ChoicePlus Signature 1 (NY) review

It depends on why you're buying it. As a pure accumulation vehicle, a variable annuity is a tough sell — you're paying insurance-company fees on top of fund fees for tax deferral you could get more cheaply elsewhere if you have IRA room. Where it earns its keep is when you genuinely want one of the optional riders: a guaranteed lifetime withdrawal benefit, the i4LIFE income structure, or an enhanced death benefit that locks in gains for heirs. If you want those guarantees and you want market participation, this is a reasonable, well-stocked contract. If you just want growth, it's hard to justify the cost.

The rational reason to buy ChoicePlus Signature 1 is that you want stock-and-bond market exposure but you also want the option to convert some of it into a guaranteed income stream or a protected legacy for heirs — and you want the gains to compound tax-deferred along the way. A New York resident maxed out on other tax-advantaged accounts who likes the idea of an income floor under a market-invested portfolio is the natural buyer. The 128-subaccount menu gives a lot of room to build a real allocation, not just a token set of funds.

I think this is best for a New York buyer in their 50s or 60s, comfortable with market risk, who has already used up cheaper tax-deferred space and specifically wants to pair market investing with an optional lifetime-income or enhanced-death-benefit guarantee. It works best with non-qualified money, where the tax deferral is the actual benefit — inside an IRA the wrapper is redundant for that purpose, so the only reason to use it there is the rider. It is not for someone who wants principal protection (a fixed or indexed annuity does that without market risk), someone who won't use the riders, or anyone who may need the money back inside seven years.

Strip away the brochure and this is a brokerage account wrapped in an insurance contract. Your premium buys units in variable subaccounts — mutual-fund-like portfolios that rise and fall with the market — and there is no cap, floor, or buffer protecting your principal. You can lose money. What the insurance wrapper adds is three things: tax deferral on the gains, the option to attach guarantees you can't get in a brokerage account, and a surrender schedule that locks you in for seven years. The 128 subaccounts run a net expense range of roughly 0.48% to 1.46%, so your real all-in cost is the base contract charge plus whichever funds you pick plus any riders — and that stack is the thing to understand before anything else.

The core of the contract is the subaccount platform. You allocate your premium across up to 128 investment options, get 12 free transfers a year with no transfer fee, and the account value moves with whatever you're invested in. Layered on top, optionally, is the income machinery. The Market Select Advantage GLWB rider adds a guaranteed lifetime withdrawal benefit with a 5.00% simple annual roll-up on the benefit base for up to ten years, with step-ups permitted to age 85 — meaning even if your investments do poorly, the amount used to calculate guaranteed withdrawals can keep growing. That rider costs 1.50% currently and can rise to 2.25%, charged quarterly on the benefit base (not the account value), so the fee can outpace your actual balance if markets fall. The separate i4LIFE Advantage option is structured as a guaranteed minimum income benefit at a much lighter 0.40% and converts the contract into a payout stream rather than a withdrawal rider. These are two different income philosophies, and you choose at most one path.

The optional death-benefit riders are the secondary story and matter more than they first appear for a legacy-minded buyer. The standard death benefit is just the account value — whatever the market left you. But you can add the Guarantee of Principal Death Benefit for 0.50% a year, which pays heirs the greater of account value or premiums paid (adjusted for withdrawals), or the Enhanced GMDB for 0.30% a year, which pays the greatest of account value, premiums paid, or the highest anniversary value locked in before age 81. In plain terms, the Enhanced GMDB ratchets up your death benefit every year the market hits a new high and never lets it fall — useful if the point of the money is to leave something behind regardless of how the market behaves. The catch, as always, is that each rider is another annual charge on the pile.

You're committing to a seven-year window. Each year you can withdraw the greater of 10% of account value or 10% of premiums paid without a surrender charge, available immediately, which is more generous than the typical "after year one" restriction. Anything above that during the surrender period gets hit with the declining charge in the table below, starting at 7% and stepping down to 3% by year seven. There's no market value adjustment on this contract, which removes one layer of unpredictability — your surrender cost is just the stated schedule, not something that swings with interest rates. Surrender charges are also waived for nursing home confinement, terminal illness, and disability, and the spec indicates RMDs are accommodated. One important warning on the income rider: if an excess withdrawal drives the account value to zero, the GLWB rider terminates — so over-withdrawing doesn't just cost a penalty, it can void the guarantee you've been paying for.

This is where a variable annuity lives or dies, and the stack here is real. The base contract is 1.15% mortality-and-expense plus a 0.10% administration charge, for 1.25% a year before anything else. On top of that you pay the net expense of whatever subaccounts you hold — 0.48% to 1.46%. Then, if you want the headline lifetime-income guarantee, the GLWB rider is 1.50% currently and up to 2.25%, charged on the benefit base. Add a death-benefit rider and that's another 0.30% to 0.50%. A buyer who loads up on the GLWB plus an enhanced death benefit plus a higher-cost fund could be paying north of 3.5% a year, all in. There's a $35 annual contract fee too, though it's waived at $100,000 of account value or after 15 years. The trade is straightforward: every basis point of fee is a basis point your market return has to overcome first. The riders can be worth it — a 5% roll-up and a ratcheting death benefit are real guarantees — but only if you actually use them. Paying 2.25% for a lifetime-income rider you never activate is pure leakage.

Legal Entity: Lincoln Life & Annuity Company of New York

Parent: Lincoln Financial

AM Best Rating: A