Welcome back to the Infinite Banking With series. In today's video, we're going to be looking at New York Life. One of the biggest questions we get is, what is the best insurance company to do infinite banking with? And newsflash, that's impossible to answer straight up. But we want to do a series with all the top companies out there showing where they shine, some pros, some cons. And in this video, we're going to talk about the company, when it was founded, the company strength, the dividends, how loans work. We're going to look at the average lapse ratio. We're going to look at illustrations, the cash flow, the front load design. We're going to look at how the PUA riders work. We're also going to go into the advantages, some of the considerations. We're also going to look at an agent snapshot. Newsflash, New York Life does business in New York. So just thought I would get ahead of that because not every carrier does business in New York, but I think that is something that is somewhat explanatory. But New York Life is a great company and I very much look forward to going through this series. Alden, I just want to give you your flowers. man, you have done a phenomenal job doing research on this. There's nobody else, nobody else in the space that has done such a video series on all these companies. And so very grateful that we as a company get to do this and grateful that you have been the brains behind the operation making that happen. So without further ado, welcome. Absolutely. Well, I'm really glad, Caleb, you did the intro. You got the dad joke out of the way, so I don't have to make one. So we can rock and roll forward here, guys. We're looking at IBC with New York Life. Let's dive in. So a couple of big things we just need to understand. New York Life is a massive, massive company. And so they were founded in 1841 as a mutual insurance company. They've been paying dividends for 171 years, and they are the second largest mutual insurance company in the United States. The only one that's bigger is Northwestern Mutual. And so a lot of really good things going for them initially. So New York Life is a captive insurance carrier. What that means is that within their career agency system, so people who are employed full-time to sell. and produce products by New York Life to their clients, those agents are almost required, almost, there's some considerations there, but almost required to only sell New York Life. And so because that's their primary distribution channel, working as an outside agent, what we call an independent agent or some people call the broker, can be difficult. And we're gonna go into a little bit of detail about how we can work with that particular company. So diving into the numbers, we've got another big- B on the screen, we've got a declared dividend of $2.5 billion U.S. dollars distributed to policyholders. That's a very large number, hence second largest mutual carrier. They're also projecting a very strong dividend interest rate, about 6.2%. Now, something that Caleb's mentioned, I've mentioned it before on this show and on our channel, is that the dividend interest rate itself, it really doesn't matter that much. It just shows the health of the insurance company as it changes over time with the marketplace. So if we see dividends high while interest rates are high, that makes sense. If your dividend is super low, but interest rates are super high, you might have a problem. What we look at more often is internal rate of return. How is the dividend actually affecting the product with how it can be built? So we're going to go into some more detail there as well. Now, average lapse ratio, 4.7%. Lapse ratio, I've said this before on the channel, this is kind of a new metric for us, but here in this series, we're looking at when a policy is surrendered. So you take the cash, put it in your pocket, walk away. or you take that cash and 1035 it into another insurance company product, or the internal charges of the policy are greater than the cash value available. And so the policy effectively eats itself alive. Those are the situations where a lapse can happen. Lapsing a New York Life policy is about average. The industry says we have about a 5.1% annual lapse rate. New York Life maintains below average on that, about 4.7%. So this just indicates to me that they have a pretty solid product. they have a good understanding of their target market. And they're selling the products that fit the individuals that are selling them to on average as compared to the insurance industry. Some carriers we've looked at higher lapse rates, some carriers lower lapse rates, just something to be aware of as we do these comparisons. So moving on to we've got loan recognition. They are a non-direct recognition carrier. So your loans do not affect the dividend performance or crediting to your policy. As far as the rating is concerned, you can't get any better. New York Life is a behemoth. They're the biggest, the baddest. They've got 100 out of 100, which means they're on the top 1% of insurance carriers in the United States. Very few insurance carriers can claim that number one spot with a Comdex of a perfect 100. They also have an AM Best rating, it's the highest rating to give, of A++ superior. So I'm going to make a caveat statement to what I said in our last slide, talking about New York Life as a captive insurance agency. Now I mentioned most of their insurance production is done. internal within their career system by their captive agents that really only work with them. Now, there is a way for us, so independent brokers or independent agents, to work with