Secure Term Choice Fixed Annuity 5-Year review

Yes, for the right buyer — and the right buyer here is someone for whom carrier safety is non-negotiable. New York Life's A++ AM Best rating is the highest grade available, and as a mutual company it has no shareholders to prioritize ahead of policyholders. The 5-year term, guaranteed rates, and Return of Premium safety net make this a credible choice for conservative savers. It is less compelling for buyers who want flexibility, growth potential beyond a fixed rate, or income features.

The primary reason to buy Secure Term Choice 5-Year is certainty: a known rate locked for exactly five years with one of the financially strongest insurance companies in existence. The rate banding is transparent — if you have $100,000 or more, you get the best available yield; if you have less, you still get a guaranteed return without indexing risk or caps that can be cut at renewal. The Return of Premium provision adds a meaningful layer of protection for buyers who are uncertain about their five-year timeline but still want the higher yields that come with the commitment.

I think Secure Term Choice 5-Year is best for buyers who are nearing or in retirement, want their money safe, and place real value on carrier financial strength. It fits well for someone moving money out of a maturing CD or bond ladder into something with tax-deferred growth. Qualified buyers who already have RMD obligations benefit from the RMD-friendly structure. It is also well suited for inherited IRA holders given the 0-90 issue age range. This is not the right product for someone who wants index-linked upside, lifetime income guarantees, or a shorter commitment window.

You are buying a contract with a promise: New York Life will pay you a fixed, guaranteed interest rate every year for five years, and at the end of the term you get your principal plus all accumulated interest. There is no market risk — the rate does not go up or down with the S&P 500, and your principal is not exposed to investment losses. What you are giving up is liquidity and any upside beyond the guaranteed rate. The trade is essentially the same one you make with a bank CD, except the interest accumulates tax-deferred (if it is a non-qualified account), and the backing is an insurance company with a stronger balance sheet than most FDIC-insured banks.

Secure Term Choice 5-Year credits a fixed guaranteed interest rate that is locked at contract issue and does not change for the full five-year term. The rate is tiered by deposit amount: the lowest band applies to premiums under $25,000, the next covers $25,000 to $49,999, the next covers $50,000 to $99,999, and the highest rate applies to $100,000 or more. Once you fund the contract, the rate you receive on day one is the rate you will receive in year five — no renewal risk, no cap resets, no participation rates to track. Interest compounds inside the contract and is taxed as ordinary income when withdrawn or at annuitization, unless held inside a qualified account.

The Return of Premium provision is the product's most meaningful secondary feature. Starting on the second policy anniversary (or immediately for buyers aged 86-90), you have the option to surrender the contract and receive at least the premiums you paid, less any withdrawals you have already taken. This does not eliminate surrender charges — if you trigger it early, you are choosing to walk away from some interest — but it does cap your worst-case outcome. For a buyer who thinks "I probably won't need this money but I can't be completely certain," the ROP floor is meaningful insurance against regret. There is no separate charge for this benefit, which makes it genuinely additive rather than a fee-wrapped feature.

This is a five-year commitment. If you fund the contract and need the money in year one, you face a 7% surrender charge. The schedule stays at 7% in years two and three, drops to 6% in year four, and to 5% in year five. There is no market value adjustment on this product, which is a positive — your effective surrender cost is exactly what the schedule says, with no additional interest-rate-driven adjustment layered on top.

The free-withdrawal provision provides meaningful ongoing access. For deposits under $100,000, you can take out 10% of account value per year without surrender charges. For larger deposits, you can take the greater of 10% of account value or 100% of interest earned for the year. Required minimum distributions are also generally accommodated without surrender charge penalties, which matters for IRA holders who do not have a choice about when they take distributions. Even so, the 7% early-year charge makes this unsuitable for money that has any near-term spending purpose. Treat this as five-year money.

There are no base contract fees and no rider fees on this product — that is consistent with a straightforward MYGA design. The only cost you absorb is the spread between what New York Life earns on the invested assets and what it credits to you, which is standard for any fixed annuity and is priced into the guaranteed rate rather than disclosed separately.

The real tradeoffs are structural. The guaranteed rate is fixed, which means if market rates rise materially during your five-year term, you are locked in below what you could have earned in a later contract. The surrender charges in years one through three are on the steeper end of the MYGA peer group at 7%, which makes early exit genuinely costly. And unlike an FIA, there is no mechanism to participate in any upside beyond the contractual rate. Those are the explicit terms of the deal — transparency is high, but so is the opportunity cost in rising-rate environments.

Legal Entity: New York Life Insurance and Annuity Corporation

Parent: New York Life Insurance Company

A.M. Best Rating: A++

New York Life is a mutual insurance company — meaning it has no public shareholders — and has held an A++ rating from AM Best for decades. That is the highest financial strength rating the agency awards and reflects claims-paying ability and balance sheet quality that is genuinely exceptional by industry standards. For a MYGA buyer whose primary concern is "will they actually pay me back," the carrier story here is hard to match.