Northwestern Mutual has been around for over 162 years. They’ve persevered through depressions, recessions, and two World Wars. In 2017 Fortune named it one of the most Admired Companies in the Insurance: Life and Health category.
As a mutual insurance company, Northwestern answers to its customers. Customers get a share of the profits the company earns through dividends. Northwestern Mutual paid 4.8 billion dollars to policy holders in 2018.
- Life Insurance Products Offered: 70/100
- Financial Strength 100/100
- Customer Satisfaction 100/100
- Consumer Complaints 100/100
- Digital Experience 30/100
Pros
- Northwestern Mutual offers great customer service
- They expect to pay over 6 billion dollars in dividends in 2020
- Very few customer complaints
- You can convert term insurance to a whole life policy without a medical exam
Cons
- You can’t get an online quote: Northwestern Mutual prefers that you work with an agent
- Information on the website is difficult to find or not available
- You can’t make a claim online, only by phone
- Policy offerings are a bit limited
Life Insurance Products Offered by Northwestern Mutual
Northwestern Mutual offers three types of life insurance:
- Term life
- Whole life
- Universal life
Term life insurance is the most affordable. Term insurance offers coverage for a specific period of time—the term. Once the term ends, so does your coverage.
Northwestern Mutual offers four terms: Term 10, Term 80 (coverage until age 80), Level Term 10 and Level Term 20. In the level term insurance, your premium stays the same through the life of the policy. In Term 10, you get annually renewable coverage for ten years. After that, you renew the policy for another ten years, but with a higher premium. In Term 80, you get insurance through your eightieth year, but it’s an annually renewable policy, so your premiums may go up every year.
Northwestern Mutual allows policy holders to pay premiums that start off lower (when you’re younger and don’t have as much money) and increase over time, when your earning potential increases.
The variety of term life insurance Northwestern offers is a bit limiting. If you want a policy with premiums that stay the same every year, Level Term 20 is your only choice. They don’t even offer a 30-year term.
CompLife Insurance allows people with term life insurance to convert it to a whole life insurance policy. Not all companies do this, so this is a nice option. The earlier you convert to a whole life policy, the more cash value the policy accumulates. You don’t have to have a medical exam to convert a policy, although you will pay more in premiums. Learn more about How Much Whole Life Insurance Cost?
Whole life insurance covers you for your entire life. It is a popular type of permanent life insurance. You’ll pay premiums for a certain period of time, but you’ll be covered until you die. A whole life insurance policy from Northwestern Mutual accumulates cash value as the dividends are reinvested. Northwestern mutual expects to pay six billion dollars in dividends in 2020.
>>MORE: Whole Life Insurance Explained
Some people like whole life insurance because it builds cash value that they can use to supplement their retirement income or help their kids pay for college.
Universal life insurance is another type of permanent life insurance and similar to whole life insurance in that you build cash value which you can then borrow against. However, with universal life insurance, you have more options. You can use the accumulated cash value to pay the premiums. You can reduce the amount you pay and pay the rest from the cash value account. You can adjust the amount of coverage you want. However, if you run out of cash value, the policy may lapse.
>>MORE: What is Permanent Life Insurance?
Northwestern Mutual offers two types of universal life insurance:
- Custom Universal Life (CUL)
- Single Premium
In general, there are three types of universal life insurance: guaranteed; indexed; and variable. You can learn more in-depth these universal life insurance types:
- The Pros and Cons of Indexed Universal Life Insurance
- What is Guaranteed Universal Life Insurance?
- The Pros and Cons of Variable Universal Life Insurance
Custom Universal Life gives you the most flexibility. It allows you to choose your death benefit and the premium you pay, as well as the ability to build cash value. It appears to be a variable universal life insurance product.
Single premium universal life allows you to pay a single premium to purchase a permanent life insurance policy. Whether you received an inheritance, won the lottery or got a bonus at work, you can apply this money to purchasing life insurance to leave your heirs with an income tax-free lump sum payment. Thanks to dividends and interest, the amount of the policy should be more than the amount you paid. This appears to be a guaranteed universal life insurance product.
Northwestern Mutual also offers Disability income insurance, long term care insurance, and other financial products.
Financial Strength Rating of Northwestern Mutual
A.M. Best gives Northwestern Mutual the highest rating, A++ (Superior). What does this mean for you? You want your insurance company to be financially strong so you can be confident in their ability to pay out claims.
Customer Satisfaction Ratings of Northwestern Mutual
Life insurance lags behind other financial services in customer satisfaction, behind retail banking, auto insurance and full service investing services. However, Northwestern Mutual ranks at the top, according to J.D. Power. Here are their scores:
- Overall satisfaction: 5 out of 5
- Product offerings: 5 out of 5
- Product offerings: 5 out of 5
- Price: 5 out of 5
- Statements: 4 out of 5
- Interaction: 4 out of 5
- Communication: 5 out of 5
- Application and Orientation: 4 out of 5
Overall, they got 810 out of 1000 points, higher than any other life insurance company.
Consumer Complaints Rating of Northwestern Mutual
According to NAIC, (National Association of Insurance Commissioners) overall Northwestern Mutual Insurance company received seven complaints in 2018.
The NAIC also gives a company complaint index. The average score is 1.0. A company that receives a score of 1.0 has an average number of complaints. Northwestern Mutual got a complaint index of 0.3, meaning there were almost no complaints at all. This is very impressive. It’s one of the lowest scores of any insurance company.
Digital Experience Rating of Northwestern Mutual
Northwestern Mutual does not have an online quote process. If you want a quote, you’ll have to call and talk to an agent. This may lead to higher premiums because of commissions.
You can’t make a claim online, either. You have to make a claim by phone. They only thing you can do online is calculate how much life insurance you need.
There is an app for Northwestern Mutual customers. It allows you make payments, see the details of your policies, and enroll in autopay.
Last Thoughts
If you value customer service and like working with an agent, Northwestern Mutual may be a good choice for you. They have very few customer complaints. They anticipate paying 6 billion dollars in dividends this year, which you can use to pay premiums or take in cash.
However, if you prefer interact with your insurance company online, Northwestern Mutual doesn’t offer a lot of online tools. It all depends on what you value in your insurance company.