NEW YORK--(BUSINESS WIRE)--New York Life today announced that its new Guaranteed Future Income Annuity1 (GFIA), a flexible way to generate lifetime income in the future, exceeded $1 billion in premiums since its July 2011 introduction. In the process, the product led the way in establishing a new retirement income market for pre-retirees who want to turn their retirement assets into a lifetime stream of income when they retire.
“Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual)”
“Pre-retirees recognize the value that guaranteed income provided to pension owners in the past and want something like that for themselves. Our soaring sales illustrate the strong demand for pension-like streams of income and the enhanced lifestyle they can provide,” said Matt Grove, vice president in charge of the company’s annuity products. “On the whole, it is people in their mid- to late-50s who are responding to our product because it offers them the ‘retirement income trifecta’: a guaranteed, sustainable way to maintain income in retirement; potentially higher income payments than they could achieve elsewhere; and reduction of some market risk from their overall portfolio during the final years of their pre-retirement, when they can’t afford to endure the consequences of a market downturn.”
The GFIA allows policyholders to set an income start date in the future, at which time they will begin receiving guaranteed income payments for the rest of their lives. Between the initial premium date and the income start date, they can continue to purchase more future income by making additional premium payments, and can defer or accelerate their income start date as their personal needs change.2
The core audience for the GFIA is pre-retirees between the ages of 55 and 65 who plan to retire in five to 10 years. The current payout rate for a 60 year old male who defers for 10 years is over 10%. For example, with a $100,000 premium at purchase, a 60 year old male would receive more than $10,000 a year for the rest of his life starting at age 70. 3 The GFIA is available from New York Life career agents and select investment firms nationwide.
“Two years ago, deferred income annuities were a $50 million market. Today, the market is $1 billion and growing rapidly. We attribute this growth to the increasing awareness that it is possible to create a more abundant and sustainable retirement by investing in your future before you reach retirement age. Our average GFIA customer is 58 years old and planning ahead by purchasing income that will start at 67. Looking forward, over 45 million pre-retirees will enter this market during the next 10 years, so we believe the market has significant growth potential,” added Mr. Grove.
New York Life Insurance Company, a Fortune 100 company founded in 1845, is the largest mutual life insurance company in the United States4 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+).5 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 Investments6 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 Issued by New York Life Insurance and Annuity Corporation (NYLIAC) a wholly-owned subsidiary of New York Life. Available in jurisdictions where approved. Guarantees are subject to contract terms, exclusions and limitations, and the claims-paying ability of NYLIAC. This contract 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. Contracts in which a Life Only payout option is selected do not provide a death benefit either prior to or after the designated income start date.
2 The ability to move the income start date is not available for the Life Only option or in CT. The policy owner can accelerate the start of income payments to any date 13 months after the latest premium payment or defer income payments up to five additional years from the original income start date selected. Additional premium payments can be made up until two years before the income start date.
3 Life Only option, as of February 13, 2013. Annuity payments consist of both interest and return of premium. Payout rates are subject to change and may vary depending on premium amount, age, gender, income option selected and interest rates in effect at policy issue.
4 Based on revenue as reported by “Fortune 500 ranked within Industries, Insurance: Life, Health (Mutual),” Fortune magazine, May 21, 2012. See http://www.money.cnn.com/magazines/fortune/fortune500/2012/faq/ for methodology.
5 Source: Third Party Ratings Reports as of 2/1/13.
6 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.