Northwestern Mutual life insurance review 2024
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BLUEPRINT
Updated 2:52 a.m. UTC March 7, 2024
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Pros
- Flexible death benefit and payment options for some policies.
- Customizable policies to meet individual needs.
- Strong financial strength.
- Will help find an alternative life insurance company if Northwestern Mutual products don’t meet your needs.
Cons
- You must speak with an agent to get most policy details and a life insurance quote.
- Historic investment performance is not as high as other insurers we evaluated.
- May have higher internal costs when compared to other insurers we evaluated.
- Fewer term life insurance coverage periods when compared to other insurers.
Why trust our life insurance experts
Our team of life insurance experts evaluates hundreds of insurance products and analyzes thousands of data points to help you find the best product for your situation. We use a data-driven methodology to determine each rating. Advertisers do not influence our editorial content. You can read more about our methodology below.
- 3,000+ whole life insurance policies evaluated.
- 13 million+ life insurance policy features analyzed.
- 5 levels of fact-checking.
About Northwestern Mutual life insurance
Northwestern Mutual was founded in 1857 in Milwaukee, Wisconsin, and has a long history of meeting its client obligations.
Today, Northwestern Mutual maintains the highest marks for financial strength from AM Best, Fitch, Moody’s and S&P. The insurance provider, which also offers investment accounts and financial planning, has 4.9 million clients, 97% of whom stay with the company from year to year.
Northwestern Mutual life insurance policies
Northwestern Mutual offers one of the best whole life insurance policies available, but you can also choose from term, universal and variable universal life insurance coverages.
Northwestern Mutual whole life insurance
When you get a whole life insurance through Northwestern Mutual, you lock your premium — it’ll never change — and you’ll have a guaranteed death benefit.
Payments are flexible (choose monthly or yearly), and policies build tax-deferred cash value over time. Customers with whole life insurance policies through Northwestern Mutual can also earn dividends — you can even pay your premium with the dividends you earn. In 2024, Northwestern Mutual expects to pay $7.3 billion in dividends.
Those dividends aren’t guaranteed, but Northwestern Mutual has a good track record. The provider has paid out dividends every year since 1872.
Northwestern Mutual term life insurance
Northwestern Mutual offers term life insurance policies for either 10 or 20 years or until you reach 80. Because it’s a term policy, it doesn’t earn cash value, but it still provides coverage to protect your loved ones for a set number of years — and at a lower cost.
While rates will vary, a healthy, 35-year-old male can get a $500,000 Term 80 life insurance policy for as low as $306 per year, though the premium increases annually. If your needs change over time, Northwestern Mutual lets you convert some or all of your coverage into a whole life insurance policy.
When you purchase term life insurance through Northwestern Mutual, you can choose from annual renewable and level premium policies.
Annual renewable
Annual renewable policies start at a lower rate, but premiums increase every year (reflecting the greater likelihood of a death benefit payout as you age). Choose from:
- Term 80 is term life insurance coverage that lasts until your 80th birthday.
- Term 10 only lasts 10 years. It’s the most affordable term life insurance coverage, but remember, premiums will get more expensive at the tail end of the policy.
Level premium
With level premium policies, your rate remains the same either for the duration or half of your term, depending on the product you choose.
- Level Term 20 lasts 20 years with unchanging premiums.
- Level Term 10 also lasts 20 years but the premiums increase in the back half of the policy, i.e., for the second 10-year period.
Northwestern Mutual universal life insurance
The keyword of Northwestern Mutual’s universal life insurance is flexibility. Over time, you can adjust the death benefit (amount and type) and premium (amount and payment schedule) to account for changing needs throughout your life.
Like its whole life insurance policy, Northwestern Mutual’s universal life coverage builds tax-deferred cash value. But unlike whole life, universal life is not eligible for dividends.
Northwestern Mutual currently offers two universal life insurance policies:
- Custom Universal Life offers a flexible death benefit and premium payment schedule with tax-deferred cash value.
- Survivorship Universal Life insures two people. The death benefit is only paid out upon the death of the second person.
Northwestern Mutual variable universal life insurance
Northwestern Mutual’s fourth major life insurance offering is its variable universal policy. The key difference between the standard universal policy and the variable universal policy is that the cash value in the latter is invested in the market.
Theoretically, the cash value could grow faster if the market does well. But if the market tanks, the opposite may be true. Greater risk, but potentially a greater reward.
