A Transparent Review of the New York Life Flexible Premium Variable Annuity III

Notice:  This is a long article about a specific annuity, the New York Life Flexible Premium Variable Annuity III.  If you are not currently considering this annuity as a vehicle to implement part of your financial plan, then you have no need to read this.  But, if you are thinking about purchasing this annuity then you are in the right place!

Last updated - December 2019

Disclaimer:  Although I am a fee-based Certified Financial Planner®, I also am licensed to sell insurance based products which pay commissions.

  • Can I sell this particular annuity?  Yes
  • Will I be making a recommendation to buy or not buy this annuity in this article?  No
  • Before reading this article I encourage you to download the complete product prospectus and fund prospectuses so you have all the facts at your fingertips.
  • This post is not a solicitation for you to buy this product.  However, if this article affects in a sale of this variable annuity, it will be in my capacity as a Registered Representative of NYLIFE Securities LLC, a licensed insurance agency and a wholly owned subsidiary of New York Life Insurance Company.  As a Registered Representative of NYLIFE Securities I can only offer variable annuities offered by New York Life or its subsidiaries.  I am licensed to offer securities in the states listed in the footer of this page.   

How an Annuity Review Can Help You

Frequently I get questions from clients and people visiting my website about annuities.  In a nut shell, variable annuities represent a contractual agreement in which payments are made to an insurance company, amounts are then invested in variable investment options.

The annuity’s account value is not guaranteed and will be based upon the investment performance of the investment options that the client invests in as well as any fees and expenses that the annuity is subject to.  You may choose to annuitize your account value, you may make partial withdrawals or a full withdrawal.  Annuities may also offer optional benefits for additional fees.  Optional benefits can include a guaranteed minimum account balance payable at a future date if your account value is below the guarantee as well as a guaranteed minimum death benefit.  Although annuities have been around in some shape or form for hundreds of years there has been a sharp increase in their use in the last decade.

  • The stock markets are at record highs with volatility along the way, remember 2008?  This has given investors more reasons to question the soundness of investing in stocks, mutual funds, etc.
  • The largest generation in history, the baby boomers, are retiring at a rapid rate.  They are concerned about their retirement income and are looking for ways to generate it.
  • Given the additional guarantees and income options annuities can provide there has been increased interest in their use for accumulation and retirement income options given the above two points.

Given the increased interest for annuities the companies that manufacture and sell them have spent considerable resources to create new types of annuities that offer more investment options, income benefits, guarantees, etc.  There are so many variables now that it can truly make your head swim trying to make sense of them all.  Unfortunately, due to this complexity it is difficult for consumers to figure out how they work and if they would be the right solution for your needs!

People who are considering purchasing an annuity want and should have all the facts before making a purchase.  The problem is that variable annuities can be very confusing, and it is hard to find the public materials available for review, thus making the process of buying a variable annuity rather overwhelming.

This annuity review is different.  It is 100% transparent.  It is giving you the facts to help you figure out if it is right for you when meeting with your financial professional.  I will cover the following for the New York Life Flexible Premium Variable Annuity III:

  • Type of product
  • Financial Ratings of Issuing Company
  • Uses
  • Investment options
  • Withdrawal Options
  • Death Benefit
  • Additional features & benefits
  • Optional riders for purchase
  • Fees

The objective of reviewing the New York Life Flexible Premium Variable Annuity III is to offer a transparent and plain English review.  Digging into each of these areas is the best way, in my opinion, that you can learn about this annuity versus possibly only hearing some of the facts in a sales situation.

For readers who are coming to my website for the first time, thank you!  I am a CERTIFIED FINANCIAL PLANNER® professional and Founder of my firm, Intrepid Wealth Partners*.  In working with any potential client, I always start with an objective financial plan, not a product or sale.  Contrary to a lot of fee only advisors I think variable annuities can have a place in a person’s financial plan, regardless of whether or not you work with a financial planner, when they meet the specific needs of the individual.  My goal is to provide you an objective review so you can educate yourself, enabling you to make a better decision for your financial future.

Disclosure:  I am writing this article as an objective review of the New York Life Flexible Premium Variable Annuity III.  It is not a recommendation to buy or sell an annuity.  It is recommended before making any financial product or service purchase that you consult with your own legal & tax advisors.

