A Guide to Life Insurance in New York (NY)

When looking to get some New York Life Insurance Quotes that really suit your particular circumstances, it is important to consider both the nature of life insurance in general, but also how life insurance in New York specifically operates and facts that you should know to help you reach a considered judgement.

In this article I am going to explore the subject in depth from both the point of view of a New Yorker, and also more widely as to how life insurance as an industry impacts on the economy of New York.

First I am going to start off by taking a look at some background information about New York in order to frame the discussion.

(If you would like to get a New York Life Insurance Quote right now, then simply put your zip-code in the box above, click 'Start!', and then click on the specially chosen New York Life Insurance Companies to get a Free Quote).

 

New York State – A Little Background…

New York is a middling state in terms of physical size (27th in the US), but a monster when it comes to both population and economics. According to the 2010 US Census there are 19,378,102 people living in New York, and it is one of only three states in the US to have a trillion dollar plus GDP ($1.114 trillion in 2010), the others being Texas ($1.153 trillion) and California ($1.936 trillion).

In fact, if New York was a country it would have the 14th biggest economy in the world in 2010, just behind Australia ($1.219 trillion), and just ahead of Mexico ($1.004 trillion) according to the International Monetary Fund.

It is home to the most populated city in the United States, New York City, which was home to 8,391,881 people in the city in 2009, but had an estimated metropolitan population of some 19,378,102 million people spread through NY/NJ/PA.

New York City is known for so many different things that it is hard to pick some out for particular favor, but highlights might include the Statue of Liberty, a gift from France that was dedicated in 1896, Ellis Island where most immigrants into the United States would disembark until well into the 20th century, Broadway, the Empire State Building, Central Park and numerous world-class museums.

The capital of New York State is Albany, which is 150 miles of New York City and had an estimated population of 93,539 in 2008, though an estimated 857,592 people live in the metropolitan area.

New York is a big exporter, with an estimated $71.1 billion worth of exports (a number that is actually larger than the TOTAL GDP of 13 of the states in 2010!) with Canada being the most important trading partner for New York.

It would be easy to think of New York only in terms of New York City and sprawling metropolitan areas, but the reality is that this belies the enormous amounts of greenery in the state.

New York is home to the largest state park in the United States, Adirondack Park, which covers an enormous area of 9,400 square meters, which is actually larger than the size of Israel (8,522 square meters) or Fiji (7,055 square meters), and is home to 400 black bears.

It is actually quite interesting to look at a population map of New York State, because it is quite striking how densely populated areas are very much in the minority, and how the majority of the state has less than 50 - 100 people per square mile. 

New York State Population Map

But as you can see from the map above, where there are people there tend to be a lot of them! And an estimated 92% of New Yorkers live in an urban area.

Economically the financial district of New York, big agricultural outputs (such as dairy, cabbages and cattle), tourism, publishing and wine production are all big money earners for New York.
 

New York Life Insurance – The Facts…

As you might expect from a state that is home to such an enormously important financial sector and the New York Stock Exchange, Insurance is a massive business in New York.

The State is home to 177 New York Life Insurance Companies who are licensed to sell life insurance in New York, a massive 88 of whom are domiciled in the state, which is significantly more even than California, which only has 18 domiciled companies, and second only to Texas which has 127, according to the American Council of Life Insurers.

The Life Insurance companies in New York employ 56,000 people directly, and a further 70,000 people are employed in non-insurance jobs that are supported by the industry.

It is easy to see why this is the case when you consider that several of the biggest Life Insurance Companies in the United States are headquartered in New York City, including:


MetLife (Metropolitan Life Insurance Company)
– MetLife is the largest Life Insurer in the United States with more than $3.3 trillion of life insurance in force, net assets of $730.906 billion and net revenue in 2010 of $52.717 billion.

The New York Life Insurance Company (NYLIC) - New York Life is the largest mutual Life Insurance company in the United States (in other words it is owned by its policyholders, rather than by shareholders) and had net assets of $287 billion under management and net revenue of $34.014 billion in 2009.

Teachers Insurance and Annuity Association – College Retirement Equities Fund - TIAA-CREF – Is ranked as 86th on the Fortune 500 list, and had total assets of $402 billion in 2010 and revenue of $27.53 billion in 2008.

The Guardian Life Insurance Company of America – The Guardian Life Insurance Company of America (GLICOA) is the fourth largest mutual insurance company in the United States.


New York combines a large population with a high than average household income of $54,659 in 2009, $4,438 higher than the national average of $50,221. And New York has a higher than average amount of life cover per policyholder compared to the other states.

New Yorkers have purchased 8 million individual New York Life Insurance Policies, and each policyholder has an average of $160,000 worth of cover.

Also, not surprisingly, New York Group Life Insurance is very important, and there is an estimated $650 billion worth of group life insurance cover in New York.

The amounts of life cover purchased every year are huge. In 2009 for example there was $140 billion worth of individual life insurance cover purchased in New York, which was more than Wyoming ($3 billion), Arkansas ($10 billion), Georgia ($60 billion), Kentucky ($20 billion), Delaware ($7 billion), Idaho ( $9 billion) and Arizona ($30 billion) combined!

And the amounts paid out to New York residents in the form of surrender values, policy dividends, matured endowments and other payments by the Life Insurance companies is equally as impressive with $30 billion paid out in 2009, and a further $6 billion worth of annuity benefits paid out in the same year. Which to get into perspective, consider that $36 billion is higher than the YEARLY GDP of both Vermont and North Dakota!

And the numbers get even more vast when you look at the total investments that New York Life Insurance companies make in the State, with $275 billion invested in bonds and stocks, $21 billion in property, and various other investments bringing the total up to $330 billion that is invested in the state of New York by Life Insurance Companies.

