NY Life 2010 Dividend Interest Rate?

kenbill

Expert
30
Does anyone know New York Life's 2010 dividend interest rate for their whole life product?

Here are some mutual companies' 2010 dividend interest rate comparison:
Mass Mutual: 7%
Guardian: 7%
Northwestern Mutual: 6.15%
New York Life: ???

2009:
Mass Mutual: 7.6%
Guardian: 7.3%
Northwestern Mutual: 6.5%
New York Life: 6.14%

2008:
Mass Mutual: 7.9%
Northwestern Mutual: 7.5%
Guardian: 7.25%
New York Life: 6.79%
 
Are these the interest rates they are paying on dividends which have been left on deposit?

This is in reference to recognition of dividends with outstanding loans I'm guessing. The answer would be for Mass and NY Life yes, and for Guardian and NML no. NML would be lower and Guardian would be higher.
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And to answer the dividend interest rate at NY Life for 2010 question, it's 6.11%
 
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Thanks, BNTRS.

I am reviewing the 2009 FORTUNE 500 list. It's interesting to see that NY Life earned the most profit (+$683M) in 2009 among the mutuals. Mass mutual lost $115M, NWM earned $321M, Guardian earned $83M. NY Life currently has the highest surplus ratio and surplus amount, yet the lowest dividend interest rate when calculating the dividend scale among the big mutuals. Whether they will announce a higher dividend rate in the future, we will wait and see.
 
NY Life currently has the highest surplus ratio

That's not correct. They have the second highest surplus ratio. It goes Guardian, NYLife, Mass, then NML. Unless you are privy to something I'm not.

They all make their announcement for the following year near the end of the current year.

Based on assets and current financial performance, I wouldn't expect any of them to increase dividend rates a lot unless we see a surge in business and/or financial market performance throughout the rest of the year. They all worry a lot about sacrificing their credit ratings, especially NML and NYLife.

Also, I would point out that despite having the highest revenues, NY Life pays the lowest amount of dividends as a percentage of earnings than any of the four.
 
That's not correct. They have the second highest surplus ratio. It goes Guardian, NYLife, Mass, then NML. Unless you are privy to something I'm not.

Not so fast my friend! (which reminds me I can't wait for college football season). The above is correct based upon the four listed;
  • Guardians surplus ratio is 14.8%
  • NYLife's is 13.1
  • Mass's is 12.4
  • Northwestern's is 9.5
The mutual that was not listed however was Penn Mutual.....their suplus ratio is 19.3%. I do a lot of business with Mass and Guardian (Mass is my B/D), however I have been using Penn more and more lately. Their Comdex is a 96 and their life insurance sales growth in 2009 is mind-blowing....they're now about half the size of Guardian.

Just an interesting side-note to this conversation......
 
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Not so fast my friend! (which reminds me I can't wait for college football season). The above is correct based upon the four listed;
  • Guardians surplus ratio is 14.8%
  • NYLife's is 13.1
  • Mass's is 12.4
  • Northwestern's is 9.5
The mutual that was not listed however was Penn Mutual.....their suplus ratio is 19.3%. I do a lot of business with Mass and Guardian (Mass is my B/D), however I have been using Penn more and more lately. Their Comdex is a 96 and their life insurance sales growth in 2009 is mind-blowing....their now about half the size of Guardian.

Just an interesting side-note to this conversation......

Out of curiosity, how do the big 4 plus Penn Mutual compare to Ohio National?
 
No one said there wasn't another company out there that had a higher capitalization ratio. I was just pointing out that all the information I have would say it's incorrect to state that out of the four New York Life has the highest capitalization ratio.

Regarding Ohio National, they are a little larger than Penn Mutual asset wise, are slightly lower on the Comdex, and rank near the bottom of our growing list on capitalization ratio (oops made a typo there)--it's still a good cap ratio.
 
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The order depends on whether you count the surplus note in the capitalization ratio calculation. NY Life issued a $1 billion surplus note at the end of last year with interest rate of 6.75% mature in Nov 2039. This was included in the surplus on the consolidated balance sheet in 2009. I agree with the comment that they paid the lowest dividend as % of earnings among the big four.

Full disclosure published 2010’s whole life historical performance report. This report is useful because it shows the actual performance rather than illustrated values.

20 year actual IRR on cash value ($250K DB, male NS preferred, age 45).

NML: 5.11%
Savings Bank Life of MA: 5.11% (anyone knows about this company?)
NYL: 4.17%
Mass Mutual: 3.74%
Guardian: 3.59%

One thing to note is that the more premium it can be put into the policy under the same DB, the higher the IRR if everything else is the same. NML’s premium is the highest, $5815/year. Other companies’ premiums are in the range of $4700 to $4800. SBLM has the lowest premium ($4388) and the highest IRR on CV.
 
I always thought it would be much more informative to see the IRRs based on an equalized premium across the companies. After all, if you are concerned about CV IRR, then you are almost by definition looking at the savings/investment component of WL, and you are making your decision of how much to buy based on premium (budget) rather than death benefit. For instance if you took that MM policy and put in another $1k/yr in the policy, how would the IRR look compared to the NML policy?
 
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