The New York Life Flexible Premium Variable Annuity III

The following is an objective review of the New York Life Flexible Premium Variable Annuity III.  It is sold in all 50 states, mainly through the agency distribution system (in other words, sold by New York Life Agents who are also Registered Representatives of NYLIFE Securities LLC.)

Perhaps you have met with a New York Life agent after being invited for a free review after a seminar.  You meet with them, they conduct the free review, and then come back and may recommend that you purchase the New York Life Flexible Premium Variable Annuity III as a potential solution, among other products & services, for you to save money for your future retirement needs.

I have seen this situation play out countless times over my career.  I am not saying this process is bad or that the product is bad.  Annuities have their place, but they certainly are not for everyone.

There is a lot of misinformation out there about annuities.  The information in this article was gathered from public sales material and the product prospectus.  . Please consider the charges, risks, expenses, and investment objectives carefully before purchasing a variable annuity. For product and fund prospectuses containing this and other information, please contact a financial professional. Read the prospectuses carefully before you invest or send money

This review should give you enough information to help you make an informed decision on whether or not the New York Life Flexible Premium Variable Annuity III fits into your financial plan.  It may be exactly what you need, or it may be exactly what you don’t need.  Time to jump in and look at the details!

Product:  New York Life Flexible Premium Variable Annuity III

Type of Product:  Individual flexible premium variable annuity

Issued By:  New York Life Insurance & Annuity Corporation (NYLIAC), A Delaware Corporation and a wholly owned subsidiary of New York Life Insurance Company

Financial Strength Ratings: Ratings for NYLIAC and New York Life Insurance Company are as of 9/12/2019 and are subject to change. While any guarantees associated with a variable annuity are based upon the claims paying ability of the issuer, the rating has no bearing on the money invested in the investment options which will be subject to market risk. 

A.M. Best Company

A++ (1: Top rating offered)

Standard & Poor's

AA+ (2: Second best rating offered*)


Aaa (1: Top rating offered)

Fitch Ratings

AAA (Top Rating Offered)

*The highest rating currently awarded by S&P to any life insurer.

Phone Number:  1-800-225-5695
Website:  www.newyorklife.com

Features & Options

Some key features and options are as follows:

Investment Options:  

Over 50  different investment divisions, also known as sub-accounts, plus a guaranteed fixed account (backed by the general assets of the issuer).  The range of investment divisions provides exposure to a wide range of asset classes, and they also offer model portfolios (referred to as Asset Allocation Models in the prospectus) if you don’t want to pick the individual investment options yourself.

Withdrawal Options:

Annuities are meant to be long term financial products, yet life happens and it may be important to you to be able to access your money when needed.  The following options are available to withdraw funds from your annuity:

  • Each policy year you may withdraw, with no surrender charges, the greatest of the three options below:

1.    10% of your account value as of the last policy anniversary (10% of the premium if the withdrawal is made in the first policy year) less any withdrawals already made during the policy year.
2.    10% of the account value at the time of withdrawal less any withdrawals already made during the policy year.
3.    100% of the gains at the time of withdrawal.

Withdrawals over and above the free withdrawal amount are subject to surrender charges as shown below in the table in the section labelled "Base Fees".  Withdrawals prior to age 59 ½  may be subject to a 10% IRS penalty tax (25% penalty in the case of a withdrawal from a SIMPLE IRA within the first two years).

Death Benefit:  

Unless you annuitize your policy, the death benefit guarantees that your beneficiaries will receive the greater of:

  • The account value less any applicable balance.
  • The money you invested (which is the total of all premiums paid) adjusted for any applicable loan balance, withdrawals and applicable policy or rider charges.

One-time death benefit step-up:  The opportunity for a one-time death benefit step-up, if applicable, is available at the end of the surrender charge period at no additional charge.  The policy anniversary immediately following the expiration of the surrender-charge period, your death benefit will be stepped up to the account value at that policy anniversary if that value is higher than the policy's initial death benefit as described above.

*All guarantees, including death benefit payments are dependent on the claims-paying ability of NYLIAC and do not apply to the investment performance of the underlying investment divisions.