New York Life. But the caveat... is you have to bring a policy that has an annual premium of over $20,000. So some of the other carriers that we work with, they specialize in really the smaller size policies. New York Life, they're basically saying, bring us the big ones and we'll help you. But anything under $20,000, don't talk to us. So it's give or take, but that's probably a reason why we don't see that many illustrations from a competitive standpoint from New York Life in the infinite banking community. It's just harder to get appointed with that carrier. A couple of things I'll just mention. You're not going to get a better rating. So obviously, if ratings are important, yeah, they're going to be at the top of the list. What's interesting to me, and I don't know if we have the answer in this video series, but their lapse ratio is still below average, which is great, but it's a lot higher than like a mass mutual and a mass mutual is very similar to size. So I would just be curious if I had to guess, if you had to say like, guess which one's higher or lower, I would almost. guess that New York Life, because they have such a strong career side, would be smaller than that. So it's just an interesting note there. Their dividend rate, it's strong. But again, just want to be really clear, we would rather just look at illustrations and the interim rate return where their break-evens are. That's a way better way to just compare. But that's a lot of people want to project dividend rates. The other reason why dividend rates can be important is you can kind of see a trend in the past. So that's valuable when they do that. And then obviously $2.5 billion of distributed policy, like in dividends, that's just a lot of money. That's massive. And so hats off there. And so those are my initial thoughts in seeing the financial strength and performance. Something we see, and this is something I tell my clients as well, is if you're the largest dog in the fight, you don't have to be competitive because your market share is so strong. And so I think that the lapse ratio where we've seen from other top mutuals. theirs is a little bit lower. I think New York Life, they're just not as competitive for the type of policies that we do. And they're also in general, not as competitive in the marketplace. Same thing with Northwestern Mutual. It's just, they're the biggest, they're the baddest. They have the huge amount of policies and a huge amount of agents. So they don't have to be the shiniest object on the shelf. And so it's something to just understand as we start looking at numbers. All right. So when it comes to IBC positioning, where are they on the spectrum, right? Well, first of all, they're not well known for IBC. There's a lot of reasons for it. massive mutual carrier, which is fantastic. There's some flexibility concerns that we'll go into. But I also just think when a carrier is that large and doing that much business, the little tiny pocket of policies that may be used for IBC is minutiae to the amount of policies they actually sell. So they're not super well known for IBC and it is harder for independent agents to work with and get contracted with them, which is, I think, another big part of it. That being said, they're not anti-IBC. I think... It's kind of like if you're a massive water buffalo and you have a fly laying on your shoulder, you don't care. They're not anti-IBC because they just don't have a market share that is significant enough for them to pay attention to. And so they're not anti, they don't support it. They're just a massive insurance company with products that could be used for this particular strategy. One of those products, which we'll look at today, is their Whole Life 100 product. They really only have two types. is whole life 100 or choice whole life, which. allows you to be a little bit flexible with a funding timeframe. Most of the time we're looking at this whole life, 100. A couple of things to note, because New York life, a big portion of their business is the career aspect. That's why they, they're not like they're, they're almost selling point to the people saying like, Hey, you're mainly going to just work with, with us. And you're going to sell New York life. So we're not going to let independent people come in and sell all kinds of products. They do make exceptions for bigger ones. And so that's, that's one thing. to note, but then one of the reasons why they might not take like an anti IBC stance, maybe like a mass mutual is they don't necessarily have to worry about the independent space. And they have a lot more control. And that's another thing to just note is, if you're a career agent, you are an employee of that at that company. And so there's a lot more control that they have. And, you know, we like, for example, if we were in that bucket, we would probably have to get them to approve a lot of our content. our videos and all. And so there's pros and cons. Anytime someone has a career arm, they got a lot more control of what's being said. And so while we're saying they're not anti-IBC, they may have some regulations and rules that make it tough to talk about it, but it's not something that's widely broadcasted. So diving into the geeky nerdy details, we're going to look at a couple of real life insurance illustrations that we've been comparing across these insurance carriers. Now, a couple of things to highlight before we go into the numbers is they do have... pretty good cash value access. It's not the highest. It's definitely not the lowest. They're kind of right in the middle, that average between 80 to 87%. And there's