NYLIAC Pinnacle SUL Fact Sheet

NYLIAC Pinnacle SUL Fact Sheet PDF (457k, 6 pages)

New York Life Insurance and Annuity Corporation's Pinnacle Series has been designed to provide life insurance solutions for high net worth individuals. These life insurance products can help address a variety of consumer and business needs, including wealth accumulation, estate preservation and enhancement strategies.

Benefits

Adaptable life insurance coverage that gives you the opportunity to increase or decrease coverage
(increases may be subject to underwriting) and add or delete benefits through riders and options.¹
Flexible premium payments.
Access to cash surrender value through loans and/or partial surrenders.
Favorable tax advantages – the policy proceeds may reduce estate tax liability and may create an estate tax–free inheritance for beneficiaries.²
Opportunity for tax–deferred cash value accumulation with a guaranteed minimum interest–crediting rate.
Available for use on a non–qualified basis or in a qualified profit sharing plan.

Life Insurance Benefit
NYLIAC Pinnacle SUL offers permanent life insurance protection, with a life insurance benefit payable after the death of the last surviving insured. The amount payable is based on the life insurance benefit option in effect at that time.

You can choose among the following life insurance benefit options:

Option 1 – The life insurance benefit equals the policy's face amount and is generally a fixed amount.
Option 2 – The life insurance benefit varies and is equal to the policy's face amount plus the cash value.
Option 3 – The life insurance benefit varies and is equal to the policy's face amount plus the total premiums paid less any partial surrenders. This option may be valuable in split–dollar or premium financing arrangements.

Under any option, a higher life insurance benefit may apply, if necessary, for the policy to qualify as life insurance under Section 7702 of the Internal Revenue Code.³

Flexibility of Premium Payments
You can customize your policy through flexible premium payments. You can pay more than your planned premium, less or, sometimes, no premium at all, provided there is sufficient cash value in your policy to cover the monthly deductions. It is important to properly fund your policy because inadequate premium payments may cause your life insurance policy to end. Payment of your planned premium does not guarantee your policy will not terminate. Your policy will terminate if at any time the cash surrender value is insufficient to pay the policy's monthly deductions. This can also happen if loans or partial surrenders are made or if current interest rates or charges fluctuate.

Cash Value Accumulation
NYLIAC Pinnacle SUL provides an opportunity for cash value accumulation. Premium payments, less any applicable charges, are credited to the policy's cash value. The cash value is then credited with an interest rate guaranteed to be not less than 3%⁴. A base interest rate is set by New York Life Insurance and Annuity Corporation (NYLIAC) and is subject to periodic changes. An additional 0.65% is added to the base interest rate in the 11th policy year. Beginning in policy year 16 or the older insured's age 65, if later, and each year thereafter, the additional interest rate is increased by 0.10% for a total bonus of 0.75%.

Loans and Partial Surrenders
You can access your policy's cash surrender value through loans and/or partial surrenders. The policy's cash surrender value is equal to the policy's cash value less any outstanding loan and loan interest. You may borrow an amount up to the loan value of the policy. The loan value at any time is equal to ((100% – a) x b) – c, where a is equal to the current loan interest rate, b is equal to the policy's cash surrender value and c is equal to the sum of three month's of monthly deductions.⁵

The policy's loan interest rate is adjustable and will be capped at a maximum of 6%. The loan interest will be charged in arrears. Any outstanding loan balance reduces the policy's life insurance benefit. You may make partial surrenders from the policy. The amount available for a partial surrender is the policy's cash surrender value. The minimum amount for a partial surrender is $500. Partial surrenders will reduce the policy's cash value and life insurance benefit. If a partial surrender would cause decreases in the policy's face amount below the required minimum, a full surrender of the policy is necessary. Please note that the policies' design focuses primarily on long–term performance, which is achieved by assessing higher policy charges in the early years, especially the first year. Therefore, the policy's cash surrender value may be insufficient to meet any potential needs for loans or partial surrenders in the early years.

Available Riders
You can customize your policy by choosing from a variety of riders. Your representative can give you more information on these riders, including any additional costs that may be incurred, as well as assist you in selecting the best combination for your needs.

Level First–to–Die Term Rider (LFTD)
Provides a level term insurance death benefit payable upon the first death. Both insureds must qualify for a standard or better risk class.

Life Extension Benefit Riders⁶ (LEB I and LEB II)
There are two LEB riders available with NYLIAC Pinnacle SUL. Both extend the life insurance benefit beyond the policy anniversary on which the younger insured is, or would have been, age 100. Under either rider, the policy's life insurance benefit continues to be based on the Life Insurance Benefit Option in effect at that time. Without an LEB rider, at age 100 the life insurance benefit will equal the cash value. After age 100, no further premium payments will be allowed and no further monthly deduction charges will be made from the cash value.

The LEB I rider may only be elected at issue. Although elected at issue, charges are not deducted until the younger insured is, or would have been, age 90. The charge for this rider will then be deducted from the policy's cash value on each monthly deduction day, until the younger insured is, or would have been, age 100.

