Confusion may arise when an annuity surrender charge schedule ends. Annuity owners may be well versed in bank certificates of deposits (CDs) and may assume that annuities mature similarly to CDs. Like all the material differences between the products, a Fixed Deferred Annuity’s surrender charge period is not comparable to a CD maturity date.
Upon the expiration of bank CDs there is usually a grace period of 7–10 days during which the client may withdraw the funds, or purchase a new CD, or rollover the current CD at the prevailing rate.
When a New York Life Fixed Annuity reaches the end of the surrender charge schedule it works quite differently. First and foremost, it is important to understand that once the surrender charge schedule is over it will never “rollover” or “reset.” Therefore, as per their Policy, when the surrender charge schedule ends:
- The clients’ funds are fully liquid and will remain so for as long as the annuity remains in effect: no further surrender charges will apply. (Client may have tax penalties for withdrawing funds from an annuity prior to age 59½)
- The client will receive a new rate on every anniversary going forward
- That new rate will be at least the Guaranteed Minimum Interest Rate (GMIR) or higher
- The client may not choose between any other terms or rates*
For further information on current rates please contact our Customer Service Center at 800-762-6212.
*The interest rate is an effective annual yield based upon a nominal rate which is compounded daily. After the initial interest rate guarantee period, the policy will receive a renewal interest rate that is guaranteed for one year. The crediting rate will not be less than the GMIR stated in the policy. Rates are subject to change at any time. Renewal rates will never be less than the Guaranteed Minimum Interest Rate (GMIR) declared when the policy was issued. New York Life Fixed Annuities are issued by New York Life Insurance and Annuity Corporation (a Delaware Corporation), a wholly owned subsidiary of New York Life Insurance Company, 51 Madison Ave, New York, NY 10010. All guarantees are backed by the claims-paying ability of the issuer.