a really interesting promotional going on right now. Through the end of the year, New York Life does this on occasion. They just throw out some really cool stuff. We're able to get close to 85 to 92 is what I've seen percent cash value access in the first year. There's another video. We'll plug it right here floating on my palm. And go take a look at that to get an idea of what I'm talking about. But that's kind of a cool thing that New York Life does. The actual funding of the contract, even though it's a whole life 100, we can be pretty flexible. And so while funding, you should be funding to the max. That's what I say. There's some limits to their paid up additions riders that we're going to go into. So while you're paying it, pay as much as you can of it. But when you're done, just be done and let the policy pay for itself. So when it comes to their policy growth, they have a good growth. I would consider it a little bit on the average side of things. And so the long term internal rate of return, which is that metric that tells us how efficient it is over a period of time, it's between about 3.7 and 4.4% from what I've seen. Now there's always outliers, but that's where the bulk of the illustrations that we look at fall if they're structured properly. Now, starting to dive into the number here, guys, what we're going to see is the same illustration we've been looking at. All right. So $50,000 a year, we're gonna be paying that for 20 years. And then the policy is paying for itself. Now, And when we look at this, first year premium gives us an end of. about $43,000 at the end of the first year. So as a percentage, we're looking at about 84, 85%. Now that's great. That's on the higher end of what's possible with this particular carrier. Death benefit is also fairly strong. Now, one of the things that we've seen in a couple other carriers is there's this aspect of term insurance that's keeping the death benefit level for a period of time. Similar, but not exactly the same story with New York Life. So you can see we actually have a fluctuation down by a couple grand before it starts going up. again. Won't go into the nuance of that, but just understand we put the term on there to give you the ability to put in extra premium. So when we start looking at insurance products and comparing them to other products in the industry, outside of internal rate of return, there's really two other metrics that we like to look at. The first is the capitalization point. So at what point in the policy do I put in a dollar and have more than a dollar in cash value in that year? That's the capitalization point. The next point is breakeven. That's pretty self-explanatory. So if we look at this illustration. A capitalization point is almost year three, but it pushes into year four. So between years two and three, we have an increase in just under $50,000. So we're almost there. And then between years three and four, cash value increases about $52,000. So we put in 50, it goes up 52 in that fourth policy year. So year four, that's the capitalization point. For the breakeven, it's out here in year six. We have put in $300,000 and they're projecting. just over $300,000 in cash value at that time. Overall, I'm seeing pretty average or above average. Early access to cash value, break-even, six years. That's solid. It's really unique. The death benefit goes down slightly and remains pretty dang level. It's actually, it's interesting. It goes down more than what the initial death benefit is. I can't say that we've seen that. in any other carrier yet. So that's unique. And so overall, yeah, I mean, I think from an illustration standpoint, this is probably going to be in the average to above average when we compare all the carriers. Yeah. Early cash value for sure. Long-term performance is kind of where they lag. But if we're looking out here for those taking notes, we're looking at year 20 cash value. We'll start comparing these across carriers. We're at about 1.43 million at that time. death benefit about 2.7. eight. Which, which all then I would imagine that the death benefits a lot smaller than probably other carriers just based off, based off of memory. Yeah. It's kind of all over the board. We have some carriers that are pushing the $3 million mark by this time. And also cash value is a little bit behind the top competitors. It's like we were saying earlier, great carrier, strong performance, but if they're the biggest dog in the fight, they don't have to be as competitive for sure. And especially when you have a captive, when you have a captive Salesforce as well, it's not like they're comparing it to 10 other carriers or three other carriers. And so, Yeah, that's. Well said. Thanks. Thanks for going through the illustration. Next one that we're going to look at is front loads. And front loading can be really valuable because you might want to put money up front, but you don't want to necessarily continue that year in and year out. And so it's great for people that are sitting on money. They want to put it into policy. In a lot of cases, the internal return might be a little bit less, but you have more money compounding. And so over time, you'll usually see greater volume increase, not just on the death benefit, but the cash value side. We use the same product with New York Life. In most cases, we've got that early cash value between 80 to 87%. I did mention before, and the same holds true here with that promo. We have about 85 to 92% in early cash value is possible with the current promo through the end of 2025. Now, flexible funding, this remains true. But the really interesting