NY LIFE Whole Life which Column?

[LGilmore]

Re: NY LIFEWholle Life which Column?

If you are looking at switching over, ask the agent to run a couple illustrations doing the same thing you are talking about (paying for 5 years, no further outside premium) and have him/her reduce the dividend projection by 10% and 20%.

Post your link that comes up with 3.87 just to make sure it is the correct thing to apply.

Keep in mind that prior histories, much like the stock market, can produce different numbers based on the day you look. In life insurance it could be the day you look, your age and your gender.

When you see a company tout "we're #1 in .." often there is small print somewhere that states "500,000 preferred class, 25 year old male." Understand that this same statement may be false at 250k, age 27, female....

Ask whom ever is showing you these quotes to come back with those reduced dividends. I'm going to assume you don't need to see a 110% dividend scale?

Hope you understand what I am saying as I have no dog in this hunt. I own NYLWL policies, but haven't worked for them going on 18 years and I received a settlement from them from a lawsuit filed against them (as an agent, not as an insured). So I think I know the company fairly well, admittedly haven't kept current on any new plans being offered. They're quality, which is why even pissed at them, going through approx. 5+ years in legal action with them, I never saw a reason to cancel the NYL policies I own.

One thing, my policies have a 4% guarantee, are the ones you're looking at 3% or 4%?

 

[Life]

Re: NY LIFEWholle Life which Column?

Good info. I was told 3 percent. and the right column was 6.10. Is there a way for the agent to show the percentages on the illustrations. For some reason they wont send it in email only tell me over the phone. One of the reports I found was a full disclosure report wl04hist2.xls...but it wont let me access it again. maybe someone has a membership.

The polices you have... have they met or exceeded the right column without adding any other funds but scheduled premium payment? Next week I should receive more info and will contact you.

I don't think that reducing the right coulmn or the "non guarenteed current" column 10% or 20% will be enough...40 to 50% might be the correct figure to show a 20 or 30 year return. If they are showing over 6 percent in third column.

 

[scagnt83]

Re: NY LIFEWholle Life which Column?

I am a client looking to replace a vul with a whole life...I didnt know the 3 columns had different interest rates. What rates should I be seeing when I ask about the three columns of whole life. From what I am reading on the web it appears nylife has an avg of 3.87 over 10 20 years and I am guessing its just under the midpoint column.

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Found the answer...the column that most realistic is just under the mid point. NY Life has good dividends but the illustrations are not matching customers in 10 and 20 year marks...falling way short with the third column for whole and custom whole life illustrations/policies.

You seem to be confusing two different terms.

Im a former NYL career agent and still have access to their products to an extent now as an indy.


The right hand column which is showing 6%, is not showing a 6% interest rate or what you seem to be referring to: Rate of Return.

It is showing a 6% Dividend Rate.

The actual rate of return will be slightly lower than that.

The 3.87% you are referring to is most likely the average Rate of Return. NYL has a higher average dividend rate than that. I do not know the exact number, but going back to 1990, it has never been below 5.5%.

In fact, back in 1990 the Dividend was 10.25%.
It has decreased since then down to the current 6%.
It has decreased because WL Dividends are largely dependent on interest rates, more specifically the 10 & 20 Treasury, which have steadily declined over the past 20+ years. So it was not just NYL's Dividends that dropped, it has been everyone. Historically NYL has kept some of the highest Dividends on the market.


But, Dividends are different than Rate of Return.
Dividends help increase Cash Value, but a portion of them also go to increase the Death Benefit, and to pay for the internal expenses of the policy.

So the actual Rate of Return will be slightly lower than the Dividend.
How much lower depends mainly on the Cost of Insurance and internal expenses. Over 20+ years you can expect 1% to 2% lower depending on health, assuming it is a fully overfunded (OPP in NYL lingo) policy. (meaning the maximum OPP without making it MEC)


I am familiar with the 3.87% number you referenced (if its the study from national underwriters that I think it is). That is a Rate of Return figure. I know for a fact that over the past 20 years the DIVIDEND has never been that low.

But as others have mentioned, that study is based on just one policy type, one single gender rating, one single health rating, one single Base/OPP blend, etc.


What you want to know is what is the likelihood that your policy will perform like the right hand (current) column.
Considering that WL Dividends are largely dependent on interest rates, and we are currently at historical lows for interest rates.
There is a good chance it will perform close to what the Current (right side) illustration shows. I would expect 0.5% less just to be on the safe side.



Here is the thing about Dividend Rates; they vary. If you look at a comparison of the top companies they all have years that are slightly better or slightly worse than other companies. But over 20 or 30 or 40 years, all of the major mutuals have averages very close to each other.

But there is something more important than Dividend Rates!!
That is how much they charge you to access your money!
If Policy A has $500k in it, and Policy B has $450k in it, Policy A with $500k might not be the best choice.
If the terms of the Loan are more expensive than Policy B, then B might actually pay out more money.



Are you working with an agent? It halfway sound like you are and it halfway sounds like you are not... you need to be... especially doing an exchange.

You also should shop the market.
It sounds like you want certainty in how many years you will have to pay premiums.... a traditional WL will not do that for you, especially in 5 years. The only way to do that is with a UL or IUL.
And if you plan to access that Cash Value then there are less expensive Loan options out there than NYL. There are actually "wash loans" available with some companies.

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Good info. I was told 3 percent. and the right column was 6.10. Is there a way for the agent to show the percentages on the illustrations. For some reason they wont send it in email only tell me over the phone. .

Ok. So you are working with customer service reps... get an agent! The knowledge level of the intricacies of these policies of the average customer service rep is scary at best.

An agent does not cost you a dime more. And could very well save you many dollars in many different ways.

 

[LGilmore]

Re: NY LIFEWholle Life which Column?

"I don't think that reducing the right coulmn or the "non guarenteed current" column 10% or 20% will be enough...40 to 50% might be the correct figure to show a 20 or 30 year return. If they are showing over 6 percent in third column."

It would help if I knew what you were looking at. Can you attach your illustration?

As far as have my policies met the illustration? Couldn't tell you for certain because I have pulled money out, put money in as the years have gone by. I just know when my annual statement comes my cash value gain for the year has been about 2.5 times what I paid in premiums and getting bigger each year. But I am not doing my policy the way it sounds like you are. I continue to put premiums in 20+ years into the policy because it is nice to see the money go in and continue to grow the cash values and death benefit for the policy. I could stop and use that money elsewhere, but you know what? I kinda like to have something investment wise that doesn't kick me in the nuts every economic cycle or so. I do other things investment wise and the thing about whole life is it is extremely boring and reliable. Lose enough money over the years with other "investments" and you'll understand that point to own something like that.

I really don't use illustrations to sell whole life for some time now. It's really a product that if you learn how it works over time the concept makes great sense.
Usually the problem you run into is somebody compares it to something that really isn't the same. Usually comparisons are WL vs. a stock MF which have very little in common with risk profiles. One lets me sleep at night, the other keeps me up.

Anyway scagent83 tells the same story with much nicer words than me. I think he's more elegant, but I'm more grizzled.

cheers.

 

[westcoast]

Re: NY LIFEWholle Life which Column?

either of you guys would do. lol, as soon as you have thee policies thought out there is another variable to consider…good stuff