Questions About New York Life Insurance

[Linny]

Hi, i was wandering if there is anyone here who works for NYL. My dad has worked for NYL for over a decade, and I've recently started learning a lot about Whole Life. I just want to get a third party confirmation of what he has said regarding OPP.

Well, he said that OPP has a one time fee of 3% each time money has been put in (excluding loan repayments) and the OPP directly receives the dividend rate without any insurance fee or others. So if the dividend rate is 6%, and a person puts in 10,000, his 9,700 (-300 for one time 3% fee) would see it increase by 6%? Is that correct?

Also, regarding OPP loan, he said that up to 90% of OPP amount that one has can be taken out on a loan at any time. When a person takes out a loan, the loaned amount still gets dividend and the loan interest rate is generally lower than the dividend rate (ie: 2012 dividend is 5.8% while loan interest is 5%. In such situation, a person would still see his loaned amount increase by .8%?)

Thanks in advance. And, yes, I know dividends are not guaranteed.

 

[BNTRS]

I'm going to apologize in advance since I won't really be able to give this as much attention as I should as I have an appointment coming in any minute. But not entirely. The part where this is incorrect is the 6% yield on the money dumped in as PUAs (PUA=OPP, semantics).

The dividend rate is a portion of the dividend paid that is based off the policy reserve. The exact amounts you'll never know (this is where the Whole Life Insurance is bundled and cryptic criticism starts...and ends for the most part).

The actual dividend paid is based on the dividend interest rate (a rate some companies love to quote, but it's only part of the puzzle and means basically nothing as a comparative metric among companies), mortality experience, and operating costs.

The comment about dividends being paid regardless of loan is spot on, as NYL is a Non-direct Recognition (NDR) contract company. The alternative to this is Direct Recognition where dividends are adjusted when policy loans are taken.

Got to go...

 

[STIBROKER]

Hi, i was wandering if there is anyone here who works for NYL. My dad has worked for NYL for over a decade, and I've recently started learning a lot about Whole Life.

Are you going to work for New York Life Insurance..................

 

[Linny]

Are you going to work for New York Life Insurance..................

Probably when he retires in like 8 years. Till then, law school and some work in that field. Any reason why you were asking?
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I'm going to apologize in advance since I won't really be able to give this as much attention as I should as I have an appointment coming in any minute. But not entirely. The part where this is incorrect is the 6% yield on the money dumped in as PUAs (PUA=OPP, semantics).

The dividend rate is a portion of the dividend paid that is based off the policy reserve. The exact amounts you'll never know (this is where the Whole Life Insurance is bundled and cryptic criticism starts...and ends for the most part).

The actual dividend paid is based on the dividend interest rate (a rate some companies love to quote, but it's only part of the puzzle and means basically nothing as a comparative metric among companies), mortality experience, and operating costs.

Hmm, that's pretty confusing lol. Do you work for NYL? What would be the appeal of putting money in OPP if one doesn't know exactly what he will be getting from it?