Your Whole Life Policy Illustration
Life insurance is an important purchase. Be sure to examine all the documents.
How can you tell if the policy you are considering is right for you? You want the best possible coverage, from a financially strong company,. The product you are considering is based on dozens of factors.. So evaluating your policy involves more than a quick glance at the premium table and insurance amount. You should also review each page of your policy and your policy illustration with your agent.
How to read a policy illustration
An illustration is not part of the policy and is not a contract. However, it is a valuable tool to help your agent explain your policy.
A policy illustration for a permanent cash value policy is a computer-generated document that shows (or illustrates) your policy values over time. Your illustration provides a year-by-year snapshot of a policy's guaranteed minimum values and non-guaranteed values. Specifically, it shows the premium outlays, guaranteed cash values, guaranteed death benefits and non-guaranteed cash values, and non-guaranteed death benefits based on the company's current dividend scale, which is not guaranteed.
A few pointers
Review the entire document, starting with the proposal page. This page identifies the type of policy, face amount, premiums and other relevant information. The rest of the illustration consists of columns that show changing values year-by-year.
Recognize the difference between guaranteed and non-guaranteed cash values. Your guaranteed cash values are just that — the policy's guaranteed values. Provided all premiums are paid when due and no policy loans are taken, this is the amount of cash value in the policy each year — guaranteed.
Your total cash value is the sum of the guaranteed values and the non-guaranteed values. Your total cash value provides an idea of how your policy values could look over time. The figures are based on the company's current dividend scale. They should not be viewed as guarantees or a prediction of future performance.
Ask questions. An illustration can be fairly complicated, so keep in mind that the only dumb question is the one you don't ask. Your agent will be glad to explain information or footnotes that you do not understand.
New York Life Insurance Company is a mutual company. That means a policy owner of a participating policy shares in the company’s distribution of surplus and receive dividends when they are declared by the company’s board of directors. Unlike dividends from stock companies, these are considered to be a partial return of premium (and, by the way, are not taxable as income). Note that dividends are not guaranteed and are based on the policy’s applicable dividend scale.
Dividends can be used a number of ways. They may be paid in cash, used to help pay premiums, leave on deposit with New York Life to earn interest or used to purchase additional coverage
If you have any questions about your policy illustration, contact your agent.