thing is that because we are using a type of annual renewable term, if we're going to front load a policy, I have to buy more insurance than I need for the long-term funding strategy. So what that means is a lot of extra cost, but only need it for about one year. So what we do is for those types of policies, we usually encourage you to fund for about 10 years and then let the policy take care of itself because we can get rid of that annual annual return after that time frame. As Caleb mentioned, we do have a slightly smaller internal rate of return. It tops around 3.6, 4.3 percent, a little bit less than what we saw on the cash flow side. But to his point, you do have a larger amount of capital within the policy. So looking at this illustration, and this is being illustrated before the end of the year. So we are seeing the bonus in play. This isn't typical for New York life, but we have a initial cash value of just around 90%. So you put in a hundred thousand and then we start lowering that premium down to 50. Now this is funded for that same timeframe of 20 years. Most of the time, I would encourage that we actually drop it after 10, but to keep it apples to apples, we kept it on here. And what we see is now we have a cap point of in year three. We've got an increase in between these two years of just over $50,000. So more money, more compounding, faster capitalization point. And then also from a breakeven perspective, we're still here in year six. But man, are we super close in year five, only about $3,000 shy in year five. Yeah, nothing else I'll add here other than their death benefit models, what they did in the cash flow strategy as well as it starts off higher and then immediately goes down, which is very unique. So it's just an interesting point. Yeah. Then it goes back up again, thankfully. So we're good there. So for those taking notes, again, we'll look at the cash surrender value in year 20 at $1.53 million. Death benefit is just over $3 million as well. Hey, I'm interrupting this video briefly to say if you're serious about using whole life insurance for infinite banking, we have a free gift for you. It's called the IBC Company Guidebook, and it gives you inside access to the data behind these videos. Things like life insurance company conduct scores, their dividend performance, how they approach infinite banking style policy designs. It's all the information we cover in these videos organized in one place for easy reference. To access the guidebook, click the link in the description or pin comment. Now let's get back to the video. Now taking a step back out of the weeds of the actual numbers illustration, let's talk about how you can actually get access to your cash value. So loans can be fairly quick. They are a little bit slower than what I've seen. And as far as average, and I think that also just speaks to their target market, putting money in, taking it out immediately. One carrier we work this does that in two weeks. Most on average are 15 to 30 days. New York Life is closer to the 45 day timeframe. Sometime sooner. It just depends. They are non-direct recognition. So variable loan rate is used. So for loan processing, you can go directly to your carrier or you can go through your agent. It just depends on the loan size. Now, this is nice. I've mentioned before, there's a couple of different ways that we can. assess accrued interest, they use a daily accrual model. So very easy to track through your portal. You can see what that interest is on a daily basis as it grows while your loan is outstanding. Paid up addition flexibility. Now you've seen our other videos. You've seen me on the channel. I talk a lot about flexibility and how important I think it is when it comes to the flexibility within the paid up additions writer at New York Life. They call it something different. It's kind of like Masked Mutual. They make up their own name just because they can. New York Life, They call it their OPP rider. So it's option to purchase paid up additions. There's a couple of things in here that give me pause doing illustrations with New York Life and selling these products. The first is the termination clause. Effectively, if no PUA writer payment is made for three years, the writer just disappears. So they have no option to go long term without using it. To get it back, you would have to requalify for insurance. Go back into underwriting is what I'm saying. The other aspect that's just not ideal. is that Newark Life does not offer a backfill option at all. So a couple other carriers that we work with in the space that have really generous and then mildly generous and then no backfill options, Newark Life, unfortunately, does not have any option for that. This last point, this is the big kicker, in my opinion, for this style of policy with Newark Life Insurance. We have what I would call a step down process to their paid up additions. So to take a step back before we dive into the words, imagine that I'm putting in I'm planning to put in $10,000 a year of annual premium. Let's say five grand of that is paid up additions. I can do that for the life of the policy because it's underwritten and approved that way. If I start to use any flexibility. And let's say in one year, I don't put in that amount of money. I'm limited on what I can do the following year. So when we miss a premium payment, your options for additional PUA drop based off of this schedule. So as you can see, year one, two, three, four, and five all have a step down to what's possible. So if you miss your forced payment coming back in year five, you have 2x the base premium instead