1. Guaranteed Income Annuities
Welcome!
This session is designed to build your income annuity expertise. In particular, at the end of this session you’ll be better equipped to identify clients in need of secure retirement income and to identify which New York Life income annuity would best fit into their retirement plan.
ANNUITIES
Are Not FDIC/NCUA Insured
Are Not a Deposit
May Lose Value
Have No Bank Guarantee
Are Not Insured by Any Government Agency
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 Products available in jurisdictions where approved.
INC31a-06/ (Exp. 1/2/14)
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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
First we’ll look at the retirement market, its unique income needs, and how one of New York Life’s Guaranteed Income Annuities can meet those needs. We’ll also spend some time talking about how income annuities are designed – with a specific focus on how income annuities maximize guaranteed income.
We’ll take a closer look at the New York Life Guaranteed Lifetime Income Annuity II, New York Life Guaranteed Future Income Annuity II, and New York Life Guaranteed Period Income Annuity II and how these products provide guaranteed income either immediately or in the future to clients.
Then we’ll give you some successful sales concepts to help share this story.
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 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.
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3. Understanding the Role of Income Annuities in Retirement Planning
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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
Life Expectancy
Healthcare Costs
Asset Preservation
Market Uncertainty
Inflation
Retirees and those a few years away from retirement face a “perfect storm” – a combination of factors that make careful planning for retirement so critical.
At retirement, many clients will face:
Fewer Guarantees than previous generations
Shrinking social security benefits
Fewer pension plans
Higher health care costs
Longer Life Expectancy meaning a potentially longer retirement
Increasing lifestyle costs
These factors can leave a lot unknown. Many have saved for retirement, but do they have a plan in place to ensure that their savings last through their entire retirement?
Read “What if you could help give them…”
Today, we’ll look at why income annuities play such a critical role in planning for retirement, and how they can provide retirement peace of mind.
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5. The Retirement Market Has a Considerable Need for Income
Income Now
Income Soon
Population by Age
Deferred Income Annuities
Immediate Income Annuities
Income Later
Here’s why income annuities are important to you and your clients. There’s a clear business opportunity here.
When we look at the retiree and pre-retiree market, we see that:
Retirees need income now
Pre-retirees need income later. Those further away from retirement still need to consider their future income needs
There’s an income annuity that meets the income needs of these markets – because they’re all planning for income in retirement. We’ll see today how deferred income annuities provide future income to clients who need income later or income soon. Immediate income annuities are a viable option for people who need income now.
You’ll be able to identify clients that would benefit from these products, and then we’ll give you the tools to close the sale.
The looming concern, however, among the retirement market is “Now that I’ve accumulated these assets, how can I make sure they last through my retirement?” This is a valid concern. Retirement poses a number risks – different risks than those faced during accumulation.
Source: LIMRA Analysis of U.S. Census Bureau’s Current Population Survey, March 2009 Supplement
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6. Retirees Face Different Financial Risks During Retirement versus Before Retirement
Accumulation Risks
Investment risk
Sequence of Returns Risk
Longevity Risk
Withdrawal Rate Risk
Distribution Risks
Investment Risk
Sequence of Returns Risk
Longevity Risk
Withdrawal Rate Risk x x x
Retirees face a new set of risks once they’ve accumulated their assets and now need to make them last. The amount of assets held by retirees and pre-retirees is in the trillions. Luckily, income annuities help minimize or eliminate these risks.
Investment risk & sequence of returns risk: Market losses early in retirement can significantly impact your retirement income distribution. These losses can cause the amount of total assets to drop significantly, affecting your future gains. The income generated by income annuities is uncorrelated to the market. Income payments are guaranteed by the issuing company.
Longevity risk: With longer life expectancy, many retirees fear they will outlive their savings. To put it into context, there’s a 50% chance that a healthy 65-year old male will live to 85, a healthy 65-year old female will live to 88, and at least one of them will live to 92. Lifetime income annuities provide guaranteed payments for the annuitant’s entire lifetime. Your client will not outlive their savings. Per Annuity 2000 mortality tables.
Withdrawal rate risk: Common systematic withdrawal plans may not be sustainable. Income annuities provide a structured way to receive guaranteed lifetime income.
Lifetime income annuities provide a way to minimize or eliminate these risks.
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7. Today’s retirees expect more out of retirement.
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8. Income Annuities Provide a Simple Solution for Retirement Income
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9. Key Considerations for Income Annuities
Immediate or deferred income annuities
Guaranteed income for a lifetime or for a fixed period1
Single or joint lives
Stable, reliable cash flow via guaranteed payments2
No market risk
Return of premium in the form of income payments or death benefit
Income payments that can start now or in the future
Investment discretion
Market growth potential
Surrenders, but many income annuities offer liquidity features
Income Annuities Provide:
Income Annuities Do Not Allow for:
First, it’s important to define what an income annuity is.
Income annuities can be classified as immediate or deferred – meaning payments begin within one year of issue, or at a later date.
Depending on the product and option selected, client may receive income for life or for a fixed period. Fixed period annuities are useful when income is needed for a specific period of time. Lifetime income annuities are designed to provide a “pension-like” stream of income that’s guaranteed for life.
Explain chart – what income annuities provide versus what they don’t. It’s important to understand what an income annuity won’t offer a client.
1 Only life contingent income annuities provide income for life. Fixed period income annuities provides income for a certain period only.
2 Guarantees are backed by the claims paying ability of the issuer.
