On April 24th, 2020, New York Life announced additional policyowner protections: the 12-Month Repayment Program and the Financial Hardship Program. The programs work differently depending on when your policy should have lapsed, foreclosed, or entered the grace period.
Any policy that was issued and had the first premium paid prior to March 24th, 2020, and that would have lapsed, foreclosed or entered the grace period between March 24th, 2020 and June 23rd, 2020 was able to enroll in either the 12-Month Repayment Program or the Financial Hardship Program:
12-Month Repayment Program
This repayment plan gives you the ability to pay for any scheduled premiums on Whole Life and Term policies that were due but not paid during the Do Not Lapse Period to repaid over a 12-month period. Similarly, this program allows Universal Life and Variable Universal Life policies to pay Monthly Deduction Charges that were due but not paid during the Do Not Lapse period, plus an amount to keep coverage active for an additional two months to be repaid over a 12-month period. This balance is called the “Total Repayment Amount”. There is no proof of financial hardship required for this program. The easiest way to get more details about this program is to visit https://www.newyorklife.com/articles/repayment-programs-terms-and-conditions.
The full terms and conditions for how the program works can also be found here; however it is important to understand the following details:
- In order for your coverage to remain active, you will need to resume paying your scheduled premiums (for Whole Life and Term policies) or you will need to pay an amount sufficient to keep your policy’s cash surrender value (or net cash value where applicable) positive (for Universal Life and Variable Universal Life policies) once the Do Not Lapse period ends (the Do Not Lapse Period is currently scheduled to end on June 23rd, 2020)
- You will also need to begin repaying any amounts that were required to keep your coverage active, but not paid, during the Do Not Lapse period on your policy. We will notify you when these payments begin, but it will not be before August 2020
- Each month you will be billed an amount that is equal to one twelfth (1/12) of the “Total Repayment Amount” due (“Monthly Repayment Amount”)
- If you do not pay this Monthly Repayment Amount, the policy could be cancelled or may lapse
- For Whole Life policies any Policy Loan Interest not required to satisfy an excess loan condition, and Option to Purchase Paid-up Additions (OPP) payments that were missed, will not be included as part of this repayment program
Financial Hardship Program
You may qualify for additional assistance if you can demonstrate financial hardship due to COVID-19. You can elect to apply for an extended Do Not Lapse period for up to an additional 90 days. After that time, you will automatically be enrolled in a 12- or 24-month interest free repayment plan. The easiest way to get more details about this program is to visit https://www.newyorklife.com/articles/repayment-programs-terms-and-conditions.
The full terms and conditions for how the program works can also be found on here, however it is important for you to know the following:
- Approval is required for this program
- This program can extend the Do Not Lapse period of your policy for up to an additional 90 days
- This additional Do Not Lapse period begins on June 24th, 2020 and is subject to a 180-day maximum from when your policy first entered the grace period
- During this additional Do Not Lapse period, your policy will not be cancelled or lapsed for any reason
- Once this additional period ends, you will automatically be enrolled in a repayment plan giving you the ability to pay the scheduled premiums (for Whole Life and Term policies), or the Monthly Deduction Charges that were due but not paid during the additional Do Not Lapse period, plus an amount to keep coverage active for an additional two months (for Universal Life and Variable Universal Life policies)
- You will need to resume paying your scheduled premiums (for Whole Life and Term policies) or you will need to pay an amount sufficient to keep your policy’s cash surrender value (or net cash value where applicable) positive (for Universal Life and Variable Universal Life policies) once the additional Do Not Lapse period ends in order for your coverage to remain active
- If the Total Repayment Amount is $3,000 or more AND your policy has a face amount below $1 million, you will be given 24 months to repay the Total Repayment Amount; otherwise you will be given 12 months to repay this amount
- For Whole Life policies, any Policy Loan Interest not required to satisfy an excess loan condition and OPP payments that were missed will not be included as part of this repayment program
- Policy actions that are allowable during contractual grace periods will continue to be allowed during the initial Do Not Lapse period and any extended Do Not Lapse period
Policies that are Paid to Date through June 23rd, 2020 (the end of the Do Not Lapse period) and either miss a premium payment (Whole Life and Term) or enter the grace period (Universal Life and Variable Universal Life) between June 24th, 2020 and December 31st, 2020 are only eligible for the Financial Hardship Program
In this situation, the Financial Hardship Program will differ from the description above as follows:
- New York Life will extend your grace period to 90 days
- For Whole Life and Term policies, this means an additional 59 days beyond the contractual grace period
- For most Universal Life and Variable Universal Life policies, this means an additional 28 days beyond the contractual grace period3
3VUL policies that fail monthly deduction processing due to unpaid loan interest will receive an additional 59 days beyond the contractual grace period.