of where you were at when we wrote the policy at 10x. That's a concern for a lot of our clients. Yeah, it's just... it's just complicated too. It's like, if you have to get a calculator out to determine what, how flexible a carrier is, it's, it definitely doesn't get 10 out of 10 for simplicity. Yep. That's exactly right. So some other things to know and be aware of with this particular carrier is they actually do have a waiver premium rider that includes paid up additions. There's two other carriers that we work with that has this option. One of them is Guardian. The other one is Security Mutual and this New York Life waiver premium rider. It just has to be included when you underwrite the policy. extra cost above their normal premium because of course it's extra premium that's being covered. Geographically, I don't have to make the dad joke because Caleb did, but they can work in all 50 states, including New York. And this is just interesting. New York Life, since I've been watching them as a company the last three years, they've done three different just wild bonuses when it comes to their premium deposit fund. They call it a premium deposit account. We've mentioned the video a couple of times I did on that, but the example. The most recent bonus is they'll give you a 12% guaranteed return if you sign up with a PDF with them. That's nuts. Yeah. It's also kind of weird to you that they run promotions like a grocery store. It is kind of weird that the biggest insurance carrier does that because it almost incentivizes you to be like, well, let's just wait to see a promotion. And it's like it screams that, hey, we want more premium. for the end of the year. It's just interesting. That's what I'll say. I don't know how I feel about it, but obviously if you're going to go with a company and they have a promotion, great. But yeah, it's unique. Yeah, it's definitely, definitely unique. And I think it kind of comes back down to their target market, right? The career agents, most of them are financial advisors doing more than just life insurance. They're managing assets. So if you can reposition an asset earning 4% in a savings or in a CD or even annuity to something that's going to earn 12% for a year and then go to five and then also go into a tax-free vehicle life insurance, tax deferred. It can make sense. So I think it speaks to their target market. As long as they don't start sending me coupons like the grocery store, I think I'm going to be okay with them doing this though, because it can be a pretty wild opportunity for our clients. Now starting to land the plane here, guys, we're going to talk about the advantages and some of the considerations. Big advantages initially is they're one of the big four. Actually, number two, in the mutual insurance, life insurance space. Been around for a long time, 170 years of dividend performance, and they have a very high consumer rating. I found this just kind of interesting when I was doing my research. They're very well-respected and have, both from U.S. Suramount and Money Magazine, have listed them in the top, top consumer index ratings for how they service their clients, which I think is pretty great. They have diverse product offerings, so not just whole life, but also term and some other insurance and annuity solutions. as well as I would consider their career agency system a pro. Some would say it's a con. Personally, I think it's a pro because they do have a very strong training system. Some of the most sophisticated advisors I have met in the insurance space came up in New York Life's career agency system. They're very, very big on education. That's one of the benefits of being a career place is like you have a greater incentive of putting time and energy into training versus independent. You're like, hey, I could put all I could train you, but then you're just going to go sell the most competitive products. And so usually anytime you have a career agency system, usually the people that stick around have a pretty good foundation on that whole deal. And so, yeah, I would say probably if I just summarize this, they're a big company, they have competitive products, they've been around for a while. Those are the major pros when you're thinking about New York life. Now, as far as considerations are concerned, there's a couple of them. First, PUA flexibility, I don't love the step down and I don't love the catch up provision not being available for our clients. So that that for me is a big initial pause. Also, because they are so big and because we're independent, if you're working with an independent agent, you're kind of just a number. The benefits of working with smaller insurance carriers is that for some carriers, we can call the CEO. We've had them on our podcast before. We can develop these relationships. I don't think the CEO of New York Life is going to answer my phone call. Maybe Caleb's different. He's a master networker. So you can tell me that. Hey, if you're the CEO, if you're the CEO of New York Life, we want to come on the show. You're open invite. There you go. There you go. Now, the other consideration is just competitive edge. You're going to see this more when we start comparing illustrations across the insurance carriers, but also competitive from a flexibility standpoint. They don't have to be that competitive. I've said this a couple of times in this video. And because of that, I just think that's how their products are designed. Now, I've mentioned this as a pro. But it can also be a con because their career agency is captive. Not all career agencies are because it is a captive. It just