Whole Life Introduction - New York Life

Spouse's Policy Purchase Option, or SPPO Rider

At the time of the insured's death, this rider gives the beneficiary who is the Insured's spouse (or family member in NY) the guaranteed right to purchase a new paid-up life insurance policy on his or her life without evidence of insurability. This rider is available on whole life policies at no additional cost. Often overlooked by new agents, it can be an extremely valuable rider where the surviving spouse needs insurance, but is highly rated or uninsurable. The spouse can apply the policy proceeds payable to him or her to purchase a new single premium paid-up policy. The rider provides that when the insured dies, the spouse, if a beneficiary, has the guaranteed right to purchase a new paid-up policy on his or her life without evidence of insurability. This rider can allow the spouse to apply the policy proceeds payable to him or her to purchase a new single premium paid-up policy. The rider is called RPPO in NY.

Paid-Up Additions

Coverage can be increased by using dividends to purchase additional paid-up insurance. This can also increase the policy's cash value.

Chronic Care Rider

Designer to help protect policy holders from the financial hardships of chronic care. Benefits. This Rider provides policy owners the opportunity to accelerate a portion of their life insurance policy's base face amount, should the insured become chronically ill. An additional living benefit to whole life policies is that it is guaranteed paid-up when the CWL base policy is paid-up. In California the rider is known as Chronic Illness Rider. This rider does not provide long-term care insurance nor is this rider a California Partnership for Long-Term Care program policy. This rider is not a Medicare supplement (policy or certificate). There is an additional charge for this rider.

Cash

Dividends are always considered a return of premium and are generally not taxed.

Dividend Accumulation

Dividends can be left on deposit with New York Life to earn interest. Note that the interest earned on dividends on deposit is generally subject to income taxation.

Premium Payment

Dividends can be used to pay part or all (if sufficient) of the policy premium.

Paid-up additions can be withdraw tax free, but only until they exceed the basis in the policy.

Life insurance is generally treated on a FIFO or first-in, first-out basis from an accounting standpoint. The first money put IN to the policy, the premium consists of after-tax dollars. Those same dollars are considered the first money to be taken OUT of the policy when withdrawals are made. By contrast, withdrawals that exceed the policy owner's basis in the policy are considered pre-tax dollars and thus are subject to income taxation.

Premium Deposit Amount, or PDA

This gives clients the opportunity to make a single deposit to prepay up to 14 discounted annual premium payments on any new Custom Whole Life (CWL) or Custom Survivorship Whole Life (CSWL) policy without creating a modified endowment contract (MEC). The money in the Account earns a competitive interest rate that 's locked in at the start of the agreement period while the money is in the account. Each year, the policy's annual premium is paid from the PDA, using the deposit and interest earned. If the remaining PDA balance is insufficient to fully fund a future annual premium, the remaining balance will be applied to the policy as a partial premium payment. Any interest earned on the PDA will be taxable. Clients can withdraw money in PDA, but with a surrender penalty.

Policy Purchase Option, or PPO Rider

This is one of the riders that protects the future insurability of the insured. It can be an ideal rider to attach to a child's policy to guarantee the future insurability of the child. It gives the policy owner the right to purchase additional insurance, up to $150,000, on Scheduled Option Dates and Special Option Dates linked to life changes that can necessitate an increase in life insurance coverage. No evidence of insurability is required. There is an additional charge for this rider. It can allow a young individual to purchase significant amounts of insurance in the future over their lifetime without having to re-qualify medically and prove insurability.

Dividend Option Term, or DOT Rider

This rider is a combination of decreasing the term insurance and permanent paid-up additional insurance. A mixture of term insurance and whole life insurance is determined equal to the prospect's desired face amount. Adding this rider to a Whole Life policy can help increase the amount the prospect can pay into the OPP rider without causing the policy to become a Modified Endowment Contract (MEC).

Option to Purchase Paid-Up Additions, or OPP Rider

This rider is a popular and valuable rider that can help to "turbo-charge" a whole life policy. It gives flexibility to a whole life policy and allows the insured to increase not only the death benefit of the policy but also the cash value. When active, it allows clients to purchase paid-up additional insurance without requiring evidence of insurability. This increases the policy owner's life insurance protection and helps build cash value. There is an up-front expense charge for all OPP purchases.

Disability Waiver of Premium Rider

This rider provides additional protection in the event that the insured has a qualifying disability for a period of six months or more. New York Life will pay the policy's premiums as long as the insured has a qualifying disability. There is a charge associated with this rider for certain policies.