For those who pay attention to the market and are well-versed investors, variable universal life could be a smart decision. Northwestern Mutual lets policyholders choose from 40 investment funds, managed by actual investment firms, so you have more control over how your money grows.
Northwestern Mutual mitigates investment risk with automatic rebalancing and a dollar cost-averaging approach to investing. You can also move some of your cash value funds out of the market over time to reduce your risk, the same way you might get more conservative with your 401(k) or IRA funds as you near retirement.
With a Northwestern Mutual variable universal life insurance plan, you can choose a guaranteed death benefit period, during which your death benefit is guaranteed, regardless of market performance.
Northwestern Mutual life insurance riders
Adding riders to your policy can give you additional coverage and benefits, but it will increase your monthly premium. Northwestern Mutual offers four riders:
- Waiver of premium benefit (whole life only): If you become disabled and are unable to work, Northwestern Mutual will pay your monthly premium for you.
- Waiver of selected premium amount (universal life only): This rider is the same as the waiver of premium benefit, but it’s solely for universal life policies.
- Additional purchase benefit: By selecting this rider, you’re enabling yourself to purchase additional life insurance down the road, without having to prove insurability.
- Long-term care benefit riders: You can access portions of your death benefit while still alive to cover the cost of long-term care for an eligible condition if you meet the requirements.
Rider availability may vary.
Northwestern Mutual life insurance reviews
Northwestern Mutual has earned the highest financial strength ratings from AM Best, Fitch, Moody’s and S&P, highlighting the provider’s ability to pay out all its claims. The insurer also has a very low level of customer complaints compared to the average life insurance company, according to data from the National Association of Insurance Commissioners (NAIC).
Still, choosing life insurance is a major financial decision. Read multiple Northwestern Mutual life insurance reviews online, and talk to friends, family and neighbors with a Northwestern policy to get their feedback. Get quotes from a few of the best life insurance companies before making a final decision.
Methodology
To determine the best whole life insurance companies, our life insurance experts evaluated data provided by Veralytic, an independent publisher of life insurance research and analytics.
Each life insurance company included in our evaluation had the opportunity to earn up to 100 points, based on the following factors.
Cost competitiveness of cash value policies: 35 points. We looked at internal policy costs, such as administrative fees and policy charges, to determine the competitiveness of permanent life insurance policies.
Historical performance: 25 points. Our analysis took into account the historical performance of the life insurance company’s investments to determine how an insurance company’s performance and therefore cash growth potential compared to its competitors.
Reliability of policy illustrations: 20 points. We evaluated the accuracy of each life insurance company’s policy illustration, a document that shows projected cash value growth, to determine which companies provide the most reliable outlooks.
Financial strength: 10 points. There are four major rating agencies — AM Best, Fitch, Moody’s and Standard and Poor’s — that evaluate an insurer’s financial strength, a factor that indicates an insurer’s ability to pay out a claim years from now. We took this into consideration to account for the likelihood an insurance company is able to meet claim obligations.
Cash value: 10 points. Cash value policies grow at different rates, and we factored the liquidity of a cash value policy into our analysis. Some policies have a cash value that grows faster in the early years. Others have slower cash value growth in the early years, and policyholders must wait a significant period of time before having access to a sizable cash value. Whole life insurance policies with cash value that grows faster in the early years received more points.
Northwestern Mutual life insurance review FAQs
You can research Northwestern Mutual life insurance policy options online, but to get a quote and sign up for a policy, you’ll have to work with an advisor. The website has a search functionality to find advisors in your location.
You can borrow money from your life insurance policy at Northwestern Mutual if you have a permanent life insurance policy: whole, universal or variable universal. These policies build cash value over time that you can access while you’re alive.
Borrowing money from a cash value life insurance policy isn’t free. The cash value acts as collateral for a loan from Northwestern Mutual, and you’ll accrue interest like you would any other loan. If you die before repaying the loan, your beneficiary’s death benefit will be reduced by the balance owed. If you go too long without making payments toward the loan, the added interest could take your loan balance above the actual cash value you’ve accumulated, and your policy could be terminated.
Northwestern Mutual is one of the best whole life insurance providers we analyzed.
Northwestern Mutual earns top marks for financial strength and has highly reliable policy illustrations. The whole life insurance policy itself is noteworthy because of the locked-in (and generally affordable) premium and annual dividends. While not guaranteed, Northwestern’s paid these dividends every year since 1872.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