The LEB II rider may be elected at issue or added to an existing policy. The charge for this rider will be deducted from the policy's cash value on each monthly deduction day, until the younger insured is, or would have been, age 100. Charges begin on the monthly deduction day on or immediately following the policy's Right to Examine Policy period⁷. You should discuss with your representative, which LEB rider would meet your needs.

Scheduled Supplementary Term Insurance Rider (SSTR)
Provides a term insurance benefit payable upon the death of the insured (for the single life policies) or the death of the surviving insured (for the joint life policies) that automatically changes in accordance with the schedule determined at issue. The face amount of SSTR, when added to the base plan face amount equals the total face amount. In order to maintain the total face amount in effect at that time, the SSTR term insurance benefit is adjusted monthly to equal the current total face amount, minus the greater of the policy's life insurance benefit (which includes any corridor death benefit). The term insurance benefit can be scheduled to either increase or decrease periodically. Scheduled increases in coverage will be underwritten at the time of application, and upon approval, will not be subject to new evidence of insurability at the time the scheduled increase is effective. SSTR is only available with life insurance benefit option 1.

A policy with the SSTR, when compared to a policy with an all base plan, may have lower sales expense charges because the SSTR term insurance benefit is not included in the calculation of the target premium.⁸ This can enhance the policy's cash value and performance. The cost-of-insurance charges are different for coverage under the base policy and SSTR. This can impact your policy in different ways depending on your actual premium funding levels and the policy's interest earnings. You may want to review several illustrations with various combinations of base policy and SSTR coverage, and with various interest crediting rates.

There is no exact right or wrong amount of SSTR coverage to choose since actual premium funding and policy experience will determine the benefits realized. Your choice should be based on your own plans with respect to your premium amounts, the length of time you plan to hold the policy and your assessment of your future health. You should carefully evaluate all these factors and discuss all policy options with your representative.

Living Benefits Rider (LBR)⁹
Provides for the acceleration of 25%, 50%, 75% or 100% of eligible life insurance proceeds, when the insured (for SUL, the surviving insured) is determined to have a life expectancy of 12 months or less. Up to $250,000 of the policy's life insurance benefit proceeds may be accelerated. The accelerated benefit payment will be reduced by a discount factor (that varies based on prevailing interest rates) and by an administrative fee.

Additional Benefits Available with Your Policy There are a number of benefits automatically included with your policy that you can utilize.

10 Year No Lapse Benefit (NLB)
This benefit guarantees that the policy will not lapse for the first ten policy years if the policy's cash surrender value is insufficient to meet the monthly deductions due on a monthly deduction day, and you have paid the cumulative NLB premium¹⁰. If the total monthly deduction charges are greater than the policy's cash surrender value, we will deduct as much of the monthly deduction charges as possible from the cash value. The excess amount of these charges will not be waived, rather they are accumulated and deduction is deferred until the end of the guarantee period.

The NLB will end on the earlier of the tenth policy anniversary or the date on which you make any changes to the policy (including changes in coverage amounts and the addition/deletion of riders). The NLB is not available on a policy that includes the Scheduled Supplementary Term Insurance Rider and/or the Level First–to–Die Term Rider.

Policy Split Option
The SUL policy can be exchanged for two single adjustable life insurance policies each insuring one of the insureds, within 6 months after any of the following events:

A change in the federal tax law which results in a reduction or elimination of the unlimited federal estate tax marital deduction;
A change in federal tax law which results in a reduction of at least 50% in the level of the estate tax rate from the 1986 Tax Act payable on death; or
A final divorce decree has been in effect for six months.

In addition, the SUL policy can be split for any other reason, provided we agree.

Policy Improvement Feature
Allows the Company, at its own discretion, based on rules applicable to all policyowners in a class, to offer you the right to exchange your policy for a new policy that was not available at the time your policy was issued.

Alternative Cash Surrender Value Benefit (ACSV I and ACSV II)
The Alternative Cash Surrender Value Benefit I is available at issue only to a Corporation or Irrevocable Trust. The Alternative Cash Surrender Value Benefit II is available at issue to specified corporate sponsored policies, approved premium financed policies and approved charitable organizations or other defined policyowner classes, if we agree. ACSV I or ACSV II enhances early year cash surrender values. The crediting rate is reduced 0.30% for ACSV I and 0.55% for ACSV II in policy years one through ten.

If elected, while the insured (last surviving insured for SUL) is living, the ACSV benefit increases the amount of cash surrender value available to the policyowner upon full surrender during the first ten policy years.

The ACSV Benefit is equal to the sum of the sales expense charges and the monthly per thousand of face amount charges. As these charges are deducted, they are put into an ACSV account. That account provides the additional cash surrender value available to the policyowner upon surrender. The account increases as charges are deducted from the policy. The percentage of the account that is added to the policyowner's cash surrender value declines at a level rate from the 13th policy month (the beginning of the second policy year) through the 120th policy month (the end of the 10th policy year). At the end of the 10th policy year, the ACSV benefit is zero.

The ACSV is only available on a full surrender of all of the NYLIAC policies you own that include the ACSV benefit. It does not provide additional cash value to support monthly deduction charges or for purposes of a 1035 exchange, loan, or partial surrender, or as part of a death benefit payment. The ACSV account does not earn interest.

