A CFP®’s review of the
Nassau Life Personal Protection Choice Group C Annuity

By Scott Brooks, MBA, CFP® Editor

An Independent Review of the Personal Protection Choice Group C from Nassau Life

If you are considering the Personal Protection Choice Group C this might be the most important message you will read.

Why?

Because when it comes to index annuities, it’s not what you know that gets you into trouble. It’s what you know for sure, that just isn’t true.

Index annuities and variable annuities pay the highest commissions to insurance agents. So you want to do your homework!

Our goal is to be brutally honest with you about what to expect.

We want you to have realistic expectations, so you won’t be disappointed later.

The Personal Protection Choice Group C annuity is a fixed indexed annuity.

  • The Personal Protection Choice Group C is a fixed indexed annuity. They are for investors who like safety and security. Gains are linked to a positive change in a market index. You receive some of the upside, but none of the downside.
  • If you like bonds, bank CDs, and other safe investments, they might be right for you. Read our index annuity article to learn the truth about index annuities.
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10 Tips You Should Know If You Are
Considering The Personal Protection Choice Group C

  1. This product has a 10 Years term. Make sure you are comfortable with committing your money for this period. Do not invest money you might need to live on.
  2. You can lose money in two ways. If you take excess withdrawals before the term is up, you will be charged surrender charges. The product’s surrender schedule is below. You also might be charged a market value adjustment on early withdrawals. Look for products with a short surrender period and no MVA if you might need access to the money.
  3. Nassau Life has the right to change the terms of their index annuity at any time. Participation rates, spreads, and crediting rates can be changed without your permission. Choose your company wisely. Want our recommendation? Request a index annuity quote.
  4. The Personal Protection Choice Group C competes with bank CDs, bonds, and other fixed-income products. It does NOT compete with the stock market. You earn a fixed-income type of returns, not market-like returns. Do not trust anyone that tells you otherwise.
  5. You might be better off in a MYGA with a pre-determined rate of return vs. an index annuity where you might earn 1-3% more per year. Studies have shown the returns of MYGA’s and index annuities to be similar. Looking for the highest guaranteed returns? Check out the highest fixed annuity (MYGA) rates.
  6. Do not buy an annuity solely for the bonus. If a company pays a bonus, they typically take away some of the upside potential by lowering the cap. They also extend the term. You don’t get something for nothing!
  7. Has an insurance agent sent you a proposal that seems “too good to be true?” Hypothetical illustrations are often the best-case scenario. You should also request a proposal for the worst-case scenario. Know the worst-and best-case scenarios because you are likely to earn something in the middle.
  8. Some index annuities have caps that limit their gains. Uncapped annuities have spreads or participation rates that limit their upside potential. Know how the return is calculated. Book a 15-minute phone call with one of our specialists, and they can help.
  9. Income riders cost real money and lower your principal balance. The fees are taken out of your account value. If you don’t need income later, DO NOT pay for an income rider. If you are looking for the most retirement income, request an income later quote. We can rank 150+ income riders and show you which products guarantee the most retirement income.
  10. Be extremely careful with custom or proprietary indexes because you don't know the underlying holdings. These fancy new indexes have not been tested in the real world. Established indexes are safer and more likely to generate better returns. Diversify your index annuity into a variety of indexes. It’s also a good idea to lock in the indexes at different times. The indexes available for the product are listed below.
  11. Bonus Tip - Watch our video titled "The 7 Biggest Mistakes Consumers Make When Buying An Annuity & How To Avoid Them"

HOW AN INSURANCE AGENT MIGHT TRY TO SELL YOU AN INDEX ANNUITY

  • “Earn a guaranteed 7-9% returns.” False. You don’t earn a guaranteed 7%-9% return when CD’s, bonds, and fixed income earn less than 4%. The 7-9% refers to an income rider roll-up rate. It’s a fictional number which you can’t withdraw lump sum, transfer out, or live on the interest. It’s NOT a real return. Your rate of return is calculated based on the accumulation value, not the income value. An agent might confuse you by talking payout rates, withdrawal rates, or the income account value. Your accumulation value is what matters.
  • “You can earn market-like upside without the market downside.” This is a partial truth. You are not directly investing in the index. The annuity contract has a formula that decides how much of the gain of an index you receive. You receive some of the upside and none of the downside.
  • “I will show you a client’s statement who earned 14% without risk.” This is misleading because over the product term you are likely to earn 2-4% per year. You could receive 15% one year and 0% for 2 other years. Over time, the returns will average out to be in the 2-4% range. There are spreads, caps or participation rates that limit how much of the return you receive. Index annuities are fixed annuities and generate fixed income type of returns.
  • “Earn a 10-15% Bonus. It’s free money”. Here is the truth. If an insurance company gives you a bonus, they will reduce other benefits of the contract (ex. Cap rates) and extend the term. You don’t get something for nothing. Do not buy an annuity solely for the bonus.

WHAT IS A REALISTIC RETURN FOR AN INDEX ANNUITY?

