reproduced or shown to the public.

  19. Income Annuities for Your Clients For Representative Use Only. Not to be reproduced or shown to the public.

  20. Proven Sales Concepts & Strategies For Representative Use Only. Not to be reproduced or shown to the public.

  21. Position Income Annuities to Help Meet Client Needs Effective for both GLI and GFI sales: Pre-Fund Life Insurance Maximize Social Security Payout Effective for GFI sales: Effective for GPI sales: For Representative Use Only. Not to be reproduced or shown to the public.

  22. Cover Basic Expenses Using Guaranteed Income Use guaranteed income sources to cover basic expense. It’s possible that Social Security and pension benefits won’t be enough – an income annuity can help cover this shortfall. In this example, consider a 65-year-old man who needs $65,000 a year to cover his basic expenses in retirement. His pension and Social Security benefits will guarantee him $36,000 per year, but he still needs an additional $29,000 per year to cover his basic expenses. * This example is for illustrative purposes only and is based on a Guaranteed Lifetime Income Annuity, Life-Only policy for a male age 65 years old. This example assumes an annual income of $29,000 beginning one year after the policy is purchased. Annual income amounts are based on rates in effect as of 5/6/2013. Rates are subject to change, and payout amount will vary depending on premium amount, age, gender, the number of lives the policy covers (either one or two), and payment option. Actual amounts are dependent on interest rates in effect when the policy is purchased. Other payment options are also available. Annuity payments consist of interest and return of premium. For Representative Use Only. Not to be reproduced or shown to the public.

  23. Invest Conservatively While Generating Income • Clients who want to move a portion of their assets into more conservative investments to generate retirement income, may be better suited to purchase an income annuity. • Income annuities may pay out at a higher rate than other conservative income generating vehicles because each payment consists of interest and return of premium. Plus, these assets will no longer be subject to market volatility and will provide income for life. Total Income $498,892 at age 100 $100,000 $19,188 per year for life Use $300,000 to purchase a Joint GLI $300,000 1 Annuity payout based on a husband and wife, both age 75, GLI with Cash Refund, rates as of 6/4/2013. Rates are subject to change, and payout will vary with age and life expectancy. Actual amounts are dependent upon interest rates in effect at time of policy issue. This hypothetical example is for illustrative purposes only. Guarantees are subject to the claims paying ability of the issuer. 2 For illustrative purposes only. In a joint life policy, this is the projected sum of all future payments if the younger annuitant lives to age 100. Payments will continue beyond age 100 if the annuitant is alive. For Representative Use Only. Not to be reproduced or shown to the public.

  24. Rollover Assets in 401(k) to Generate Income • Turn “idle” money into guaranteed retirement income. And by rolling over money earlier, clients can take advantage of the power of deferral. A $100,000 rollover in GFI at age 59… …generates annual income of $7,619 for life, with payments starting at age 65. * * * * * * * * * * * * * * * * * * Age 75 Age 80 Age 65 Age 70 * Estimated based on data from Cerulli, Quantitative Update (2010) and IRA Rollover and Retention (2008). Please Note: This hypothetical example is for illustrative purposes only. Illustration is based on effective rates as of 6/4/2013 for Life with a Cash Refund payout option, for a male age 59. Rates are subject to change and payout will vary with age, gender, payout option selected and premium amount. Actual amounts are dependent upon interest rates in effect at time of policy issue. Income payments include return of premium, interest and mortality credits. For Representative Use Only. Not to be reproduced or shown to the public.

  25. Protect Against Longevity Risk By ensuring guaranteed income for life starting later in retirement, other assets can be strategically spent down. This may allow a client to do more with those assets because there is no longer a longevity risk associated with that money. 38% payout rate after 20 year deferral Income amounts include interest, return of premium, and mortality credits. . Please Note: This hypothetical example is for illustrative purposes only. Illustration is based on rates as of 5/20/2013 with a Life with a Cash Refund option. Rates are subject to change and payout will vary with age, gender, payout option selected, and premium amount. Actual amounts are dependent upon interest rates in effect at time of policy issue. Income payments include return of premium, interest, and mortality credits. Income shown from age 65 to age 85 is based on a hypothetical systematic withdrawal from the $830,000 portfolio. For Representative Use Only. Not to be reproduced or shown to the public.

  26. Clients can Build Their Own “Pension-like” Stream of Guaranteed Lifetime Income with Flexible Premiums Flexible premium payments and schedules allow clients to invest in GFI over time. • Client does not have a pension plan through work. • She chooses to invest over time, much like a 401(k) or an IRA1, and makes premium payments when they make sense for her while she works. • She elects to have income payments start at age 65. • When she’s ready to retire, she will have invested $100,000, which will generate a guaranteed stream of income that will last the rest of her life. Great for small business owners! Please Note: This hypothetical example is for illustrative purposes only. Illustration is based on market rates as of 1/2/2013 for a Single Life with a Cash Refund payout option. Rates are subject to change and payout will vary with age, gender, payout option selected and premium amount. Actual amounts are dependent upon interest rates in effect at time of policy issue. Income payments include return of premium, interest, and mortality credits. *Over time, the premium will be returned and 100% of the income payment will be taxable. 1 Each premium payment will receive the payout rate in effect at the time the payment is received and will generate a percentage of the total annual payout). For non-qualified policies, premiums do not have the same tax advantages as qualified retirement plans such as 401(k)s and IRAs. For Representative Use Only. Not to be reproduced or shown to the public.

  27. Clients can Build Their Own “Pension-like” Stream of Guaranteed Lifetime Income with Flexible Premiums Benefit from higher payout rates by deferring the income start date. • Couple uses a portion of their portfolio to invest $100,000 into a Guaranteed Future Income Annuity Joint Life Policy. • By deferring their income start date to age 70, not only will they maximize their income, but they can also satisfy the RMD for this portion of qualified assets. Please Note: This hypothetical example is for illustrative purposes only. Illustration is based on market rates as of 1/2/2013 for a Joint Life with a Cash Refund payout option. Rates are subject to change and payout will vary with age, gender, payout option selected and premium amount. Actual amounts are dependent upon interest rates in effect at time of policy issue. Income payments include return of premium, interest, and mortality credits. For Representative Use Only. Not to be reproduced or shown to the public.

  28. At New York Life, Providing Financial Security is What We Do • NYLIAC, and its parent company New York Life Insurance Company, have received the highest ratingsfor financial strength currently awarded to any life insurer by all four major ratings agencies.* • At the New York Life family of companies, our strategy is to invest with long-term disciplinedesignedto withstand market turmoil. • Actuarial expertise is a core business competency, so we can design guaranteed financial solutions backed by the claims paying ability of the issuing company 1 of 3 Out of 1,000 insurers, New York Life is one of only three that has earned the highest ratings awarded to any life insurer. *Source: Third Party Rating Reports (as of 6/10/13) For Representative Use Only. Not to be reproduced or shown to the public.

  29. Putting It All Together 1 2 3 For Representative Use Only. Not to be reproduced or shown to the public.

  30. Thank You Under the terms of the contract, a payout option, once selected, is irrevocable after the free-look period has ended. The New York Life Guaranteed Lifetime Income Annuity II , the New York Life Guaranteed Period Income Annuity II and the New York Life Guaranteed Future Income Annuity II cannot be surrendered.

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