 Additional Features & Benefits:

This annuity has some valuable features that are included at no additional cost (see the prospectus for complete details).  Here they are:

  • Living Needs Benefit/Unemployment Rider:  This rider provides for an increase in the amount that can be withdrawn from your policy without a surrender charge when certain qualifying events occur.
  • Dollar Cost Averaging Advantage Account (DCAA):  The DCAA account allows for you to put your premium in an account earning a fixed interest as your money is invested in equal monthly installments into the investment divisions you choose.  Using this could be an effective way to invest into the markets over time instead of all at once.
  • Automatic asset rebalancing:  Allows you to automatically maintain the percentage of your account value allocated to each investment division at a pre-set level.
  • Dollar-cost averaging
  • Interest sweep:  Allows you to invest your money into the fixed account and then sweep the interest it earns into the allocation options you choose.
  • Tax-free transfers':  When you move money around within your account it is done so without incurring taxes at that time.  (certain restrictions do apply)
  • eDelivery credit:  NYLIAC is required to send you, free of charge, annual updates to the prospectus, as well as annual and semi-annual financial reports from the portfolios.  However, if you register to have these documents sent to you electronically, NYLIAC will apply $30 e-delivery credit to your account value in the policy year in which you register.
  • Systematic withdrawals:  Allows you to set up periodic withdrawals from your policy.
  • Automated required minimum distributions (RMDs):  It will determine your RMD for the year and then let you choose when to take it out or to set it up automatically.


Optional Riders Available for Purchase:

Annual Death Benefit Reset Rider:  

The Annual Death Benefit Reset (ADBR) Rider is an optional benefit that may enable your beneficiaries to receive a larger amount than the standard death benefit your variable annuity would otherwise provide.  The current annual cost is 0.25% of the reset value(There is no additional charge for the standard death benefit).  This rider should be purchased only if you intend to hold the annuity contract for your lifetime since if you surrender the contract your beneficiaries will not get the stepped up death benefit.  This rider should only be purchased if you do not plan on taking withdrawals from the contract, including RMD withdrawals, since withdrawals will reduce the guarantee in the same proportion as the withdrawal reduced your account value.  This can be more than the dollar amount of the withdrawal.

*Click here for the rider fact Sheets and prospectuses for more details and availability.

Fees for the New York Life Flexible Premium Variable Annuity III:

There is a bit to this so please bear with me.  First you should know that the New York Life Premier Plus Variable Annuity II has 3 different types of fees plus a surrender charge (more on this just below).  These fees are as follows:

1.    Mortality & Expense Charge (M&E):  This fee is charged by the issuing company to compensate them for the various risks it assumes under the annuity contract, such as converting the balance to an income stream based on the policy owners (annuitants) life expectancy.

  • The M&E for this annuity has two options, both of which become less expensive after the surrender charge period is over.  The option must be chosen when the annuity if purchased and cannot be changed.
  • Level M&E fee structure:  1.40% on adjusted premium payments (1.20% after the surrender charge period)
  • Traditional M&E fee structure:  1.30% on variable account value (1.10% after the surrender charge period)

2.    Annual Policy Charge:  For this specific annuity it is $30 a year, but is waived if you have over $50,000 invested in it.
3.    Sub-Account (investment options) underlying fees:  These are the fees charges by the money managers for each sub-account for things including money management, administration and other expenses.

  • You will not actually see these fees come out of your account, instead they are reflected in the accumulation unit values of the chosen investment divisions.  You can find the fees for each sub account in the prospectus.

4.    Surrender Charge:  The surrender charge is a penalty charged to your account should you decide to withdraw more than the allowed amounts mentioned earlier in this post or cancel your annuity before the initial surrender charge period is finished.  The following table illustrates the years and respective %’s that could be charged:

New York Life Flexible Premium Variable
Annuity III Surrender Charge Schedule



Payment Years











Surrender Charge












Unlike certain other annuities,  surrender charges are calculated from the policy date instead from the date of each premium payment..  In other words, even if you add money to this contract in year 10, there are no new surrender charges.

Hypothetical Example

If you have made it this far, congratulations!  This is a ton of information and has probably started to give you a headache!  Feel free to take a break, grab a snack, and come back to see how all this works.  Due to regulations I cannot provide a sample illustration unless it is in it's entirety, which would be very lengthy!  .  If we ultimately meet to discuss this variable annuity, I can provide you with a personalized illustration  It is quite clear and will give you a feel of how this annuity can work.