Policy Charges
Two types of charges are deducted from the policy: deductions from premiums and deductions from cash value. An illustration can demonstrate the impact these charges can have on the performance of your policy. The charges shown under the "Current" column reflect the charges we currently expect to assess. We may change these charges at our sole discretion and the actual charges may vary. However, the actual charges will never exceed the charges shown under the "Guaranteed" column.

Please note that the policy's design focuses primarily on long–term performance, which is achieved by assessing higher policy charges in the early years, especially the first year. Therefore, the policy's cash surrender value may be insufficient to meet any potential needs for loans or partial surrenders in the early years.

Deductions from Premiums — The following charges, expressed as a percentage of premium, are deducted from each premium payment:

	Current		Guaranteed
Sales Expense Charge	Up to Target Premium¹¹	Above Target Premium	Up to Target Premium	Above Target Premium
Policy Year 1	36.75%	5.25%	36.75%	5.25%
Policy Years 2-3	26.75%	4.75%	26.75%	4.75%
Policy Years 4-5	21.75%	4.75%	21.75%	4.75%
Policy Years 6-7	16.75%	3.75%	16.75%	3.75%
Policy Years 8-9	6.75%	3.75%	6.75%	3.75%
Policy Years 10+	2.00%	2.00%	2.00%	2.00%
State Tax Charge¹²	2.00%		May Vary
Federal Tax Charge¹²
Non-Qualified Policies	1.25%		May Vary
Qualified Policies	None		None

Deductions from Cash Value — The following charges are deducted from the policy's cash value on each monthly deduction day, which is the monthly anniversary of the policy.

	Current	Guaranteed
Monthly Contract Charge
Policy Years 1-7	$200	$200
Policy Years 8+	$50	$50
Per Thousand Face Amount Charge
Policy Years 1-7	$0.04/$1,000 of face amount	$0.04/$1,000 of face amount
Policy Years 8+	$0.03/$1,000 of face amount	$0.03/$1,000 of face amount
Cost of Insurance Charge¹⁷	Based on current rates	Based on guaranteed rates
Rider Charges	Vary	Vary

Unparalleled Service At New York Life Insurance and Annuity Corporation, meeting policyowner needs is our primary concern. Through our toll–free customer service line, (866) 695–3289, you are never more than a phone call away from information about your policy or the answer to any question you may have. You can also call your representative directly whenever you have questions, or when you feel the need to re–evaluate your coverage.

You will receive annual statements detailing the following information for your policy:

Premium payment activity for the previous year
Current cash value and cash surrender value of your policy
Current life insurance benefit of your policy
Monthly interest credited to your policy
Monthly fees and applicable charges deducted from your policy
Loan activity including, loans, repayments and loan interest rate charges.

The Pinnacle SUL product (2005 version) may not be approved in all jurisdictions. Please contact your New York Life Representative for additional information on product availability.

¹Riders and options are subject to state availability.

²Please consult your tax and legal advisor for any tax implications.

³Under Section 7702 of the Internal Revenue Code, a policy will generally be treated as life insurance for federal tax purposes if at all times it meets either (1) a "guideline premium" test or (2) a "cash value accumulation" test. In general, the cash value accumulation test will allow you to make higher premium payments during the policy's early years. The guideline premium test may allow you to maintain a higher cash value in relation to the Life Insurance Benefit. You must choose either the guideline premium test or the cash value accumulation test before the policy is issued. Once the policy is issued, you may not change to a different test.

⁴The current interest crediting rate is lower for policies that include the Alternative Cash Surrender Value Benefit.

⁵Monthly deductions include a monthly contract charge, per thousand of face amount charge, cost of insurance charge and any rider charges.

⁶The Life Extension Benefit is automatically included with Pinnacle SUL policies sold in CA, IL, MD, NY, OR and TX.

⁷You have the right to cancel your policy, within certain limits. The "Free Look" period (a.k.a. the Right to Examine Policy period) starts when the policy is received by the policyowner and ends when the policyowner returns the policy to us to receive a refund. In most jurisdictions the time period is ten days. Different jurisdictions have different Right to Examine Policy provisions.

⁸Sales expense charges are a percentage of premiums paid and vary depending on whether the total premium paid in any given year is above or below the target premium. The target premium can be found on the illustration and on the policy data page.

⁹ Also known as the Accelerated Benefits Rider.

¹⁰The required No Lapse Benefit (NLB) premium can be found on the policy data page. Please note that if you fund your policy at the NLB premium level, you may not build significant cash value in your policy. At the end of the guarantee period, it may be necessary to maintain the contract with premium amounts significantly higher than the premium required to maintain the NLB.

¹¹The target premium is an amount used to determine the sales expense charge that is derived from the policy's base face amount. It can be found on the illustration and on the policy data page.

¹² Although there is no stated guaranteed maximum, these rates will reflect changes in tax laws.

14014 (505)
SMRU 0257962 CV (05/05)

New York Life Insurance Company
New York Life Insurance and Annuity Corporation
(A Delaware Corporation)
51 Madison Avenue
New York, NY 10010

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