 

New York Life Insurance – The Six Step Process to Getting A Great Life Insurance Policy In New York!



1/ Things To Consider BEFORE You Buy…


There are a number of different factors that you have to bear in mind before getting any life insurance, and these should include:

  • How much can you afford to spend?

  • What are your current financial circumstances?

  • Can your foresee any particular future circumstances which may demand that you have a higher level of life insurance? (One example of this might be if your wife had just become pregnant).

  • Do you have any dependants?

  • What is your current family size and do you expect it to become larger in the future?

  • Do you have any elderly relatives who currently need medical attention or long term care, or sick children that need medical attention that would suffer if you didn’t have adequate cover that could pay for their on-going treatment?



2/ Take Advantage of the ‘Free Look’ Provisions That You Have In New York


In New York, it is a legal requirement that all life insurance sold has to have a minimum ‘Free Look’ period of 10 days, and a maximum of 30 days.

What this means in practice is that even if you have already purchased New York Life Insurance, that you have a minimum of 10 days after receiving your policy documents to cancel the policy without penalty.

Many life insurers in New York offer right up to the 30 day period, so you can shop online, or through an Insurance Agent for a New York Life Insurance Quote, take out the policy, and then if after thoroughly reading through the policy document decide it’s not for you, you can still get all of your money back (assuming you do it within the Free Look period) without financial penalty.

It is of course a good idea to check the details of any policy BEFORE you buy it though, regardless of the law, as this will undoubtedly save you the hassle of having to research the subject for a second time.

In any case, it is a good idea to regularly review your life insurance cover every few years to make sure that your current policy is competitive, and that you are getting the best possible deal.



3/ What Standard Of Living Do You Want For Your Dependants?


This question really is the crux of the matter when it comes to life insurance in New York or anywhere else. You already know how much money you are spending out every month (or if you don’t then it would be a good idea to work it out).  And the amount of life insurance that you end up choosing to buy is also an extension of that.

Naturally, your ability to pay will also influence how much life insurance you end up buying; but it is a worthwhile endeavour to reflect on the use that your descendants would put the money too, and try to end up with a realistic amount of life insurance that will enable them to live comfortably.



4/ Dig Down In To The Details…


When you start to think about the uses that your family might put any life insurance monies too, it also will help if you split it up according to specific activities, and how imminently the money might be needed.

Pressing Needs

So, for example, there will be pressing needs that have to be met such as bills, mortgage expenses, estate taxes, funeral expenses and any medical expenses you might accumulate if you had died after a long illness.

Starting Again and Living Needs

This might include working out the mortgage costs for the next few years, or how much it might cost to pay off the mortgage on any property entirely. It may include the costs of moving home to live nearer to family, or having to change jobs as the result of the bereavement.

Fulfilling Goals

Then there may also be a category devoted to bigger goals like paying for your children’s college education, or funding a charitable enterprise. These may have been important to you in life, and with enough life insurance they can remain in focus to be achieved even if you die.


5/ Consider the Type Of Life Insurance That Would Best Serve Your Needs


The next step is to consider the type of Life Insurance that you should buy.

New York Term Life Insurance – The big advantage of term life insurance is cost. It is almost always cheaper than the alternatives, because there is no savings element, and the term is fixed for a certain amount of time. What this means in practice is that it is easier for Life Insurance Companies in New York to work out at what premium levels they will remain profitable, because lifestyle, death data and life expectancy can all be factored in quite easily. The advantage from a consumer perspective lies in the simplicity of term life insurance. You pay a certain amount every month, and during the term of that policy you know that a certain amount will be paid out in the event of your death. Very straightforward.

New York Permanent Life Insurance – The big advantage of permanent life insurance (also called whole life insurance, ordinary life insurance or variable life insurance) is that it covers you for your whole life, not just a fixed term, and it also tends to have a savings element attached to it, so at some stage in the future you could potentially get some money back without having to die first! It is however more expensive than term life insurance and a little more complicated to understand.


6/ Get A Variety Of New York Life Insurance Quotes From Different Companies And See What Is On Offer


Once you have a clear idea of what you want the life insurance for, how much you need, how much you can afford and the type of life policy that you want; then it is time to get a selection of New York Life Insurance Quotes and compare what is available from the different companies.

We have compiled a selection of the best ones on this site to help with that. Simply scroll up to the top of this page, enter your zip code, click ‘Start!’ and click on the list of recommended New York Life Insurance Companies to get some Free Quotes right now.
 

New York Life Insurance – The Details…

In terms of the regulatory and legal framework that surrounds life insurance in New York, you have to turn to The State Insurance Code of New York for guidance.

You can find the New York Insurance Code here: (I have shortened the url with bit.ly because otherwise it is a crazy long link)

http://bit.ly/epaKLy

This information is quite dense and by its nature high on jargon and details. But it is nevertheless the basis on which insurance is regulated in New York, and so it is useful to know what the rules are which are being applied.

 

New York Life Insurance Resources

New York State Insurance Department

It is the New York Insurance Department that is responsible for overseeing that the above New York Insurance Laws are implemented, that consumers are protected and that life insurance companies in New York are properly regulated.

Their website is quite basic in terms of design, but much of the information is very sound.

http://www.dfs.ny.gov/insurance/dfs_insurance.htm

 

Life Insurance Company Guaranty Corporation of New York

In the event of a New York Life Insurance Company becoming insolvent, then the Life Insurance Company Guaranty Corporation of New York would step in to provide certain levels of financial protection to policyholders in New York.

http://www.nylifega.org/



 

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