Premium Preferred 7 review

Depends on what you're optimizing for. If you want the single highest guaranteed rate Manhattan Life offers at 7 years, this isn't it — Preferred Choice 7 pays more for the identical surrender schedule, issue ages, and minimum premium. But if you specifically want a contractual promise that you can never surrender for less than you put in, even in year one or two, Premium Preferred 7 delivers something Preferred Choice 7 does not. I think that makes it a good annuity for a specific kind of buyer, not a broadly superior product.

Someone buys this because they want the upside of a locked multi-year rate without the downside risk that a surrender or forced liquidation early in the contract could cost them principal. The ROP floor removes that risk entirely — it's not a soft promise, it's a stated contract feature that costs no extra premium and doesn't reduce the declared rate below what Manhattan Life actually pays for it. For someone who values certainty over squeezing out the last basis point of yield, that's a rational trade.

This fits a conservative saver, likely nearing or in retirement, who wants a multi-year guaranteed rate for non-qualified or qualified money they don't expect to need urgently, but who is uncomfortable with the idea that an early withdrawal or life event could force a surrender below their original premium. It's less suited to someone chasing the top rate in the market or someone who's comfortable with standard nonforfeiture protection and would rather take Manhattan Life's own sibling product at a higher rate.

Strip away the brand names — Premium Preferred 7 was formerly sold as "Principal Preferred" — and what you're buying is a 7-year fixed-rate deferred annuity with two guarantees stacked on top of each other. The first is the standard MYGA promise: your money earns 3.70% each year for seven years, guaranteed by the contract. The second is the ROP floor: no matter what the surrender schedule says, your cash-out value can never be less than premiums paid, minus any withdrawals you've taken. On most MYGAs, the surrender-charge schedule and the statutory minimum floor together mean an early surrender can genuinely cost you money. Here, the worst case is your money back.

The Return of Premium guarantee is automatically included on every contract at issue, at no charge, and Manhattan Life states it does not reduce the fixed rate you're credited. Mechanically, your surrender value is the greater of (a) the standard surrender-value calculation — account value minus the applicable surrender charge — and (b) 100% of premiums paid minus any withdrawals already taken. In years where the surrender charge would otherwise cut into your principal, the ROP floor overrides it and you get your premium back instead. It's worth being precise about what this does and doesn't do: it protects principal, not the interest you'd have earned by holding to term, and it doesn't waive surrender charges on gains credited above your original premium.

The absence of a market value adjustment (MVA) matters here almost as much as the ROP floor itself. An MVA lets a surrender value swing up or down with interest-rate movements during the surrender period — it can make an early exit even more expensive if rates have risen since issue. Premium Preferred 7 has none. Combined with the ROP floor and a straightforward death benefit (the full annuity value passes to a beneficiary with no surrender charges applied if the annuitant dies before payments begin), this is a product built for predictability at every exit point — surrender, withdrawal, or death — not just at maturity.

The surrender schedule below applies to withdrawals above the free amount. You get 15% of account value available penalty-free every calendar year starting in year one, structured through required electronic fund transfers on a monthly, quarterly, semi-annual, or annual basis. Above that 15%, the surrender charge applies on a standard declining schedule from 8% down to 2% over seven years. What makes this schedule more forgiving than most is the ROP floor sitting underneath it: even a full surrender in year one, which would nominally trigger an 8% charge, can't actually take your account below premiums paid minus withdrawals already made. That's a meaningfully different liquidity profile than a MYGA with only the statutory minimum floor, where an early full surrender really can cost you principal.

There's no explicit fee for the ROP guarantee — no rider charge, no line-item deduction. The cost is embedded in the rate itself: Premium Preferred 7's 3.70% sits 0.25 percentage points below Preferred Choice 7's 3.95%, and both were quoted from the same September 2025 Wink snapshot with otherwise identical terms (same minimum premium, same issue ages, same surrender schedule). That's a relatively cheap way to buy real principal protection. For comparison, the same tradeoff shows up more expensively at the 5-year duration — Premium Preferred 5 trails Preferred Choice 5 by roughly 0.95 percentage points for the equivalent guarantee. In other words, the ROP floor gets proportionally cheaper the longer the surrender term, which makes it a more attractive value proposition here at 7 years than it would be on the shorter Premium Preferred products in this family. There's no base contract fee, no set-up charge, and no rider fee of any kind — the entire cost of ownership is the rate gap versus the sibling product.

Legal Entity: The Manhattan Life Insurance Company

Parent: ManhattanLife Group

A.M. Best Rating: B++