  1. You could earn slightly less than what fixed annuities pay to slightly more, in our opinion.
  2. Expect to earn 1-2% more than the average rate of a 1-year fixed annuity.
  3. This would be 2-4% in today’s market. I would not expect anything more than this over a more extended period. This assumes you find one of the better products on the market.
  4. Uncapped index annuities might earn 3-5% (1-2% more) than capped annuities. Uncapped annuities outperform when stock markets are strong. Capped annuities are more likely to outperform uncapped products when the stock market is weaker.
  5. Request a index annuity quote, and we will send you what we feel are the best capped and uncapped index annuities on the market today.
  6. Do not trust anyone who suggests you will earn significantly higher returns than what we have disclosed in this section. You’ve worked hard and deserve someone you can trust. Don’t be misled by an annuity salesman trying to earn a big commission.
  7. If you are looking for the highest guaranteed returns, consider a multiple-year guarantee annuity (MYGA) because the rates are guaranteed for the entire term. Here's where you can find the fixed annuities (MYGAs) with the highest rates.

important information

term10 Years
surrender schedule
10%, 9%, 8%, 7%, 6%, 5%, 4%, 3%, 2%, 1%
MAXIMUM AGE80
MINIMUM INVESTMENT$ 15,000
MAXIMUM INVESTMENT$ 1,000,000
FREE LOOK PERIOD10 Days
RMDYes
market value adjustmentYes
agent commission2.00 - 7.00%

what we like

  • Percentage of Balance Withdrawals
  • RMD Friendly
  • Various indexes to choose from

what we don’t like

  • Possible market value adjustment on withdrawals
  • 10-year surrender charge (make sure you don’t need access)
  • Higher rated companies are available
  • Single premium (can’t add money later)

index options

The interest credited to the Personal Protection Choice Group C annuity is linked to the performance of the indexes you choose. You may choose a combination of the following indexes.

  • CS Tactical Multi Asset Index Spread
  • S&P 500

WHO SHOULD PURCHASE AN INDEX ANNUITY?

  • Do you like bank CD’s, bonds, and other types of fixed income?
  • Are you a conservative investor who wants to protect your principal?
  • Is the pain of losing money greater than the pleasure of winning?

Index annuities are an excellent fit for conservative investors who are looking for an alternative to bank CD’s and bonds.

Other reasons to consider an indexed annuity:

  1. Tax-Deferred growth - Your money grows faster due to the triple compounding of interest. This is because you earn interest on the money generally lost to taxes.
  2. Guaranteed Retirement Income - (via annuitization or an income rider).
  3. Reasonable Returns - Index annuities are an alternative to CD’s, MYGA’s, and bonds. They offer the potential for higher returns.
  4. Flexible Contributions - You can add money over time to most index annuities.
  5. Avoid Probate - Index annuities pass by beneficiary designation, not probate. In some states, probate can be costly and time-consuming.
  6. Creditor Protection - Many states offer creditor protection to assets inside an annuity.
  7. No fees unless you choose an income rider.
  8. Favorable tax treatments for retirement income if you annuitize.

How Does This Product Compare To The Best On The Market?

  • Would you like to know how the Personal Protection Choice Group C compares to the best Index annuities on the market? Request a index annuity proposal.
  • If you request an index annuity proposal, we will send you information on what we feel are the best products available. Don’t take an agent’s word for it. Get independent advice.

Company description

Nassau Life And Annuity was founded in 2015 with an investment by Golden Gate Capital. Divisons of their company trace their roots back to 1851. Nassau life is committed to service, commitment, and integrity. As of Dec 31, 2018 they had over 486,000 policies and contracts in force. Nassau Life proudly manages policies from 10 other life insurance companies. Nassau's business includes insurance, reinsurance, and asset management through affiliates.

Surrender Charge Schedule

Surrender charges are a penalty charged to early withdrawals of annuity contract. They are a percentage of the withdrawal amount, decrease over time, and go to zero when the term ends.

percentage charged to withdrawal

Year
Percentage
1
10%
2
9%
3
8%
4
7%
5
6%
6
5%
7
4%
8
3%
9
2%
10
1%

market-value adjustment (MVA)

  • A market value adjustment is basically an additional charge or credit for taking money out early from an annuity.
  • They allow companies to pay a higher rate and make longer-term investments.
  • MVA’s only affect you if you withdraw funds early. If you own the contract to maturity, they do not apply.

Company information

company NameNassau Life
URLnsre.com/
phone number(800) 628-1936
LOGIN FORnsre.com
am best ratingB+ Good (6th of 13 ratings)
fitch ratingBB+ Moderately Weak (11th of 21 ratings)

product information

Product
information

Index annuities are for conservative investors who like safety. They were introduced in 1995 to compete with bank CDs.

Index annuities are fixed annuities that deliver fixed income type of returns.

They don’t have the upside or downside of the market. They compete with bonds, CDs, and other safer investments.

They allow you to capture some of the growth of a market index while having 100% downside protection. Returns are linked to a positive performance in an external index.

You are not directly participating in the market. You are watching the market, and a formula decides how much gain of the index you receive.

Product namePersonal Protection Choice Group C
Product typeFixed Indexed
premium typeSingle Premium
Product
brochure
account
types
Personal, Traditional IRA, Roth IRA, SEP-IRA, SIMPLE-IRA, 403(b).
not available inOnly available in AK, IL, LA, MO, NH, NJ, OR, PA, UT, VA, VT, WA, WY

other Nassau Life reviews

We have reviewed other products from Nassau Life. Here are some links if you would like to review them as well.

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