Premier Variable Annuity II review

It depends on what you want it to do. As a tax-deferred investment wrapper from a top-rated carrier, it is a solid, conventional variable annuity with a deep fund menu and a shorter surrender period than most. As a way to protect your money, it isn't — there's no principal guarantee built in, so a bad market hits your account value directly unless you elect and pay for the optional Investment Preservation Rider. If you already understand and accept market risk and you've run out of other tax-advantaged room, it can make sense. If you wanted guarantees out of the box, this is the wrong product type.

The rational reason to buy this is tax deferral on investment dollars after you've already filled up your 401(k) and IRA. You can move between 88 subaccounts without triggering a taxable event, which is genuinely useful for someone who rebalances actively. The 7-year surrender is shorter than New York Life's 9-year VA, so your money frees up sooner. And for buyers who want some structure, the contract offers two optional riders — a principal-preservation benefit and an enhanced death benefit — that you can add to address downside or estate concerns.

I think this is best for a middle-aged or pre-retirement investor — roughly 45 to 70 — who has maxed out qualified accounts, is comfortable with stock-market volatility, and intends to leave the money invested through the seven-year surrender period. Non-qualified money is the natural home for it, since the main draw is tax deferral you can't get elsewhere. It's a poor fit for anyone who wants guaranteed lifetime income, anyone who can't tolerate seeing their balance drop in a downturn, anyone who might need the money within seven years, and anyone buying inside an IRA purely for tax deferral they already have.

Strip away the "annuity" label and this is a brokerage-style investment account with an insurance layer on top. Your premium buys units in subaccounts — these are essentially mutual funds — and the value moves with the markets those funds hold. The insurance company is not promising you a return or protecting your principal during accumulation unless you add the optional living benefit. What it's selling you is the tax-deferred wrapper, the ability to switch funds without tax consequences, an optional death benefit, and an optional principal-preservation feature. That's the real product: a tax shelter with a menu of insurance add-ons, not a guarantee on its own.

The core of this contract is the subaccount menu — 88 variable investment options spanning stock, bond, and balanced strategies, plus a fixed account paying 2.90% as of the brochure date. You allocate your premium across the options you choose, and your account value is simply the combined value of those holdings minus fees. There is no cap, no participation rate, and no index crediting formula, because this is not an indexed product — you get the full upside and the full downside of the funds you pick. The net subaccount-level expenses run from 0.28% to 1.34% depending on which funds you hold, and those fund costs come on top of the contract's own insurance charges. The flip side of full market exposure is full market risk: in a bad year, your balance falls.

The two optional riders are where this contract gets more interesting than a plain accumulation VA. The Investment Preservation Rider 5.0 is a guaranteed-minimum-accumulation-style benefit that costs between 0.55% and 1.50% a year, with the benefit base able to step up and reset on each rollup — its job is to protect a floor on your value over the rider's measuring period rather than to pay lifetime income. Separately, the Annual Death Benefit Reset II enhanced death benefit, priced at 0.25% to 1.00% a year, locks in your highest contract anniversary value as a floor for what your beneficiaries receive even if the market later drops your account value below that high-water mark. Both are optional, both add cost, and whether either is worth it depends on whether downside protection or estate protection is a real goal for you. For a pure accumulator, each one is just another drag on returns.

This is a seven-year commitment, which is shorter than many accumulation variable annuities. The free-withdrawal amount depends on your issue age. For ages 0-75, you can take the greater of 10% of premiums, earnings, or account value in year one, and 10% of the prior anniversary value, earnings, or account value in later years. For ages 76-80, that free amount jumps to 50% on the same basis — an unusually generous allowance aimed at older buyers. Anything above the free amount during the surrender period is hit with a declining charge that starts at 8% and steps down to 2% in year seven before disappearing in year eight. A market value adjustment (MVA) also applies — that means the penalty on a large withdrawal can move with interest rates, sometimes adding to it. The spec didn't specify RMD treatment, so if you're holding this in a qualified account, confirm directly how required minimum distributions interact with the surrender charge. Even so, money you might need within seven years does not belong here.

The headline cost is the roughly 1.20% base annual expense, made up of a 0.28% base fee and a 0.92% mortality and expense (M&E) charge that the insurer assesses against your account value every year — up or down market, you pay it. On the variable subaccounts the M&E is taken daily; on the fixed account it's taken quarterly. On top of that sit the underlying fund expenses, which range from 0.28% to 1.34% depending on the subaccounts you hold, so a fund-heavy allocation can push your all-in cost well above the 1.20% base figure. There's a $30 annual contract fee. Then come the optional riders: the Investment Preservation Rider 5.0 adds 0.55% to 1.50%, and the enhanced death benefit adds 0.25% to 1.00% if elected. The trade to name here is plain — you're paying an insurance-grade fee stack for tax deferral plus whatever protection you choose to buy, and that stack will quietly outweigh the tax benefit for some buyers, especially anyone holding tax-efficient index funds elsewhere who doesn't need the wrapper.

Legal Entity: New York Life Insurance and Annuity Corporation

Parent: New York Life Insurance Company

A.M. Best Rating: A++

New York Life Insurance and Annuity Corporation is a subsidiary of New York Life Insurance Company, a large mutual insurer with an A++ rating from A.M. Best — the highest grade the agency assigns. For a variable annuity, where the carrier isn't guaranteeing your investment return, financial strength matters most for the death benefit, the optional living benefit, and any contract guarantees that do exist. On that front this is about as strong a backer as you'll find.