When it comes to life insurance one of the premier names in the industry is New York Life. New York Life makes our list for the top dividend paying whole life insurance companies. NY Life has dominated the advanced markets arena for years and boasts some of the top producers in the industry, year in and year out.
In the following New York Life review we will focus on the company’s history, strong ratings, whole life insurance policies, and the unique features offered.
Review of New York Life Whole Life Insurance
When seeking out the best life insurance it is imperative that you familiarize yourself with the different carriers in the marketplace before you make a decision for any one company. The good news is that the team at insuranceandestates has compiled life insurance reviews from the top dividend paying whole life insurance companies.
About New York Life
New York Life was founded in 1845, making the company over 172 years old.
New York Life is a mutual company. In fact, New York Life is the largest fortune 500 mutual insurance company.
What is a mutual insurance company?
Mutual insurance companies are not owned by shareholders but rather by the participating policyholders, who share in the ownership rights of the company, as well as take part in the company’s profits through dividends.* Mutual companies are privately held and operate for the sole benefit of policyholders, rather than for the benefit of stockholders.
New York Life was the first company to pay a cash dividend to policyholders.
For 2016, New York Life’s dividend interest rate was 6.2% and the company will pay participating policy holders a total of $1.77 billion in dividends in 2017, a 5% increase from 2016.
*dividends are paid to participating policy owners.
New York Life Ratings
New York Life is one of the most financially secure companies available, as is reflected in it perfect 100 out of 100 Comdex ranking. New York Life receives these high marks due to its commitment to limiting risk, its competitive advantage in the marketplace, and its large capital reserves of over $538 billion of assets under management as of the end of 2016.
NY Life’s ratings as of August 2016:
- A.M. Best rating A++
- Fitch rating AAA
- Moody’s Investor Service rating Aaa
- Standard and Poor’s rating AA+
- Comdex Ranking 100
Additionally, although not accredited with the BBB, New York Life Insurance Company has an A- rating with the BBB, which demonstrates the Company’s commitment to serving its customers.
New York Life Products
New York Life is focused on long term care insurance, mutual funds, annuities and life insurance.
LTC Select Premier
- Reimbursement long term care policy
- Domestic and International Equity Funds
- Bonds and Dividend Paying Equities
- Non Traditional
- Guaranteed Income Annuities
- Fixed Annuities
- Variable Annuities
- Term Life Insurance
- Whole Life Insurance
New York Life’s Life Insurance Policies
Although New York Life is known more for its stellar whole life insurance, the company offers both term life and whole life.
Although there are benefits to both types of coverage, in our opinion there is a clear winner in the battle between term life vs whole life insurance.
Benefits of Term Life Insurance
- Lower Initial Cost
- Income Protection
- Mortgage Protection
- Conversion Option
Benefits of Whole Life Insurance
Although not exhaustive, below are some areas where whole life insurance can be extremely beneficial when combined with a diversified asset portfolio:
- Business Succession Planning
- Buy Sell Agreements
- Key Man Insurance
- Estate Planning
- Infinite Banking
- Executive Bonus Plans
- Deferred Compensation Plans
- Retirement Planning
- Wealth Building
New York Life Insurance Policies
In our opinion, cash value life insurance is the way to go. New York Life whole life insurance is one of the best out there. However, if you are considering term life insurance then pick a term policy that can be converted into a top of the line whole life insurance policy. Alternatively, you can always get a smaller whole life policy and add a term life rider to maximize your death benefit, but also begin growing your cash value.
New York Life Term Life Insurance
Term life insurance allows you to have a large guaranteed death benefit for a lower initial cost than whole life insurance.
New York Life Insurance Company offers 10, 15 and 20 year term lengths.
New York Life’s term life insurance is convertible which allows the insured to convert all or a portion of the policy to permanent coverage prior to the end of the term or age 70. The advantage is that you can get a lot of coverage for a low cost while your income is lower, and then convert that coverage to a superior policy down the road once you become more established.
New York Life Whole Life Insurance
New York Life’s custom whole life insurance provides many flexible options, including ordinary coverage to age 100 as well as limited pay whole life. Whole life insurance lasts your entire life and offers specific guarantees, including:
- Guaranteed death benefit,
- Guaranteed cash accumulation and
- Guaranteed level premiums.
Additional cash value growth is available through dividends. Although not guaranteed, New York Life has paid dividends to participating policyholders for over 100 years.
