Northwestern Mutual is an industry icon with high marks for financial strength and customer retention; considered a ‘lower cost’ competitor, it is particularly competitive for seniors.
If your research tells you permanent life insurance makes sense for you, then you want a company that is financially strong, has a long history of paying dividends, has few complaints, and sells and underwrites its own highly customizable insurance life plans. Northwestern Mutual is one of those companies. It offers whole life and universal life policies. As a mutual company, it is owned by its policyholders, some of whom are eligible to share in annual dividends when the company does well. Its A++ rating with A.M. Best tells you the company will be around when it comes time to pay out benefits to your beneficiaries. In addition to all its other strengths, Northwestern Mutual is said to offer permanent life insurance rates that are particularly competitive for seniors.
Cost Monthly premium | Varies based on age and other factors |
Ease of enrollment Ways you can enroll | Online form, phone or through a local office |
Coverage What types of insurance? | Whole and universal policies |
Waiting period How soon is the policy in effect? | As soon as the policy is approved, and premium is paid |
Customer support Ease of access | Advisors are available Mon-Fri 7:00 AM-6:00 PM CST or online portal |
Maximum coverage What is the maximum coverage available? | Not stated |
Exclusions What isn’t covered? | Suicide exclusion not specified |
Financial strength A.M. Best’s Financial Strength Rate (FSR) | A++ |
Medical exam required Is a medical exam required? | Yes |
As permanent life insurance is something you tend to keep for the rest of your life, how the company deals with you up front is an important indicator of what you can expect as you age. The company’s website is not too friendly or complete. However, Northwestern Mutual has received very low volumes of complaints over the years, which bodes well. While much of the interaction can take place through your personal portal on the company website once you are a customer, you also have access to the company over the phone and through one of its 300 offices nationwide. Some people like meeting face-to-face.
Whenever you buy life insurance, your rates will be set by your risk class which, in turn, is set by a company’s underwriting guidelines. Northwestern Mutual’s guidelines are not particularly flexible so its other benefits would have to override the possibly higher cost. However, as your health declines, if you have held the company’s permanent insurance policy long enough to have accumulated cash value, you may be glad to have that cash available to you as a withdrawal or policy loan to cover any expenses (medical or other) you are facing. Accessing these funds does not require having to prove critical illness, disability or terminal illness. Any withdrawal or unpaid loan will, however, be deducted from the value eventually paid to your beneficiaries.
Pros:
Cons:
Bottom Line:
If at age 55+, permanent insurance makes sense to you, Northwestern Mutual is a stable company with strong financials and very positive customer satisfaction ratings. It offers whole life and universal life policies, including a Single Premium Universal Life policy that allows you to pay a lump sum and have your insurance fully in place. It is a mutual company, owned by its policyholders, which has paid dividends for almost 150 years. Fortune magazine named Northwestern Mutual as one of the “World’s Most Admired Companies” in the insurance industry in early 2018. According to a 2017 Fitch Ratings report, compared with other mutual company insurers, Northwestern Mutual is considered a ‘lower cost’ competitor, particularly in the case of seniors. This is presumably possible because it invests well and manages costs effectively.
Frequently Asked Questions:
Does your whole life coverage include some kind of ‘accelerated death benefit?’ Northwestern Mutual does not advertise a traditional form of accelerated death benefit. Instead, it says that if “paid-up additions have been purchased with dividends during the life of your policy, you may be able to surrender them tax-free to pay for long-term care (LTC) insurance premiums by utilizing a 1035 exchange.” Other options also exist for paying LTC premiums with your cash value.
When does my coverage begin? If you prepaid for your policy with your application and you accept the company’s offer of coverage, your coverage will start right away. If not, your coverage will typically begin after your first payment.
What one thing sets this insurer apart from others? If, in addition to financial strength and good customer service, dividends are significant to you, Northwestern Mutual has paid dividends for nearly 150 years straight. In 2018, they expect to pay out $5.3 billion to policy owners, 85 percent of which will go to those holding traditional permanent life insurance.
More Information:
Overview: Northwestern Mutual offers permanent life insurance policies in the form of traditional whole life and universal life policies. They can build cash value, which a policyholder may withdraw or borrow as a loan if needed. The tax implications of withdrawals under different circumstances should be reviewed carefully. Final death benefits will be reduced by the value of total withdrawals or unpaid loans and interest. Many policies also allow policyholders to participate in Northwestern Mutual’s financial successes through annual dividends, which are declared at the discretion of its Board of Directors. While dividends are not guaranteed, they have been paid for nearly 150 years.
Package Details:
Whole Life: With a whole life policy from Northwestern Mutual, you will be covered throughout life, provided premiums are paid as required. Premiums will never go up, and the death benefit is guaranteed to your beneficiaries when you die. The cash value you build in the account over time grows tax-deferred, never going down unless you withdraw funds or take out loans against the cash value to use during your life.
Universal Life: Northwestern Mutual’s universal life policies allow you to build cash value, much as whole life policies do. However, they offer flexibility in premium payments and schedules which you can adjust to your budget and life requirements. The company offers two kinds of universal life insurance:
Optional Accessories or Add-on Services: Northwestern Mutual’s information on available add-ons, or riders, is unusually sparse. However, from third-party sources, it appears that in addition to the traditional benefits such as Waiver of Premium after disability, it also offers a Term rider which lets you add some term insurance to your permanent policy and a Paid Up Additions rider which applies dividends to increase the cash value of your policy.
Contract Details: View individual policies for details.
Warranty: N/A
Accreditations: Northwestern Mutual is not accredited by the Better Business Bureau. However, it holds an A+ rating on the BBB’s website. Fortune ranked it tops for ‘Quality of Products and Services’ and ‘Financial Soundness’ in 2017. It carries A.M. Best’s highest rating of A++ for financial strength and has a perfect Comdex ranking of 100 out of 100 (average rating from the four major rating agencies). In 2017, it ranked 97th in the Fortune 500, a highly recognized measure of financial success.
Company Details: Northwestern Mutual was founded as a financial services organization in Milwaukee, WI, in 1857 under the name of Mutual Life Insurance Company of the State of Wisconsin. It has been issuing life insurance policies for over 150 years and is an icon in the insurance industry. In fact, it was one of the top insurers that did not need to accept bailout money during the 2008-2009 financial crisis.
Today it ranks at the top in financial strength and covers some 4.4 million people. As its CEO says, “In short, our financial strength gives us the freedom to do the right thing. That means fulfilling our mission as a mutual company and putting you, our policyowners, first.” Policies are issued nationwide by The Northwestern Mutual Life Insurance Company, Milwaukee, WI (NM). Securities are offered through Northwestern Mutual Investment Services, LLC, (NMIS) a subsidiary of NM, broker-dealer, registered investment adviser, member FINRA and SIPC.
Northwestern Mutual
720 East Wisconsin Avenue
Milwaukee, WI 53202One State Farm Plaza
Bloomington, IL 61710
Phone: 800-782-8332
Website: https://www.northwesternmutual.com
