Indexed Annuity NY 10-Year review

It depends heavily on where you live. For a New York resident shopping for a principal-protected FIA, yes — it is a reasonable option with a strong carrier and a straightforward structure. For anyone outside New York, this product is not available. Within New York, the limitations are real: two crediting strategies and a single index is a narrow menu for a 10-year commitment, and buyers who want multiple index choices or a living benefit rider will need to look elsewhere.

The primary reason is location and simplicity. New York has a more restrictive regulatory environment for annuities, which shrinks the available shelf considerably. Protective Indexed Annuity NY fills that shelf with a fee-free, principal-protected contract backed by a highly rated carrier. A buyer who wants index-linked growth potential without paying for features they will not use — no income rider, no premium bonus complexity — will find the structure appealing. The $10,000 minimum also makes it accessible at lower premium sizes than many comparable contracts.

I think this product is best for a New York resident in their mid-40s through mid-70s who has money they will not need for at least 10 years, wants protection against market loss, and is comfortable with S&P 500 as the sole index. It suits accumulation-focused buyers in both qualified and non-qualified accounts. It is less suited for someone who wants multiple index choices, a built-in income guarantee, or a shorter surrender horizon — and it is unavailable to anyone outside New York state.

You are not buying stock market returns. You are buying a 10-year insurance contract that credits interest based on S&P 500 performance under one of two methods, while guaranteeing your principal against market loss. The real value is the protection floor — zero is the worst crediting outcome in any contract year — combined with the time horizon that lets index-linked growth compound without the drag of an annual rider fee. The tradeoff is that upside is capped, and the cap rates reflect a New York market with fewer competitive pressures than the national shelf.

Protective Indexed Annuity NY uses two S&P 500 crediting strategies. The first is an Annual Point-to-Point with a cap: at the end of each contract year, the S&P 500's gain is measured from the start of that year, and the lesser of the actual index gain or the cap is credited. Based on rates effective August 22, 2023, caps ranged from approximately 4.65% to 5.65% depending on the method selected. The floor is 0% — if the index falls, nothing is credited but nothing is lost.

The second is a Performance Triggered strategy: if the S&P 500 is flat or positive at the end of the year, a declared rate (shown as 4.00% to 4.70% as of the brochure date) is credited regardless of how large the gain actually was. If the index finishes negative, zero is credited. This method trades the possibility of capturing more in a strong year for a more predictable outcome in modest-gain years. Both strategies carry a 1% minimum guaranteed interest rate.

Note that these rates are snapshots from the brochure and will change at each renewal. Always request a current rate sheet before purchase.

The most meaningful secondary feature is the nursing facility and terminal illness waiver. If you become confined to a nursing facility or are diagnosed with a terminal illness, Protective waives the surrender charge on withdrawals. For a 10-year contract, that is a meaningful safety valve — it means the liquidity restriction has an exit in genuinely adverse health circumstances. The waiver does not eliminate the tax treatment of withdrawals, but it removes the carrier-imposed penalty layer when you may need money most.

This is a 10-year commitment. The free-withdrawal provision gives you access to 10% of the initial purchase payment in year 1, and 10% of the contract value annually after that — with the requirement that at least $10,000 remain in the contract. Withdrawals above the free amount are subject to the charge schedule below. There is no MVA on this contract, which simplifies the math: surrender charges are the only penalty, and they are straightforward.

The schedule steps down steadily from year 3 onward, which is fairly standard for a 10-year FIA. The absence of an MVA is a meaningful simplification — your penalty is only the stated percentage, not a floating market-rate adjustment. The spec does not confirm RMD treatment explicitly; if you are funding a qualified account, ask the carrier whether RMDs taken from this contract avoid surrender charges.

There are no base contract fees and no rider fees, because no riders are available for purchase on this product. The cost structure is entirely embedded: you give up some upside potential through the cap or through the fixed trigger rate, and the carrier uses the margin between what they earn and what they credit to cover their costs. That is a standard and transparent FIA structure.

The tradeoffs are structural rather than fee-driven. The narrow index menu — one index, two methods — limits your ability to diversify crediting strategies the way a broader FIA would allow. Cap rates in New York have historically been lower than comparable national products, a function of the regulatory environment. And the 10-year surrender period is a genuine commitment — while the waiver provisions help at the margins, this is not suitable for money you may need before the surrender period expires.

Legal Entity: Protective Life and Annuity Insurance Company

A.M. Best Rating: A+

Protective Life and Annuity Insurance Company is the New York-authorized subsidiary of Protective Life Corporation. The A+ A.M. Best rating reflects strong financial strength, and Protective is a well-established carrier in the fixed annuity space. The New York entity is specifically regulated under New York's stricter insurance laws, which influences product design and pricing.