Northwestern Mutual Life Insurance – Company Review

Although life insurance is a critical step to protect your loved ones when you’re no longer there, it’s also a critical strategy to implement when planning for retirement. With tax and spend legislators growing the country’s national debt, adding a tax-exempt income stream to your planning strategy is essential.

 

Easy Article Navigation

 

 

There are many companies in the marketplace that offer insurance products that are a good fit for retirement planning, and among these companies, Northwestern Mutual Life Insurance is one of the best.

 

About Northwestern Mutual Life Insurance Company

Founded in the mid-1800s, Northwestern Mutual has established itself as one of America’s leading insurers with a 96% annual renewal rate, paying out more than $4.5 billion in claims in 2018. In fact, in 1859 a train accident resulted in the company having to pay out $1,500 more than they had on hand in claims. They made good on their promise to pay because the company’s president and trustees took out personal loans to pay the claim.

Northwestern Mutual is a multi-billion-dollar insurance company, but they don’t sell their policies directly to the public. Instead, they rely on representatives to market and sell their products to potential customers. Northwestern Mutual offers various life insurance plans that feature the ability to grow cash value over time.

The company demonstrates superior financial stability and has earned the highest ratings possible from each of the national rating services:

Rating ServiceRating Awarded
A.M. BestA++ (Superior)
Moody'sAaa
S&P GlobalAA+
FitchAAA
J.D. PowerNo. 3 (807 out of 1,000 points)

The importance of national rating scores should not be understated since life insurance is simply a promise to pay a benefit in exchange for a premium. Using life insurance for estate or retirement planning means that the insurance company must be financially stable enough to deliver on its promise decades after the purchase.

 

Why Choose a Mutual Insurance Company?

When using whole life insurance or universal life insurance for retirement and estate planning, it’s essential that you choose a mutual insurer. Since mutual insurance companies are owned by policyholders rather than stockholders, each policyholder has the opportunity to share in the company’s profits.

Northwestern has a rather long very positive record of paying dividends to its qualifying policyholders and the company estimates that it will distribute over $6 billion in dividends in 2022. This will be the company’s highest dividend payout in its history of the company.

These dividend payments allow policyholders to accumulate considerable wealth over time and build the asset needed to provide tax-exempt retirement income, the money needed for estate protection and settlement, and the death benefit purchased to protect surviving loved ones.

 

Northwestern Mutual Life Insurance Products

When it comes to life insurance products, Northwestern is one of the few companies that believe more is better. While most companies have pruned their product portfolio, Northwestern continues to offer ten life insurance products so that all prospective customers can purchase the life insurance product that will fit their circumstances, future needs, and budget.

Northwestern offers its life insurance portfolio to residents of all the U.S. and Washington D.C., the U.S. Virgin Islands, American Samoa, Puerto Rico, Guam, and the Northern Mariana Islands.

Life Insurance ProductDescription
65 LifeParticipating whole life insurance with level premiums to age 65.
90 LIfeA participating whole life insurance policy that is paid in full at age 90 and coverage remains in force for the insured’s lifetime
Limited Pay LifeAllows the policyholder to select a payment plan from 10 to 30 years for paid-up coverage
CompLifeBlended term and whole life insurance allow the insured to own life insurance for short-term and long-term needs.
Custom Universal Life AccumulatorThis is a traditional universal life policy that earns tax-deferred interest based on the company’s investment performance.
Custom Variable Universal LifeA universal life policy that allows the policyholder to choose how their cash value is invested.
Executive Variable Universal LifeA perfect life insurance solution for business owners and managers who want to assure business continuation by providing key person coverage.
Term Life InsuranceNorthwestern offers traditional term insurance with policy periods. The Term 80 policy is an annual term policy up to age 80.

Northwestern Mutual is also known for its Annuity products, Disability insurance, and long-term care insurance.

 

Pros and Cons for Northwestern Mutual

Pros:

  • Northwestern offers an extensive product portfolio to meet the various needs of prospective clients.
  • Unlike other mutual insurers, Northwestern is willing to pay dividends on a term, whole life, and universal life insurance.
  • One of the highest-rated insurers in the U.S. and beyond.
  • Term policies contain a conversion option to its universal life product
  • Very positive dividend payment history
  • A substantial offer of optional riders

Cons:

  • All products must be sold via an approved agent or financial professional.
  • Most applicants will be required to undergo a medical exam for underwriting purposes.
  • Information on Northwestern’s website is limited compared to competitors’ websites.

 

 

Frequently Asked Questions about Northwestern Mutual

What is the disadvantage of whole life insurance?

The primary disadvantage of whole life insurance is that the rates are considerably higher than term life insurance (temporary coverage and no cash value) and universal life insurance.

What is the average rate of return on a whole life insurance policy?

Answer: Although the rate of return on whole life insurance ranges from 1.5% to 3% when you purchase a policy from a mutual company like Northwestern Mutual, the annual dividends can increase the overall rate of return dramatically.

How long does it take for whole life insurance to build cash value?

The time it takes for your whole life policy to build substantial cash value will always depend on the periodic payment plan you select (10-pay, 20-pay, pay to 65, lifetime pay) and the dividends you will earn if you purchase a policy from a mutual insurance company.

Can you cash out of a whole life policy?

Policyholders can access the cash value in their policy via policy loans, cash withdrawals, or policy partial or full surrender. If the money you take out is less than or equal to the premiums you’ve paid, the money will be exempt from personal income taxes.

What happens when a whole life policy is paid up?

Answer: Once your policy is paid up, no future premiums are required and the policy remains in force and earns interest on the cash value for the rest of your life.

Request Free Personal Quote Comparison

Curt GibbsWith each client, Structured Wealth Strategies will develop a retirement income financial plan that maximizes assets, minimizes taxes, and guarantees the most inflation-adjusted income possible utilizing the fewest amount of assets.

Structured Wealth Strategies is an association of independent business, legal, and financial professionals dedicated to helping people understand the challenges and opportunities that finances have on their lives.

Each associate at Structured Wealth Strategies has extensive experience in their respective profession and has used the concepts, methods, and solutions they promote to resolve financial challenges in their own lives. They focus on helping people build and protect their money using “Specialized” financial instruments, concepts, and methods.

My name is Curt Gibbs and I invite you to contact our office to discuss your financial situation. (800) 595-1130

Let's Talk About Your Wealth and Protection Strategies