Northwestern Mutual

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.

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8
Grand Score
8
User Score
8
Grand Score
8
User Score
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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.

Grandfolk Scoring
Cost 10/10
Ease of enrollment 9/10
Coverage 7/10
Waiting period 8/10
Customer support 7/10
Maximum coverage 10/10
Exclusions 8/10
Financial strength 10/10
Medical exam required 9/10
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
Age Score:
9
50-64 Years
9
65-74 Years
8
75-84 Years
7
85-Above

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. 

Health Score:
7
Great Health
6
Good Health
5
Fair Health
7
Poor Health

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:

  • Northwestern Mutual drew a significantly lower number of complaints to state regulators in 2015 than the median number for a company of its size, according to NAIC (National Association of Insurance Commissioners).
  • It ranked #5 in customer satisfaction among the 24 largest U.S. life insurers, according to the 2017 J.D. Power Life Insurance Study.
  • If meeting face-to-face about your insurance is essential, Northwestern Mutual has more than 300 offices across the United States.
  • More than $5.3 billion in total dividends are expected to be paid to policy owners in 2018. 
  • Northwestern Mutual has paid dividends each year since 1872, through depressions, recessions and world wars, which reflects its dedication to its policyholders.
  • Dividend amounts can be taken in cash, used to pay back a policy loan or to purchase additional insurance (known as paid-up additions) that increases the death benefit and cash value of the policy.

Cons:

  • The company’s website is not particularly forthcoming on specific policy details. Factors will vary by location, so you are forced to speak to a Northwestern Mutual financial advisor to get decision-level information.
  • The company’s agents are captive agents – selling solely Northwestern Mutual policies – so they have limited options to propose.
  • Northwestern Mutual does not offer any simplified issue policies for those with severe pre-existing conditions. Nor does it offer a Guaranteed Universal Life (GUL) policy, which is a hybrid term/universal product that is attracting the attention of seniors.
  • The few customer complaints include some regarding agents pushing permanent life insurance on consumers seeking term insurance, likely for the higher commissions generated.

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:

Product Details 

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:

  • Custom Universal Life (CUL) Accumulator: This policy provides excellent flexibility in terms of the death benefit and premium payment schedule you select. You can build your cash value, tax-deferred. Also, the policy can be tailored to meet various insurance objectives and to match your protection to your needs. 
  • Single Premium Universal Life:With this policy, you can make a single, lump-sum payment for your permanent life insurance policy, at which point you will have a fully funded policy in place for your beneficiaries without having any further payments to make. Your beneficiaries will receive an income tax-free payment as a death benefit.  

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.  

Additional Company Details

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. 

Contact: 

Northwestern Mutual

720 East Wisconsin Avenue

Milwaukee, WI 53202One State Farm Plaza
Bloomington, IL 61710

Phone: 800-782-8332

Website: https://www.northwesternmutual.com

Sharon O'Day - Senior Advisor

Sharon O’Day fixes financial lives. She is a tell-it-like-it-is money expert with a successful career in global finance, plus an MBA from the Wharton School. Today she specializes in getting entrepreneurial women over 50 back on their game so they can have more money, less stress and more joy. With her “Over Fifty and Financially Free” strategies, they take actions that lead to their ultimate goal: financial peace of mind.