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10. Income Annuities Provide a Simple Solution for Retirement Income
Issuing Insurance Company
Client pays Premium
Guaranteed Income Payments
Age 70
Age ??
Until Age 80
Income annuities are designed to work very simply.
EXPLAIN AND READ SLIDE. There are no subaccounts and no on-going fees. It is a SIMPLE way to contribute to and receive guaranteed income for life.
Also keep in mind that a guaranteed period income annuity is a viable solution for those looking for income for a specific amount of time.
Depending on the product and premium options selected, the client will receive guaranteed income payments:
for a specific period of time (e.g., for 10 years until age 80)
or for a lifetime
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11. 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.
$1M paid to beneficiaries
Annuitant dies before income start date
$118K
paid to
Annuitant
$882K paid to beneficiaries
$1,179,800 paid to Annuitant
($0 paid to beneficiaries)
Annuitant dies 2 years after income start date
Annuitant dies years after income start date
Return of $1M premium
Income payments exceed premium paid.
Many folks’ first concern about annuities is that you lose your money if you die soon. Guaranteed income annuities from NYLIAC come with an ability to select a Cash Refund option (describe example). In fact, the lion’s share of our sales has been with the Cash refund option.
Now that you can be confident that there are ways to receive your premium back, let’s take a closer look at what income payments are comprised of.
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.
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12. 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.
In most instances, lifetime income annuities offer better payouts than comparable fixed income product because the income clients receive is comprised of three components. READ SLIDE
SEGUE: The mortality credit portion is especially beneficial. Mortality credits are the income engine of an income annuity product. Premiums paid by those who die earlier than expected contribute to the gains of the overall pool and provide a higher credit to survivors than could be achieved through individual investments outside of the pool.
It is a mechanism for reallocating the annuity contributions of holders who die to those who survive.
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13. The Anatomy of Income Changes Over Time
This chart demonstrates that as a client ages, their payout amount will remain level, but the portion that comes from interest vs. return of premium vs. mortality credits will change over time:
Earlier on, payments are comprised mostly of return of premium and interest (blue and yellow). Many investments provide income in a similar way.
The key difference with an income annuity is this green area – income annuities provide mortality credits that no other type of investment can give you. Mortality credits is what allows you to maximize your payout while providing income for life. We see here that mortality credits make up the biggest portion of an annuity payment as a client ages.
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.
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14. Mortality Credits Power the Payout Rate
A Simple Way to Understand Mortality Credits1
Year 1
Year 2
Year 3
Year 4
Year 5
Amount to be paid out from Mortality Credit Pool
$500
Clients still living 5 4 3 2 1
Payment per person from Mortality Credit Pool
$100
$125
$176
$250
Cumulative payment for surviving clients
$225
$401
$651
$1,151
To better understand how the money in the mortality credit pool is distributed to clients in their income payments, consider this simplified example.
Keep in mind that this is only an example of how the mortality credit pool works, in terms of distribution to clients, and considers no other factors and benefits such as return of premium and compounded interest. The numbers used here are very simplified and are for educational purposes only, to give you a better understanding of how mortality credits work.
IMPORTANT TO READ BEFORE EXPLAINING SLIDE:
Let’s assume five clients, all the same age, contribute $500 each to the Mortality Credit Pool for a total of $2,500.
At the end of each year, $500 will be distributed among the surviving clients.
EXPLAIN SLIDE.
SEGUE: Let’s look these payouts compared to some other products.
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.
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15. Turn Existing Accumulation Vehicles into Income
Employer Sponsored Plans
401(k)s, 403(b)s
Pensions
Personal Savings & Investments
IRAs
Roth IRAs
Mutual funds/stocks/bonds
Checking/savings/CDs
Other Options
Gifts / inheritances
Deferred annuities
Death benefit proceeds
Read slide.
Depending on the product, income annuities can be funded with a lump sum or with flexible premiums over time.
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16. Taxation of Income Annuities
Funding with Qualified Assets
The entire annuity payment is taxable as ordinary income.
Funding with Nonqualified Assets
A portion of each annuity payment is a tax-free return of basis.
Once all basis has been recovered tax-free, the entire payment is taxable as ordinary income.
Funding with Roth IRAs
Entire annuity payment is not taxable.
No Penalty
For immediate annuities paying over life expectancy, payments received before age 59 ½ are generally not subject to the IRS-imposed 10% penalty.
May Satisfy RMDs
Income annuity payments from qualified contracts may satisfy RMDs each year under the current federal income tax. Client may still be subject to RMDs on qualified funds outside of the income annuity.
This is provided for informational purposes only. Clients should consult with their own tax advisor regarding their specific situation.
Next, let’s point out a few key considerations concerning income annuities and taxation. This may be a refresher for some, but still good to point out.
Read slide.
SEGUE: Now that you’re more comfortable with how income annuities work and how they guarantee income for life, let’s take a look at New York Life’s two lifetime income annuity products – the New York Life Lifetime Income Annuity (also referred to as GLI), and the New York Life Guaranteed Future Income Annuity II.
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17. Income Annuity Product Overview
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18. 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.
For those of you that need retirement income now, New York Life’s Lifetime Guaranteed Income Annuity may be a good fit for you.
It’s a single premium immediate annuity – meaning it offers guaranteed lifetime income starting now or within the next 12 months.
Payout options provide for legacy options, including cash refund, and other ways money will be paid out both before and after death.
These optional features are important –there are options that allow for you to customize your payments, and access your funds in an emergency.
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 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.

