Northwestern Mutual calls itself the “Quiet Company” because it doesn’t consider itself a household name even though it is one of America’s largest life insurance companies.
Northwestern Mutual has been around for over a century and has long held a place as one of the U.S.’s largest insurance companies. In 2015, it had more than $1.5 trillion worth of life insurance in force.
The firm tries to use a financial planning perspective in its packages, even though it is primarily a life insurer. This type of approach includes the insurance coverage aspect of the business and various investment services that help people grow their wealth during their lifetime. These services range from long-term care and estate preparation to investment services and college savings planning.
Here is a closer look at the types of services that Northwestern Mutual offers.
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Term Life Insurance
Northwestern Mutual offers two types of term life insurance policies. These policies payout if you die during the term. Coverage ends at the end of the term, and you need to renew it to keep your coverage active.
The two options are the level premium term life insurance and the annually renewable premium policy. Level premium policies are further divided into Level Term 10 and Level Term 20 policies. Level Term 20 is the same as the typical 20-year term policy. Premiums remain the same over 20 years, and coverage ends when the term ends.
The Level Term 10 policy offers 20 years of coverage, but after the first 10 years, a new premium gets set. This new premium will not change for the last 10 years of coverage.
Northwestern Mutual’s Annually Renewable Term Policies
The annually renewable policies are available in Term 80 and Term 10 options. The Term 80 coverage renews annually until the age of 80, while you can renew the Term 10 annually for up to 10 years.
Northwestern Mutual allows its customers to convert between these two options without undergoing additional medical exams or going through additional underwriting. This factor is important because it allows you to continue getting coverage at reasonable terms if you develop a health condition after buying your initial policy.
The term life rates at Northwestern Mutual aren’t among the cheapest, but they are competitive with other insurance providers.
Universal Life Insurance
Universal life insurance is a form of life insurance that adds payments and interest above the current premium to the cash value of the policy. You can use this cash value to cover premium payments.
Northwestern Mutual has two types of universal life insurance policies: the single premium policy and the custom universal policy.
The single premium policy lets you pay the entire policy premium at once. The custom policy enables you to adjust the payment and death benefit as you go. Coverage starts at $50,000, and Northwestern Mutual does not disclose its upper limits for this type of policy. The cash value will grow at a fixed rate, which means you can use the policy as collateral and borrow against it if you want.
Whole Life Insurance
Whole life insurance, as the name suggests, covers you for your entire lifetime. At Northwestern Mutual, you can purchase whole life insurance before you reach 85 years of age. The minimum death benefit you can get is $25,000, and there is no ceiling.
The whole life insurance policy at Northwestern Mutual includes a cash value component that grows at a fixed rate. That cash value can be used as collateral to borrow money from Northwestern Mutual in the form of a policy loan.
Northwestern Mutual has two age-related policies: 65 Life and 90 Life. These involve paying premiums until you reach the given age. For both of these policies, the coverage will remain the same throughout your life, and the coverage remains after you complete the payment requirements.
Other Northwestern Mutual options require payments for a set number of years. These are available for 10, 15, 20, 25, and 30 years, after which the coverage remains active.
Ins and Outs of Northwestern Mutual’s Whole Life Insurance
What is the catch to whole life policies? The shorter the period in which you make payments, the higher the monthly premiums you pay. You need to take this into account when choosing the payment terms.
However, in some cases, you can also receive your death benefit while still alive if you fall ill. You may also choose whether your beneficiaries receive the death benefit in one payment or smaller monthly payments.
Northwestern Mutual also has something called Variable CompLife, which is a cross between a term life policy and a whole life policy. You can choose how much base coverage you would like to have in the form of a term policy and how much you would like to get as a whole life policy. The whole life component of CompLife builds value, while the term life component offers shorter-term life coverage.
There are three CompLife options: adjustable, estate, and survivorship. Adjustable has a period of guaranteed level premiums, while estate and survivorship allow you to pay lower premiums over a more extended period. The focus of the estate option is on building and preserving wealth for beneficiaries, while survivorship policies focus on providing support for surviving heirs.
Disability insurance replaces some of your income if you have a debilitating injury or develop a disability that limits your ability to earn a living. Alternatively, it helps cover the cost of household services if you’re a stay-at-home parent who acquires a disability. A short-term policy covers temporary injuries and illnesses, while long-term disability insurance kicks in after short-term coverage ends (usually after 90 days)
Northwestern Mutual also offers disability insurance coverage specifically for doctors and other medical professionals. These policies focus on coverage for the specific risks medical professionals face in their field.
- Northwestern Mutual offers retirement planning services that include life insurance decisions and advice about retirement accounts, annuities, and savings plans.
- You can also get advice about investments and financial planning as they relate to long-term wealth building.
- Northwestern Mutual advisors can help clients choose a college savings plan for their children. Options include 529 savings plans and Educational Savings Accounts.
- Private client services are for individuals who want to invest $1 million or more. These services include access to specialized portfolios.
- Estate planning services involve helping you set up your estate to pass your money, possessions, and property to your family after your death.
- Long-term care planning focuses on the practical aspects of paying for in-house care or moving to an assisted living facility.
- Northwestern Mutual can also advise about business as it relates to growth, risk management, insurance, and your future financial plans.
Pros of Northwestern Mutual
Northwestern Mutual is a great option if its services meet your life insurance needs. Here is a look at some of its specific advantages.
- There is plenty of variety. Northwestern Mutual has a product for different terms, budgets, and life situations. You can find coverage regardless of your age or financial plans.
- You can combine policies. The CompLife options allow you to merge both term insurance and life insurance to get the best of both worlds.
- You can receive dividends. Dividends, while a great benefit, isn’t offered by every insurance company out there. You can use them to build up the value of your policy, cash out, or pay your premiums.
Cons of Northwestern Mutual
You also need to consider the potential drawbacks when deciding if Northwestern Mutual is the right option for you.
- There are no online application options. While the norm for many insurance companies today is to move toward online applications, Northwestern Mutual hasn’t caught up yet. You have to initiate the process through your financial advisor, which may be less-than-convenient for some people.
- Agents are not permanent. Your agent could leave the company, so you may not be able to build a long-term relationship.
- There are few budget options. If you are looking for a cheaper policy, Northwestern Mutual is not the best option because its focus is on building wealth and offering comprehensive coverage.
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