Navy Mutual Annuities
Deferred Annuities

What Is a Deferred Annuity?


A deferred annuity pays you in the future. It is designed to grow premium deposits in a tax-advantaged way, with the option to initiate income payments at any future point. Prior to the distribution of payments, interest accumulates daily and compounds annually on a tax-deferred basis. You will not pay any taxes on interest earned until you decide to receive distributions from the annuity.

 Rates up to 5.05%

Navy Mutual offers two deferred annuities:

Deferred annuities can either be funded in an installment premium model or used to safely grow a lump-sum premium investment. Navy Mutual offers both payment models.

The Single Premium Deferred Annuity is ideal for those looking for a simple and secure way to grow a lump-sum premium deposit of $10,000 of more while earning tax-deferred interest. Interest rates are guaranteed for the lock-in period chosen.

The Flexible Premium Retirement Annuity is ideal for those who want to diversify their tax-deferred investments and contribute additional premiums over time while avoiding market volatility. This annuity can also be purchased for a child or grandchild under age 26 or transferred to another owner.

Single Premium Deferred Annuity


The Single Premium Deferred Annuity is ideal for those seeking a simple and secure way to grow their savings with compounding, tax-deferred interest. After a single lump-sum deposit, you earn tax-deferred interest for a predetermined lock-in period and the future value of the contract can be easily calculated.

Single Premium Deferred Annuities are funded through one lump-sum payment. Often this lump sum comes from liquidating other assets like home equity or an investment portfolio; Single Premium Deferred Annuities are non-qualified annuities purchased with after-tax dollars.

  • Minimum Deposit: $10,000
  • Maximum Deposit: $5,000,000
  • Interest Rate: 4.45% – 5.05%

There is a maximum contribution amount of $5,000,000 per military member across all Single Premium Deferred Annuities for their family.

Single Premium Deferred Annuities are fixed annuities, meaning you deposit a sum of money and receive guaranteed principal and interest payments in the future. This type of annuity is low risk, and often provides a higher interest rate than a savings account, Money Market account, or Certificate of Deposit.

  • Interest rates depend on the amount of your premium contribution and lock-in period.
  • Lock-in periods can be five, seven, or 10 years.

Lock-In Period


  • Interest rates are guaranteed for the duration of the lock-in period.
  • Our deferred annuities allow up to 10% of the accumulated value to be withdrawn across up to four withdrawals without penalty after the first year.

After the lock-in period ends, you can:

  • Surrender the value of the annuity for a lump-sum payment
  • Continue accruing tax-deferred interest at Navy Mutual’s portfolio rate (which fluctuates with bond market conditions)
  • Establish a new interest rate lock-in period
  • Transfer the value of the annuity to a Single Premium Immediate Annuity
  • Receive income under an annuity settlement option

 

Payments


After the lock-in period ends, you can choose to receive guaranteed income payments in one of four ways:

  1. Fixed Period: You will receive payments for a period of one to 30 years, distributed monthly, quarterly, semi-annually, or annually. These payments will continue to you or a beneficiary if you pass away during the fixed period. Income payments cease after the fixed period is complete.
  2. Life Income with No Death Benefit: You will receive monthly payments for the remainder of your life. This payment option provides the highest monthly life contingent income amount.
  3. Life Income with Period Certain: You will receive income for the remainder of your life. You may also choose a period certain of five, 10, 15, or 20 years. If you pass away during the period certain, your beneficiary will continue to receive income payments for the remainder of the period certain.
  4. Joint and Survivor Income:  You and a joint annuitant will receive income payments until one of you passes away, after which the surviving annuitant will receive 50%, 67%, or 100% of the original income amount for the remainder of their life. The percentage of the original income payment that will be paid to the surviving annuitant is chosen at the time of purchase and affects the income amount received while both annuitants are living.

 

Features


Our Single Premium Deferred Annuities provide:

  • Guaranteed Interest Rate – You lock in your interest rate for the length of time you choose. You won’t have to pay taxes on interest earned in a Navy Mutual annuity before receiving income payments unless you take a distribution from the contract. If you begin receiving income, a portion of both the tax-free premium deposit and its taxable interest earnings are distributed in each payment.
  • Flexible Withdrawals – After the first year, you can make up to four withdrawals equaling up to 10% of your contract’s accumulated value without incurring a fee.
  • Free Look Period – You can take up to 30 days to confirm that this annuity is right for you.
  • Premium Bonus* – A 1% premium bonus is added to any deposit with a 7- or 10-year lock. This premium bonus has the effect of increasing the realized rate of return over the lock-in period.

