Personal Income Annuity review

Yes, for the right buyer. This is a good annuity for someone whose main goal is protected lifetime income, who is comfortable committing long-term money for a full 10 years, and who wants a real choice between a large upfront benefit-base bonus or a long, high roll-up. It is less appealing for someone who wants accumulation, needs liquidity, or wants the reassurance of an A-rated carrier — Nassau carries a B++ rating from A.M. Best, which is worth weighing when the whole point of the product is a decades-long income promise.

The main reason to buy Nassau Personal Income Annuity is to build a guaranteed future income stream while keeping principal protected from market losses along the way. The secondary reason is the structural choice it hands you. Most income annuities give you one income engine; this one makes you pick between two very different ones at issue, which lets a buyer match the contract to whether they plan to turn income on soon or defer it for years. For someone who already knows income is the objective, that flexibility is genuinely useful.

I think this annuity is best for someone in the pre-retirement or early-retirement window, roughly in their late 50s through early 70s, who is using long-term qualified or non-qualified money specifically to create future income and expects to defer withdrawals for at least several years. The Today rider suits someone who wants income within one to three years and values a big benefit-base bonus; the Tomorrow rider suits someone who can wait longer and wants the 14% roll-up to compound the base. It is a poor fit for someone who wants growth, expects to need principal above the 10% free amount, or wants the simplest possible annuity.

You are not buying stock market upside, and you are not really buying the account value. You are buying a lifetime income framework, and the number that matters most is the Income Benefit Base — a separate accounting value used only to calculate your income, not a pile of cash you can walk away with. Your premium seeds that base, then either the Today rider's benefit-base bonus (30% if income starts in year one, 37.5% in year two, 45% in year three or later) or the Tomorrow rider's 14% simple-interest roll-up grows it. The index credits on your actual account value are secondary — they exist mainly to support the guarantees. It is important to understand that a bigger Benefit Base does not mean a bigger cash value; it means a bigger figure to multiply your income withdrawal percentage against.

An income rider is built in, and you must elect either Nassau Income Strategy: Today or Nassau Income Strategy: Tomorrow at contract issue. Both are Guaranteed Minimum Withdrawal Benefits — meaning they promise a lifetime withdrawal amount even if the account value eventually runs to zero — and both cost 0.95% of the Income Benefit Base per year, deducted from the contract value (the fee can rise to a maximum of 1.50%, and can increase if you restart the rider).

Today is the front-loaded option. It applies a cumulative benefit-base bonus to your single premium — 30%, 37.5%, or 45% depending on whether guaranteed income begins in year one, year two, or year three and later — and then adds a 3.00% simple-interest roll-up on the Benefit Base in years three through ten, but only if you have not yet taken guaranteed withdrawals. Tomorrow skips the bonus entirely and instead applies a 14.00% simple-interest roll-up to the Benefit Base for the first 10 years. Both riders allow a one-time restart of the roll-up period after year 10, extending the accumulation window to a maximum of 20 years. In plain terms, Today rewards starting income sooner, Tomorrow rewards waiting.

The most meaningful secondary feature is the return-of-premium death benefit. The contract value payable at death is never less than the premium you paid, reduced only by prior gross withdrawals and the cumulative income-rider fees, and it is calculated as the greater of the contract value or the Total Guaranteed Value. Importantly, it is not reduced by exercising either income rider. That gives the product a legacy dimension: even in a stretch of flat index years, your beneficiaries are protected against the account dropping below what you put in. The one caveat is that the index credit for the year of death is excluded, so the death benefit does not capture a final partial year of index growth.

The crediting menu itself is broad — 16 indexed accounts across the S&P 500, Nasdaq-100, a UBS tactical index, and a Sunrise index, plus a declared-rate fixed account — but the terms are modest by design. The representative S&P 500 annual cap is around 7.00%, and one enhanced-participation option carries a separate 1.00% annual strategy fee. These are snapshots that reset each segment and are not guaranteed beyond the current one; if you are shopping this contract, ask for the current rate sheet directly.

This annuity is built for long-term retirement dollars, not short-term cash. Each year you can withdraw up to 10% of the contract value free of surrender charges, market value adjustment, and fees. Anything above that during the surrender period is hit by a charge that opens at 12% and runs for a full 10 years — a steeper and longer schedule than many peer income FIAs, which more commonly start around 9%. A market value adjustment (MVA — an adjustment that can raise or lower your surrender cost depending on how interest rates have moved since issue) also applies to excess withdrawals.

There are some relief provisions. Required minimum distributions attributable to the contract are exempt from surrender charges and MVA, which the spec flags as an inferred RMD-friendly treatment rather than a heavily detailed brochure guarantee — confirm the specifics before relying on it. One trap to know: withdrawals, including free withdrawals and RMDs, reduce the Income Benefit Base pro-rata before you turn the rider on, so taking cash early can shrink the very number the product is built to grow. And in a year of full surrender, any penalty-free withdrawals from the prior 12 months are retroactively charged. Treat this as money you will not touch beyond the free amount.

The main fee is the income rider: 0.95% of the Income Benefit Base per year, deducted from the contract value. That is actually below the roughly 1.00%-1.15% that comparable built-in income riders often charge, so on a cost-per-guarantee basis it is reasonable — but remember the fee is charged on the Benefit Base, which the roll-up and bonus inflate, so the dollar cost grows over time. The fee can also rise, to a maximum of 1.50%, and can increase if you restart the rider after year 10.

The second cost is optional and easy to miss. The enhanced-participation-rate accounts carry a 1.00% annual strategy fee, deducted from the account value at the end of each segment before the index credit is applied. In a year the index returns 0%, that fee can actually pull your account value down. The tradeoff is clear: you accept a mandatory rider fee, modest caps, and a long steep surrender schedule in exchange for an aggressive income base. Whether that math works depends entirely on whether you actually turn income on and live long enough to draw it — if you cancel the plan or need the cash instead, you will have paid for a guarantee you never used.

Legal Entity: Nassau Life and Annuity Company

Parent: Nassau Financial Group

A.M. Best Rating: B++

Nassau Personal Income Annuity is issued by Nassau Life and Annuity Company, part of Nassau Financial Group. The B++ A.M. Best rating sits below the A-range strength that many income buyers prefer when they are counting on a carrier to make lifetime payments; the company also carries a BBB- from S&P per its disclosures. That does not make the guarantees worthless, but it is a real factor to weigh on a contract whose entire value proposition is a decades-long promise to pay.