19. 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
For those that are a few years away from retirement or want to start building your income stream, GFI gives you retirement income for life with the flexibility of funding it over time, any time up to two years before the income start date, and ability to start receiving income payments in the future.
This gives you the ability to start building their retirement income now to use later.
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.
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20. GFI and GLI Can Provide Retirement Income Security
Can provide guaranteed income for life
An income floor, supporting a sustainable portfolio withdrawal rate strategy
Are not affected by market volatility*
Predictable guaranteed payments and reduced sequence of returns risk, allowing for higher equity allocations
Can take pressure off of a portfolio
Reduced portfolio reliance rate, which may increase legacy potential
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.
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21. … And the Confidence to Spend More
“I wish I could..but I just can’t afford it right now…”
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22. Guaranteed Period Income
New York Life Guaranteed Period Annuity II (GPI)1
Single premium immediate annuity
Minimum initial premium: $5,000
Income Benefit Period of 5 to 30 years
Fixed income payments
Option to elect Annual Increase feature
Death benefit ensures that any remaining payments are paid to beneficiaries
You may want to wait until age 70 to start receiving Social Security benefits, or you may not be eligible for Medicare for a few more years, but you’re ready to retire. Now what? You still need some sort of income. The New York Life Fixed Period Annuity can help provide that income bridge.
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, Guarantees are based on the claims-paying ability of the issue.
Payout amount is determined by amount of premium payment, benefit period selected, interest rate credited by NYLIAC at time of purchase, frequency selected to receive payments, and date payments are scheduled to begin
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23. Income Annuities for Your Clients
Income Need
Most
Appropriate For
Premium Type
Income Annuity Product
Now:
Client can choose to start receiving lifetime income payments immediately or within year of issue.
Over 65
Lump Sum
Guaranteed Lifetime Income
Soon or Later:
Client can choose to start receiving lifetime income payments in two to 40 years.
55-65
Also opportunity for under 55 market
Lump Sum or Flexible Payments
Guaranteed Future Income
For a Specific Amount of Time:
Client will receive income over a pre-determined time period. Payments begin within one year of issue.
Guaranteed Period Income
So now we see that a key driver in deciding which product to go with is deciding if a client needs income now or income soon.
Essentially – when do they want their first check?
Debrief slide.
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24. Proven Sales Concepts & Strategies
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25. Position Income Annuities to Help Meet Client Needs
Effective for both GLI and GFI sales:
Cover Basic Expenses Using Guaranteed Income
Invest Conservatively While Generating Income
Rollover Assets to Generate Income
Protect Against Longevity Risk
Build Your Own “Pension-like” Stream of Guaranteed Income
Effective for GFI sales:
Pre-Fund Life Insurance
Maximize Social Security Payout
Effective
for GPI
sales:
Now we’re going to show you some ways that these products can be put to use. These are proven sales solutions that have been successful and can work for you.
Cover Basic Expenses Using Guaranteed Income: Pay for basic expenses with the guaranteed income from an Income annuity. Pay for discretionary expenses with income and/or sustainable withdrawals from investments.
Invest Conservatively while Generating Income: For those looking to move money out of equities into something more secure, income annuities can provide guarantees while generating income, often at a higher rate than other conservative vehicles.
Rollover Assets to Generate Income: Rolling assets from an IRA or an employer-sponsored retirement plan into an income annuity can turn those funds into a steady, guaranteed stream of income for life, just as intended!
Protect Against Longevity Risk: Because you can rely on guaranteed income for life coming to you, you can strategically plan to spend down other assets over a set amount of time.
Build Your Own Retirement : Contribute level premiums or fund with flexible premiums to create a stream of guaranteed lifetime income like a pension once provided to many.
Pre-Fund Life Insurance: Use GPI to pre-fund the remaining premiums on a life insurance policy for a guaranteed, convenient strategy
Maximize Social Security Payout: Defer until age 70 to maximize social security benefits and fill the gap with an income annuity.
SEGUE: Let’s take a closer look at these.
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26. 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.
Use guaranteed income sources to cover basic expenses. 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.
Use guaranteed income sources to pay for basic expenses. It’s possible that social security and pension benefits won’t be enough – an income annuity can help cover this shortfall.
Use additional income from guaranteed sources plus income from other investments to pay for discretionary expenses.
NOTE: This example uses the Guaranteed Lifetime Income Annuity but the same concept applies to a GFI – the income is just starting later.
* 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.
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27. 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
$300,000
Use $300,000
to purchase a Joint GLI
$19,188
per year for life
Clients who want to move assets into more conservative investments may be best suited to move this money into an income annuity, which may pay out at a higher rate than other conservative income generating vehicles. Plus, these assets will no longer be subject to market volatility and will provide income for life. Payouts include interest and return of premium, other conservative investment options may provide more liquidity.
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.
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28. 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 65
Age 70
Age 75
Age 80
Another way to capture this market is through 401(k) and similar rollovers. This is also a great way to uncover other assets held by your clients.
NOTE: This example uses GFI and demonstrates the power of deferral, but both GLI and GFI great ways to turn these invested assets into what it was intended for – guaranteed retirement income.
* 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.
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29. 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. .
For clients who may be concerned about outliving their assets, the Guaranteed Future Income Annuity II can provide a stream of income starting much later in retirement. This helps to protect against risks that longevity places on a portfolio. Here’s an example:
A 65-year-old retired client has $1 million in assets.
83% of his assets are in a traditional portfolio that he intends to spend down between age 65 and 85.
To ensure he doesn’t outlive his savings, however, he invests 17% of his assets in a Guaranteed Future Income Annuity II at age 65, electing to start receiving income payments at age 85. These payments will last his entire life. Guaranteed.
He plans on enjoying a long retirement and the Guaranteed Future Income Annuity II allows him to spend his money between 65 and 85 without concern for how long he might live.
SEGUE: These next few concepts are especially useful for the GFI product, because you’ll be looking to work with clients who are a few years out from retirement but still concerned with securing their retirement income.
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.
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30. 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.
Age
Premium
Payout Rate
Annual Income for Life at 65 54
$26,250
8.5%
$2,240 55 $0 - 56 57
$11,000
7.8%
$861 58
$15,000
7.4%
$1,117 59
$7,500
7.1%
$532 60
$7,000
6.8%
$474 61
$17,500
6.4%
$1,128 62
$7,650
6.1%
$470 63
8,100
5.9%
$475 64 65
Total
$100K
$7,296
First year tax-free portion of income: $4,502*
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.