*Note that this premium bonus and the interest it accumulates will be forfeited if any distribution which triggers a Market Value Adjustment occurs during the interest rate lock-in period.

Questions? Call 800-628-6011.

Flexible Premium Retirement Annuity


The Flexible Premium Retirement Annuity is ideal for those who want to diversify their low-risk, tax-deferred investments while avoiding market volatility. Contributions can be made at any time, increasing the value and future earning potential of the annuity. This annuity is typically used by younger investors as a diversification tool within an overall investment portfolio, while older investors use it to reduce risk exposure while continuing growth of their assets.

Flexible Premium Retirement Annuities are typically funded through multiple premium contributions. The initial premium can be as low as $100, and subsequent contributions of at least $25 can be made at any time. Flexible Premium Retirement Annuities are non-qualified annuities purchased with after-tax dollars.

  • Minimum Initial Deposit: $100
  • Maximum Initial Deposit: $1,000,000
  • Minimum Subsequent Deposits: $25
  • Interest Rate: 2.00% – 3.00%

The sum of all deposits cannot total more than $1,000,000.

Flexible Premium Retirement Annuities are fixed annuities, meaning you deposit a sum of money and receive guaranteed principal and interest payments in the future. This type of annuity is low risk, and often provides a higher interest rate than a savings account, Money Market, or CD.

  • Cumulative deposits contained within the contract for more than 12 months determine your portfolio rate.
  • New deposits earn the new money rate declared on the date of deposit for the first 12 months they are invested. This rate will can never be less than the guaranteed minimum interest rate stated on your contract.
  • All funds held in the annuity for at least 12 months will earn the current declared portfolio rate and will not be less than your contract’s guaranteed minimum interest rate. The portfolio rate may change over time with bond market conditions.

Payments


You can choose to receive guaranteed income payments in one of four ways:

  1. Fixed Period: You will receive payments for a period of one to 30 years, distributed monthly, quarterly, semi-annually, or annually. These payments will continue to you or a beneficiary if you pass away during the fixed period. Income payments cease after the fixed period is complete.
  2. Life Income with No Death Benefit: You will receive monthly payments for the remainder of your life. This payment option provides the highest monthly life contingent income amount.
  3. Life Income with Period Certain: You will receive income for the remainder of your life. You may also choose a period certain of five, 10, 15, or 20 years. If you pass away during the period certain, your beneficiary will continue to receive income payments for the remainder of the period certain.
  4. Joint and Survivor Income:  You and a joint annuitant will receive income payments until one of you passes away, after which the surviving annuitant will receive 50%, 67%, or 100% of the original income amount for the remainder of their life. The percentage of the original income payment that will be paid to the surviving annuitant is chosen at the time of purchase and affects the income amount received while both annuitants are living.

 

Tax Implications


Note that a 10% tax penalty will occur on interest distributions if the distribution should occur before age 59 ½. This penalty does not apply if:

  • You are over age 59 ½
  • You pass away and the accumulation value is distributed to your beneficiary – they then have multiple settlement options available
  • You elect any of several life income settlement options while the owner and annuitant are living

 

Features


Our Flexible Premium Retirement Annuities provide:

  • Guaranteed Interest Rate – You will receive at least the guaranteed minimum interest rate as listed on your contract on all funds contained within the annuity. You will receive Navy Mutual’s new money rate on contributions that are less than 12 months old and Navy Mutual’s portfolio rate on contributions that are more than 12 months old. These rates may be higher than your guaranteed minimum interest rate.
  • Guaranteed Principal Deposit – Premium deposits will not suffer losses and will be repaid to you (or a beneficiary) in full, with interest.
  • Flexible Withdrawals – After the first year, you can make up to four withdrawals equaling up to 10% of your contract’s accumulated value without incurring a fee.
  • Free Look Period –You can take up to 30 days to confirm that this annuity is right for you.

Questions? Call 800-628-6011.

Navy Mutual provides affordable life insurance and annuities to those who serve (or have served) our nation. If you are an active duty, reserve/guard, or retired servicemember in any branch of the United States military or uniformed services, we’d be honored to serve you and your family.

Annuity Basics

If you are ready to learn the basics of annuities, start here. Then, when you are ready to set yourself up with guaranteed income, you can schedule a consultation with a representative.

Annuity Payout Options

Navy Mutual offers five payout options that provide income in different ways. This decision should take into consideration the reason you decided to purchase the annuity in the first place.