My final thoughts on the New York Life Flexible Premium Variable Annuity III

This is a well built annuity with some valuable benefits built in.  One interesting thing worth mentioning is that the level M&E fee option based on adjusted premiums is actually a New York Life innovation.  They have a patent on this fee structure.

If the market goes up, the level fee structure can work to your benefit because M&E charges are based on the amount you invest (your premium payments), not on the account value of the policy. However, in a flat or down market, a traditional fee structure which is based on account value, may be more advantageous.  If you elect it and your account goes from $500,000 down to $450,000, you will still be paying the M&E expense on the higher value of $500,000 and the decision is made at issue and irrevocable, not to mention the level M&E fee is slightly higher more expensive than the traditional M&E fee.

The New York Life Flexible Premium Variable Annuity III is built first and foremost as an accumulation product for your assets, be they retirement accounts or money you have in savings (401k's, IRA's, CD's, etc.).

Make sure that when you are looking at the illustration provided by your agent that you clearly understand the rates of return assumed and which fees/riders have been accounted for.  It is intended to give you an idea of how the performance of the investments can impact the policy value and death benefit.  Of course, we all want our money to grow but it is important to be realistic as well, so make sure what you are looking at is a real-world example of how this annuity could perform for you.

For people who like the additional benefits and hand holding this annuity and its riders offer it can be a great product to add to your financial plan.  For those who would rather be more involved and actively work with an advisor or manage the money themselves, then this may not be the right fit for you.

Keep in mind that each situation is different, so make sure to analyze the annuity for your unique situation to determine if it is the right fit for you.  Please feel free to get in touch with me via the link below and I can run a full illustration for you to see how this annuity may work in your particular situation.

If you are going to trust investing your money into this annuity make sure the Registered Representative you are working with has done their due diligence to make sure this annuity is appropriate as part of your financial plan, educating you on how it works and why it may be appropriate for you.

Where this annuity may be appropriate:

  • For people with longer time horizons (9+ years)
  • For people who want to accumulate retirement assets while using some guard rails for their money along the way (see more on the features/benefits/riders above).
  • For people who are more hands off when it comes to their investments
  • For people who want an option to turn their assets into income

Where this annuity might not work so well:

  • For people with shorter time horizons, it is not meant to meet short-term investment goals
  • For people who are more hands on with their investments
  • For people who are willing to forego built in benefits to reduce overall fees
  • For people who want greater access to their money


Do you have questions about the New York Life Flexible Premium Variable Annuity III?

If you have questions please let me know.  You can contact me via my contact form here.  I realize annuities can be confusing which can lead to uncertainty if you are investing your money into one.  Lots of advisors/agents have been recommending them, just make sure you know the real facts about them and how they will or will not fit into your unique financial situation.  As stated earlier, annuities are meant to be long term investments, they have surrender charges, a variety of riders, fees, etc.  Annuities contain certain restrictions and limitations.  I can provide you with costs and complete details should you wish to learn more.  Make sure to do your due diligence before purchasing one.

If you or anyone you know is considering purchasing this or a similar annuity, please share this article with them.  My goal with this article was to be as transparent as possible while educating people in an objective manner.  Please also feel free to share this post on social.  The more people can educate themselves the better off we all will be.

Thank you for taking the time to read through this post, it was a long one!  I hope you found it of value in your research of the New York Life Flexible Premium Variable Annuity III.


Derek Notman

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New York Life Variable Annuities are issued by New York Life Insurance and Annuity Corporation ("NYLIAC "), a Delaware Corporation, and offered by NYLIFE Securities LLC, Member FINRA/SIPC.  Both NYLIAC and NYLIFE Securities LLC are wholly-owned subsidiaries of New York Life Insurance Company, 51 Madison Avenue, New York, New York 10010.In most jurisdictions, the policy and rider form numbers are as follows (state
variations may apply): New York Life Flexible Premium Variable Annuity III
(ICC15-P303, or it may be 215-P303); Annual Death Benefit Reset Rider
(ICC15-R302, or it may be 215-R302); Living Needs Benefit/Unemployment
Rider (ICC09-R100, or it may be 209-100—some states may offer this rider under a different name, and benefits may vary). Riders are available in jurisdictions and products where approved. Please refer to the product prospectus for more information.  Certain features and benefits may not be available in all states or jurisdictions.

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