31. Annual Income for Life at 70
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.
Age
Premium
Payout Rate
Annual Income for Life at 70 62
$100,000
7.5%
$7,548 63 $0 - 64 65 66 67 68 69 70
Total
$100K
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.

32. Pre-Fund Future Life Insurance Premiums Using Qualified Assets
Consider purchasing GPI and using the guaranteed income payments to fund the remaining premiums on a life insurance policy. This strategy allows a client to:
Pre-fund future life insurance premiums without creating a Modified Endowment Contract (MEC)
Use distributions from qualified assets towards life insurance premiums
Automate premium payments
Eliminate market risk for these assets
Fund future payments at a discount, as the GPI payments include a return of premium and interest
Guaranteed Period Income Annuity ll
Guaranteed Payments to Fund Life Insurance Policy
$11,429 after tax paid annually for 10 years*
The Guaranteed Period Income Annuity can help meet specific income needs. For example, for many, life insurance is a critical component of a sound financial strategy. However, annual payments can be a long-term commitment and it may not be optimal to use qualified assets.
By purchasing a New York Life Guaranteed Period Income Annuity II* (GPI) to fund your remaining life insurance premiums, you can:
READ BULLETS.
New York Life can set up automated payments from a GPI contract to any life insurance policy, regardless of carrier!
* Example is for a 62 year old female, 10 year GPIAII. Rates as of 6/4/2013. Rates are subject to change and may vary depending on length of benefit period chosen. Payments include interest and return of premium. Annual payments pre-tax are $12,224.
Note: Any distributions receive d from a New York Life Guaranteed Period Income Annuity II before age 59 ½ will be subject to a 10% penalty tax, absent an applicable exception. New York Life will report to the IRS distributions received from a GPIA before the owner reaches age 59 ½ as being subject to the 10% penalty tax if the policy is either (a) a Traditional IRA, or (b) a non-qualified policy acquired in a Section 1035 exchange. Clients should speak with their tax advisor if they are considering purchasing this product before reaching age 59 ½.
For Representative Use Only. Not to be reproduced or shown to the public.

