Northwestern Mutual holds the distinction of being the highest-rated life insurance company in the United States, thanks to its financial strength and status as one of the top mutual insurance companies. However, while it may be a top choice for many, it may not be the right fit for everyone.
That’s why we’re delving deeper into the company’s history and providing a brief overview of some of its most popular products. By doing so, we hope to give you a better understanding of whether Northwestern Mutual is the right company for your needs.
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About Northwestern Mutual
Founded in 1857, Northwestern Mutual is a Milwaukee-based company that has maintained its primary headquarters in Wisconsin since its inception.
Initially named the Mutual Life Insurance Company of the State of Wisconsin, the company rebranded as Northwestern Mutual Life Insurance Company (later shortened to just “Northwestern Mutual”) within ten years and expanded its marketing efforts throughout much of the Midwest.
Today, Northwestern Mutual is renowned for issuing life insurance policies across the United States and is widely recognized as one of the best life insurance companies in the industry. In its most recent reports, Northwestern Mutual disclosed assets of over $290 billion and annual revenue just shy of $30 billion, both of which place the company comfortably on the Fortune 500 list. Source.
As a financially robust mutual insurance company, Northwestern Mutual is able to provide annual dividends to policyholders. In 2019, the company paid out $6 billion in dividends to its policyholders. While dividend payments are not guaranteed, Northwestern Mutual has an impressive track record of paying dividends every year for nearly 150 years.
However, Northwestern Mutual differs from some of its competitors in a few ways. Firstly, prospective insureds cannot apply for coverage online; instead, they must work through a financial advisor or insurance agent. Additionally, Northwestern Mutual does not offer “no exam life insurance” policies, so applicants must undergo a medical exam to purchase a policy.
It’s also worth noting that Northwestern Mutual only markets its policies through captive agents, meaning that agents who sell Northwestern policies cannot market coverage from competitors. While this approach may be considered a disadvantage by some, the company is known for offering competitive premium rates and generally receives high marks from its 4.5 million clients.
Although Northwestern Mutual may be less internet-oriented than some of its competitors, existing clients can manage most aspects of their policies through the company’s website. While the company may have bucked a few recent industry trends, its strong financial position and reputation as one of the best life insurance companies in the industry make it an attractive option for many.
Northwestern Mutual Group Financial Ratings
A.M. Best: A+
S&P Global: AA+
While most large, well-known life insurance companies can be considered financially secure, Northwestern Mutual stands out as one of the most financially stable companies in the industry. In fact, the company receives top ratings from all major rating services, which is a remarkable achievement.
Northwestern Mutual, along with its sister company Northwestern Long Term Care, accounts for one-third of the six life insurers that have received a perfect “100” rating from Comdex, a well-respected rating agency in the insurance industry.
Furthermore, Northwestern Mutual is known for its excellent customer satisfaction ratings and has been ranked first by both J.D. Power and U.S. News in recent industry rankings. This demonstrates the company’s commitment to providing high-quality service and meeting its contractual obligations to its policyholders.
Further, the National Association of Insurance Commissioners (NAIC) reports that Northwestern Mutual receives substantially fewer consumer complaints than comparable insurers.
Products Offered by Northwestern Mutual:
- Term Life Insurance
- Whole Life Insurance
- Universal Life Insurance
- Disability Insurance
- Long Term Care Insurance
- Retirement Planning
- 529 College Savings Plans
Life Insurance Policies Offered by Northwestern Mutual
Term Life Insurance:
Northwestern Mutual has one basic term life policy, with a variety of options for structuring premiums. New insureds between ages 18 and 70 can purchase term coverage from Northwestern, and the minimum coverage level is $100,000.
Northwestern’s term premium varieties are Level Term 10, Level Term 20, Term 10, and Term 80.
The level term policies have fixed premiums throughout a policy’s ten or twenty-year term. Term 10 provides ten years of coverage, and Term 80 covers an insured until he or she reaches age 80.
With both Term 10 and Term 80, premiums start off lower and gradually increase each year throughout the policy’s duration as long as coverage remains effective. Not every premium option is available for every age group.
Though Northwestern’s term policies generally don’t renew upon conclusion of the initial term, the policies do include a conversion option that lets policyholders switch term coverage to a permanent policy (whole life or universal life) without any additional underwriting requirements.
Whole Life Plus:
New insureds up to age 85 can purchase whole life insurance coverage from Northwestern Mutual, with coverage amounts starting at $50,000.
Like most whole life policies, Northwestern Mutual’s offering features level premiums, lifetime coverage, and interest-accruing cash value that grows tax-deferred.
Northwestern lets whole life purchasers choose how long they will continue paying premiums.
The available options are 15, 20, or 25 years, or through the insured’s 65th or 100th birthday.
When a shorter period is selected, individual premiums payments will be higher. But when the period concludes, a policy is “paid-up” so that coverage stays in place, but no additional premiums are owed.
Northwestern also offers life insurance strategies combining whole life and term intended for policyholders who want permanent coverage with dividend eligibility and need higher coverage for a finite period.
Final Expense: Northwestern Mutual does not currently offer any guaranteed-acceptance or simplified-issue policies marketed as final expense or funeral insurance.
Northwestern Mutual’s basic universal life policies is known as Custom Universal Life. The policy looks like a normal cash-value oriented UL policy, with coverage and premium flexibility (subject to minimums and maximums) and opportunities for decent returns.
New insureds can be anywhere from 18 to 85 years old and need to purchase at least $500,000 in coverage. Policy growth is based on the overall performance of the company’s portfolio, subject to minimum rates of return.
What makes the policy “custom” is that new policyholders get to choose how long they want to pay premiums.
Shorter premium periods require higher individual payments but result in a policy that is “paid-up” earlier. The higher early payments can also expand a policy’s potential for cash-value growth.
Accumulator and Protector versions of Northwestern’s UL offering place different emphases on cash-value growth versus death benefit.
Northwestern Mutual also offers a single-premium UL and survivorship UL policies that are intended more as an estate-planning tool than as a means of replacing income.
When purchasing the single-premium policy, policyholders pay one big lump-sum premium upfront and then don’t owe anything further. Coverage levels start at $50,000, and new insureds can be up to 75 years old.
Available Life Insurance Riders
Terminal Illness Rider: This rider gives the policyholder the right to accelerate a portion of the policy’s death benefit if the insured is diagnosed with a terminal illness.
Waiver of Premium (Disability): If the insured becomes totally disabled before reaching age 65, and the disability lasts for at least 6 months, no premiums are owed while the insured remains disabled.
Additional Purchase Option: Available with whole life, this rider gives the policyholder the right to purchase increased coverage at specific times in the future, with not additional underwriting required.
Inflation Adjustment Rider: The policy’s death benefit is adjusted in accordance with the Consumer Price Index if death occurs during a certain period.
Northwestern Mutual’s strong financial position, excellent customer satisfaction ratings, and comprehensive range of life insurance policies make it an attractive option for many individuals looking for life insurance coverage. However, choosing a life insurance company is a highly personal decision that should take into account your specific needs, budget, and preferences.
While Northwestern Mutual may be the right choice for some, it’s important to shop around and compare policies from other reputable insurance companies to ensure you’re getting the best coverage and rates possible. By doing so, you can make an informed decision that aligns with your individual needs and financial goals. Ultimately, taking the time to research and compare policies from multiple providers can give you the peace of mind that comes with knowing you’ve made the best choice for you and your loved ones.