Dividend Interest Rate Comparisons

Transcription

1 Dividend Interest Rate s Prepared by Individual Life Product Development and Support The Life Insurance Company of America () New York, NY December

2 Notes on Dividend Interest Rates & Histories The Dividend Interest Rate (or DIR) is just one component of a three factor dividend formula that for all mutual carriers includes: Mortality: to the extent mortality experience is better than guaranteed expectations, the dividend will be positively impacted Expenses: expense results are reviewed annually and compared to pricing expectations to determine the amount of expense loading assumed in the dividend Dividend Interest Rate: to the extent the investment experience of the company is better than the guaranteed interest rate assumed in pricing (generally 4%), the excess interest earnings are included 2

3 Notes on Dividend Interest Rates & Histories Dividends are not guaranteed and are declared annually subject to Board approval for all mutual carriers s Board of Directors has approved a dividend in every year since 1868 The DIR alone will not always indicate which policy will perform better Compare policy cash value and death benefit internal rate of returns for a better indication of policies relative performance s whole life policies are among the most competitive based on carriers dividend scales MassMutual has two separate dividend scales. One is for policies issued prior to March 1996 and another for policies issued since March The slides that follow illustrate the DIR histories for policies issued prior to March Source: Information contained on all slides obtained from Full Disclosure and other company publications. 3

4 Historic 30 Year DIR 30 Year Dividend Interest Rate History Northwestern MassMutual* New York Life 30 Year Average: 8.98% Northwestern 8.69% MassMutual* 9.10% New York Life 8.67% *MassMutual s dividend history applies to policies issued prior to March,

5 vs. NML Historic 30 Year DIR 1 30 Year Dividend Interest Rate History Northwestern 30 Year Average: 8.98% Northwestern 8.69% 5

6 vs. MassMutual Historic 30 Year DIR 30Year Dividend Interest Rate History MassMutual 30 Year Average: 8.98% MassMutual* 9.10% *MassMutual s dividend history applies to policies issued prior to March,

7 vs. NYL Historic 30 Year DIR 30 Year Dividend Interest Rate History New York Life 30 Year Average: 8.98% New York Life 8.67% 7

8 Historic 25 Year DIR 25 Year Dividend Interest Rate History Northwestern MassMutual* New York Life 25 Year Average: 8.42% Northwestern 8.28% MassMutual* 8.52% New York Life 7.96% *MassMutual s dividend history applies to policies issued prior to March,

9 vs. NML Historic 25 Year DIR 25 Year Dividend Interest Rate History Northwestern 25 Year Average: 8.42% Northwestern 8.28% 9

10 vs. MassMutual Historic 25 Year DIR 25 Year Dividend Interest Rate History MassMutual 25 Year Average: 8.42% MassMutual* 8.52% *MassMutual s dividend history applies to policies issued prior to March,

11 vs. NYL Historic 25 Year DIR 25 Year Dividend Interest Rate History New York Life 25 Year Average: 8.42% New York Life 7.96% 11

12 vs. Penn Mutual Historic 20 Year DIR 20 Year Dividend Interest Rate History Penn Mutual 20 Year Average: 7.76% Penn Mutual 7.20% 12

13 Questions Please call Life Product Services Option