33. Use Income Annuities to Maximize Social Security Payout
Social Security benefits can be deferred until age 70. For each year you wait, the benefit amount increases by 8%.1
Income annuities can fill the income gap by providing the necessary income Social Security would have provided.
Consider an individual who can start receiving Social Security benefits of $1,000 a month for life starting at age 62. If benefits are delayed to age 70, monthly income will increase to $1,640.
64% Increase
Many retirees and pre-retirees rely on social security benefits to provide income during retirement. A client can maximize those benefits by deferring payment until age 70.
Here we consider an individual who can start withdrawing Social Security benefits of $1,000 a month for life starting at age 62. If withdrawals are delayed to age 70, monthly income will increase to $1,640.
An income annuity can be used to bridge the gap between retirement and age 70, providing the income that social security would have provided or a similar level of income.
Figures provided by
1 Income increase rate is subject to the individuals date of birth.
Figures provided by
For Representative Use Only. Not to be reproduced or shown to the public.

34. 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 ratings for 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 discipline designed to 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
By creating plan that includes guaranteed income for life, you are giving your clients retirement peace of mind.
At NYL, financial security is what we do! NYL is in a unique position to give people in retirement the guaranteed income they need.
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SEGUE: We’d like to set you up for success – and here are a few simple steps to get started:
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.

35. Putting It All Together
Who
Which of your clients are concerned about generating and securing guaranteed income for their retirement?
When
When will they need income? Are they retired, retiring in the next few months, or the next few years? That will help you decide which product is best for their needs.
How
Discuss which of your client’s assets may be most appropriate to use to fund an income annuity. 1 2 3
For Representative Use Only. Not to be reproduced or shown to the public.

36. Thank You
As always you have your sales support team ready to help you with any questions or concerns you might have.
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.

37. The Power of Planning

38. Sam and Sarah Want to Maximize Social Security
His Social Security Benefit at Age 70 is $600 More
Sarah’s 56 and Sam’s 60
They want to retire in 6 years
But Sam may need work part time until age 70 so they can maximize Social Security benefits

39. Rollover to purchase GFI
Helping Clients Delay
During retirement planning session…
Sarah mentions her old 401(k) worth $100,000
Advisor suggests she rollover into a Joint Guaranteed Future Income Annuity to help delay
Income begins… 66
$600 67
$600
$100,000
Rollover to purchase GFI 68
$600
6 Year Deferral Period 69
$600 70
$600
And lasts for the rest of their lives!
Age 56 & 60
Please Note: This hypothetical example is for illustrative purposes only. Illustration is based on market rates as of 4/28/2014 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.

40. Benefits of Retirement Planning with Guaranteed Future Income
For Clients
Turns a retirement account for one spouse into income covering both lives
Income payments cover RMDs for the asset
Payout rate is hard to beat
For Advisors
Use rollover to help clients consolidate and capture greater share of wallet
Creative planning ensures loyal clients and referrals
For Representative Use Only. Not to be reproduced or shown to the public.