New York Life's PDA Offers an Impressive 10% First-Year Rate

From New York Life:

New York Life Advanced Markets Network is offering an Enhanced First-Year Rate for the Premium Deposit Account (PDA) for agreements with an effective date between June 1, 2022 and July 31, 2022. Clients who fund a PDA for 4 years or longer during this time will receive an enhanced first-year rate of 10% and the prevailing rate (currently 4.25%) in subsequent years. Each year, the policy’s annual premium is paid from the Account using the deposit and interest earned. The rate is applied to reduce the premiums paid.

The Premium Deposit Account (PDA) will offer a first-year rate of 10% for agreements with an effective date between May 1, 2022, and July 31, 2022. Subsequent years will receive the current PDA rate of 4.25%1. To qualify for the enhanced first-year rate, the PDA needs to be funded for at least 4 years or longer. Any PDA funded for less than 4 years will receive the current PDA rate of 4.25%.

Program Rules and Eligibility

The enhanced first-year rate is for new PDA agreements on newly issued CWL/CSWL policies (does not apply to in force agreements)

• To receive the 10% promotional rate, clients must pay the first year premium upfront and pre-fund at least 4 years with the PDA.

• The maximum number of pre-paid years remains the same (14 years)

  • In CA, the maximum allowable number of pre-paid years is 9.

  • In TX, the maximum allowable amount deposited into the PDA is $500,000

• Early withdrawals are subject to a withdrawal fee in all jurisdictions except Texas. Exceptions apply subject to the terms of the PDA agreement form signed at the time the PDA is funded.

Changes to NYLIS and obtaining PDA estimates

• In NYLIS, the PDA estimator and the PDA option in the riders’ section will be temporarily disabled.

• Agents may request an estimate showing premiums paid, interest earned, and beginning of year and end of year balances for specific deposit amounts and durations.

• The PDA agreement is generated after the policy is issued. Values may vary from the estimate depending on the date funds are received, the date of the agreement, and rating.

The current PDA rate is 4.25%. Rates are set monthly and are subject to change. Interest earned on the PDA is taxable.