NYL Custom Whole Life Question

[kenbill]

I reviewed a policy illustration from a NY Life agent recently. It is a 10 year pay custom whole life policy. What I found out is the cash value (net of premium) grows by 4.6% from year 9 to year 10, but grows by 6.5% in year 11 and continue to grow at this level for 10 years (under the current dividend assumption). Under the guaranteed column, the CV grows by 3.5%.

It seems the policy has some kind of enhancement in dividend treatment or CV growth I am not aware of right after year 10 (the policy paid-up date). Did anybody compete with the CWL policy before and know the reason?

 

[LGilmore]

Ask about paid up additions, they also pay dividends along with the policy.

I worked for NYL a decade ago for a decade. I own their whole life. It works pretty good (as I am sure others do). In the years past ten, it does seem to pick up in value. I as I posted elsewhere in my 20th year my cash value increase (guarantee +dividend) was about 2.5 times my annual premium for that year. Longer works better.

 

[BNTRS]

This is the product where you can choose a year to make the policy guaranteed paid up, correct?

NYLife has a pretty low dividend rate at the moment, and hasn't been well known for low guaranteed mortality and expense charges. I'd like to see the illustration if you could provide it.

 

[scagnt83]

Most WL policies start to grow at a higher rate after year 9 or 10 its just the nature of the product, there is a certain amount that has to go to the COI before the CV can really start to gain.

I sold some CWL policies when I was with NYL. Its a good WL policy if you are dead certain you dont want to contribute past a certain year. And I think it receives a slightly higher dividend than the traditional WL; its also an overfunded policy by internal design, you can overfund it a bit more than required premium, but not much.

 

[kenbill]

BNTRS, I scanned the illustration from the client. The first file is the 10 pay custom whole life. The second file is the regular whole life, using dividend to pay the base after 10 years. If you look at the CV change in year 11 for the 10 pay CWL page, the % is 6.5%. That's why I suspect they have a different dividend (or expense) treatment for their custom whole life product because their current dividend rate is only 6.11%.

Client profile: female, age 32, select preferred class, non-smoker