1. How do I take out a loan on my policy?
Loan Value is the amount of cash value that can be borrowed on a policy. A policyowner may be able to make a loan against the cash value of the policy, based on the type of policy owned. A loan allows access to the cash value of the policy, while still maintaining the insurance coverage. When a loan is made against a policy, the
death benefit is generally reduced by the amount of the loan plus any interest that is owed. Loan interest rates vary and specific provisions are generally explained in the policy itself.
Generally, a policyowner can request a loan by calling a Service Center. However, in certain instances, a loan form or written request signed by the policyowner will be required. Please remember a policy loan accrues interest and will reduce the death benefit. A loan form or written request signed by the policyowner must be sent to a Service Center if:
The policyowner requests that the loan check be sent to a temporary address.
There is a change of address pending when the loan is requested.
The policy is company owned. Signatures of two officers and their titles will be required for corporations and the sole proprietor's signature will be required for sole proprietorships.
The proceeds of the loan are being transferred to a bank.
The policy has multiple owners.
The policy is owned by a trust.
The policy is assigned.
2. How do I report a death?
Upon the death of an insured, a Service Center, General Office, or Sales Office must be contacted and advised of the name of the insured, the date and cause of death, and the name, address, and telephone number of the person who should be contacted. A claimant's statement and additional information on how to file a death claim is then sent to the appropriate person.
You can report a death via e–mail or for more information please visit our Beneficiary Resource Center.
3. Who is a Beneficiary?
This is the person or other party designated to receive life insurance or annuity proceeds upon the death of the insured. The beneficiary is named when a policy is taken out and can be changed at the request of the policyowner.
A contingent beneficiary is the party designated to receive life insurance policy proceeds if the primary beneficiary should die before the person whose life is insured.
In order to change the beneficiary of a policy, the current policyowner must fill out a form with the necessary information and return it to the Service Center.
4. What is Income Tax Withholding?
Since the enactment of the Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA), New York Life has been required to withhold Federal and sometimes State (depending on the state of record of the policyowner) income taxes from certain taxable distributions. Generally, payees are permitted to elect not to have income taxes withheld from designated distributions.
5. What is Taxable Gain?
Under the tax law, certain distributions from life insurance policies result in taxable income to the policyowner. If a distribution is taxable, the amount the policyowner is taxed on is limited to the "gain" in the policy, which generally equals the policy's cash surrender value less the premiums paid. The following distributions and other transactions may result in taxable income to the policyowner: partial withdrawals, policy surrenders and lapses, and certain dividends. In addition, loans from policies that have been classified "modified endowment contracts" may result in taxable income to the policyowner.
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