Dividends are valuable and can be used to:
- Purchase paid up additions
- Pay Premiums
- Earn interest with the company
- Cash Out
Additional Benefits of Whole Life Insurance
Tax free life insurance policy loans
You can take out tax free life insurance loans by using your cash value as collateral. New York Life’s interest rate on policy loans is variable based on Moody’s Corporate Bond Yield Average.
New York Life practices non-direct recognition. When you take out a loan, New York Life credits your interest and dividends to your total cash value, as if you did not have an outstanding loan.
That way your money in your policy continues to grow, while at the same time you can grow your money you borrowed through other cash flowing assets. This is what makes participating whole life insurance such a great asset.
Tax deferred cash value growth
Under IRC 7702, cash value life insurance grows tax deferred. And if you utilize the policy correctly you will never need to pay taxes on the cash value growth.
Additional tax deferred cash value accumulation can be acquired through the use of paid up additions. Paid up additions allow you to contribute more premium into the policy, up to, but not exceeding the modified endowment contract limit.
Tax free death benefit
You beneficiary receives the death benefit income tax free. The only way a death benefit is taxed is if your estate exceeds the federal estate tax exemption limit. If you have a large estate, careful asset protection planning is necessary.
New York Life Insurance Policy Riders
Conversion Option – convert all or a portion of your policy to whole life insurance.
Accidental Death – additional death benefit payout if death is due to an accident.
Children’s Insurance – term rider for your kids.
Chronic Care – access a portion of your death benefit if you become permanently chronically ill.
Living Benefits – allows access to a portion of your death benefit if you are diagnosed terminally ill with a life expectancy of 12 months or less.
Spouse Paid Up Insurance Option – if your spouse is your beneficiary, this rider allows your spouse to purchase a paid up life insurance policy with no evidence of insurability, i.e. no exam or health questions.
Whole Life Insurance Policy Riders
Option to Purchase Paid Up Additions – option to buy paid up additional life insurance to increase the policy’s death benefit and cash value.
Dividend Option Term – Combines decreasing term option with paid up additions dividend option.
Disability Waiver of Premium – premium is waived if you become totally disabled for 6 months or more.
Policy Purchase Option – guarantees the addition of more coverage at certain ages and life events with no evidence of insurability. This rider is a must have if you are considering life insurance for your kids.
Long Term Care Insurance
Thanks to advancements in medicine, people are living longer than ever. In the U.S., an average 65 year old man today can expect to live to age 83, and an average 65 year old woman can expect to live to age 85. And these numbers are improving every year. And with an increase in life expectancy comes an increase in the need for long term care and the money to pay for it. Enter long term care insurance.
Some companies attach long term care onto life insurance as a rider. However, New York Life offers stand alone long term care insurance. The LTC product offered by New York Life is called NYL Secure Care. NYL Secure Care is endorsed by AARP. AARP and New York Life have a long standing business relationship, partly due to AARP’s over 37 million member base.
NYL Secure Care
NYL Secure Care provides long term care insurance to help you pay for the rising costs of long term care. Currently, in home care and assisted living facilities cost roughly $50,000 a year. And staying in skilled nursing facilities can run as high as $100,000 a year. Long term care insurance can greatly help you pay for the high costs associated with long term care, providing wealth preservation and protecting your legacy.
One unique benefit of NYL Secure Care is that policyholders participate in dividends. After the policy has been in force for 11 years, you can receive dividends that will help lower your long term care insurance cost.
The LTC insurance policy from New York Life provides income benefit periods of 2 years up 7 years. You can choose from three elimination period options of 90, 180 or 365 days.
A waiver of premium is available which allows your policy premiums to be waived upon approval of your LTC benefit claim.
An inflation protection rider is available. The inflation protection rider helps your policy keep up with inflation by increasing your LTC benefits each year. You can choose from 5% or 3% compound interest growth, 3% simple interest growth, and CPI Auto, which tracks the consumer price index.
Interested in seeing how New York Life compares with other companies offering long term care insurance? Please give us a call today to speak to an experienced long term care life insurance agent.
New York Life Review Conclusion
New York Life is an excellent choice for cash value whole life insurance. However, the real question is whether or not New York Life is the right company for you based on your specific needs, goals, and objectives.
Have questions or would you like to see an illustration of New York Life or any of the other top cash value life insurance companies we represent? Give us a call today for a free life insurance consultation with an advanced markets professional.