means that in general, if you're working with a New York Life agent, they're not going to be shopping the market because they have a, let's say, a duty to place within New York Life first. At times they can go out of that, have to be specific to a health concern where they think you can get a competitive quote elsewhere or some other definable suitability reason to go to another carrier. Last thing, this is more on the agent side. If you want to work with them, you have to maintain a higher case average of $20,000 of premium or higher. Yeah, I would say PUA flexibility. Obviously, that's a big one. That's something that we've really introduced in the series that is maybe a bigger deal than a lot of people are talking about. And yeah, even in the career system, they're such a big carrier that you could be in a career agent and still feel. like a number, even though they're like the only company that you represent or the main company that you represent. And then, yeah, they're not, they're, they're not anti-infinite banking, but they're, they're definitely not like, yeah, we want, we, we endorse this. We want you to do lots of business here. And so that those are, those are some of the considerations. Well, because we've been adding it in, I want to put it in here, agent perspective. So I can only speak to the independent agent side of things. Obviously I'm not a career agent. If you are, and your competition's better, that's great. Let me know. And I'll be mad at you. But at the end of the day, the compensation with this carrier, I would say is below average on the independent side. The career agent comp could be great. You tell me. And just I won't be mad at you. I'll be happy for you. So you'll have mixed emotions here at Better Wealth. We believe in abundance here. Resources and support. Career agents, it's what it's designed for. They have a lot. It's below average for independent agents because independent agents are required to go through specific independent distribution arms or strategic alliances. Strategic alliances are... basically large brokerage conglomerates that work with many, many carriers. And so their knowledge base around that one carrier may not be as high as what you get inside. That just makes sense. The product complexity, I couldn't pick between six or seven. So I gave you a six and a half. But I think because of some of the PUA limitations, because some of the product limitations, how to calculate how much PUA, how to calculate your compensation, the numbers just they don't jive with industry. They're kind of their own ecosystem. So that's a little bit complex from an agent perspective. but their illustration software is pretty solid. All right, landing the plane here, what's the conclusion? What can we take away from this? So New York Life, we've said it over and over, massive, massive company, very financially sound, and their career agency system is among the best for training their agents. However, I have found that their products do not always compete in the general marketplace. Their P-Way flexibility is limited and due to the limited access, there's not a lot of independent agents that choose to work with this carrier. because you have to maintain production to keep your contract. So it's hard to know if New York Life is the best carrier for you if you're only working with a New York Life agent, because maybe that's all they're showing you. So keep an open mind, look around. And like my buddy Frank Lloyd Wright said, you got to look at the product and its design. Among top mutuals, if you got a whole life insurance product and its design well, you're probably in a good spot. So I had my joke at the beginning and you kept your joke at the end. Love that. I think you very much have a solid conclusion for New York Life. And this is a company that I'm grateful that we have access to. I think, again, we very much want to do the very best thing for the clients. An example of that is if someone's really interested in the PDF and, you know, premium deposit fund and the 12% bonus that they're running, that might tip the scale to say, hey, you know what? Because of that, I want to work with New York Life. And so there's every scenario is a little bit different. I'm really grateful that we are independent and that can show people. the pros and cons and grateful that we have access to New York Life, even though it's not one of our main carriers that we work with. And I will just say, if you have a New York Life policy that you want us to review, or if you're like, hey, I've been watching the series and I would love to talk with you guys either about New York Life or another carrier as it relates to how we can design this, maybe for your business, your family, your situation, we'll have links down below. We would love to connect and chat with you. If you're finding this series valuable, it takes a lot of work to put this information together, make these videos. And so liking, subscribing, commenting, even watching this video all the way to the end really helps tell YouTube that this is valuable. And then as a result, they'll continue to help our channel grow. So thank you. And if you want to continue to get notified for this series, and then the end video that we do comparing all the carriers together, make sure to hit that notification bell. Alden, wonderful job on this video and pumped for some of these next couple of videos that we're going to be making. Awesome. Well, guys, thanks for your time. Cale, this has been fun. I love this series. I get to see you more. This is a good thing.
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