Preferred Choice 7 review

It depends, and I'd lean skeptical. The contract terms themselves are fine — no MVA, no banding, a straightforward 15% annual free withdrawal, and a standard death benefit that waives surrender charges. But "good" for a MYGA mostly comes down to whether the rate justifies the lockup, and here it doesn't clearly clear that bar. Paying less for a longer commitment than the carrier's own 5-year contract is the kind of detail a shopper needs pointed out, not buried in a rate sheet.

The rational buyer here already has a reason to work with Manhattan Life specifically — maybe an existing relationship with the carrier, a state-availability constraint, or a preference for this issuer's claims-paying process — and wants a full seven years of rate certainty rather than the shorter 5-year alternative. Someone in that position who has deliberately chosen the longer duration for planning reasons (matching a known income need seven years out, for example) can still get value from the product even at a lower headline rate, because certainty of term has its own worth independent of yield.

This fits an investor in their late 50s through 70s, non-qualified or IRA money, who wants a true set-and-forget contract for a specific seven-year horizon and isn't rate-shopping across the open MYGA market. It is a weaker fit for anyone comparing options by yield, since Manhattan Life's own 5-year product outyields it as of the same snapshot, and it's not the right vehicle for anyone who might need principal back inside the 7-year window and would rather have the 100%-of-premium return-of-premium guarantee available on the sibling Premium Preferred 7 contract.

Strip away the brand name and this is a fixed-rate deposit-like contract: you hand over at least $10,000, Manhattan Life credits a single declared rate of interest for seven years, and at the end of that period you can walk away, roll it into a new contract, or annuitize. There's no index participation, no cap, no spread — the entire crediting mechanism is one number. That simplicity is the product's real selling point, but it also means there's nowhere for the contract to make up ground if the initial rate isn't competitive relative to alternatives, including the carrier's own other durations.

Preferred Choice 7 credits a single declared rate — currently 3.95% per the snapshot used for this review — with no rate banding, meaning the same rate applies whether you deposit $10,000 or $500,000. That rate is locked for the full seven-year guarantee period once the contract is issued. After that, in contract years 8 and beyond, the rate resets annually to a formula-driven minimum: the lesser of 3% or the 5-year Constant Maturity Treasury rate minus 1.25 percentage points, but never below 1.00%. In practice, that means the attractive part of this contract is entirely front-loaded into the initial seven-year rate — there's no guarantee the renewal rate after year 7 will be worth staying in for.

The standard death benefit is worth calling out because it removes a friction point that trips people up on other annuities: if the annuitant dies before the contract reaches its settlement date, the full annuity value passes to the beneficiary as a lump sum or settlement option, with all surrender charges waived. There's no confinement or terminal-illness waiver disclosed in the materials reviewed here — some competing MYGAs offer early access to funds without penalty in a health emergency, and this contract's brochures don't mention that feature, so buyers who value that kind of safety valve should ask directly before purchasing.

The free-withdrawal allowance is 15% of annuity value per calendar year, available starting in the first contract year — a genuinely generous access provision for a MYGA, and better than many competitors that cap free withdrawals at 10% or require a one-year wait. The catch is procedural, not financial: withdrawals must be set up via Electronic Fund Transfer, which is a minor inconvenience but worth knowing before you sign, since it forecloses ad hoc check-based withdrawals. Beyond the free amount, the surrender schedule below applies — an 8% charge in year one stepping down to 2% by year seven, with no MVA layered on top, so the dollar cost of an early exit is capped at exactly what the schedule states, without exposure to interest-rate-driven adjustments.

There's no base contract fee, no rider fee, and no other charges deducted from premium — this is about as fee-free as a fixed annuity gets. The tradeoff isn't a fee line item, it's opportunity cost: the same carrier's Premium Preferred 7 pays a lower 3.70% rate but adds a genuine no-charge 100%-of-premium return-of-premium guarantee, something this product's brochure does not carry — its downside floor is only the statutory guaranteed minimum described above, not a return-of-premium promise. And the carrier's own 5-year Preferred Choice pays 4.70%, better than this 7-year contract's 3.95%, for a shorter commitment. Both comparisons point the same direction: before locking into this specific product, a shopper should ask whether either sibling contract better matches what they actually need.

Legal Entity: The Manhattan Life Insurance Company

Parent: ManhattanLife Group

A.M. Best Rating: B++