The Milwaukee, Wisconsin-based company Northwestern Mutual provides a wide range of services to customers all throughout the country, including life insurance, long-term care insurance, and disability insurance.
The company was founded in 1857. When an ox ran into a passenger train two years later, killing two people, the company paid out its first life insurance claims. Since the company’s demands exceeded its assets, the president and trustees took out loans to cover the shortfall. In this case, the policyholders’ families were compensated in full, and the rest is, well, history. Ownership of the business is held by policyholders, who receive dividends from the firm on a yearly basis. The dividend payment schedule spans over 150 years.
Reasons Why
Excellent customer satisfaction: Customer service is second to none at Northwestern Mutual, which ranks third in our evaluation of 91 life insurance providers based on the quantity of complaints received from policyholders.
Policies eligible for dividends: Payout-eligible Insurance Policies Northwestern Mutual has paid dividends to policyholders for almost 150 years, including term policyholders. In 2023, the corporation is expected to pay out a record-breaking dividend of $6.8 billion.
No medical exam coverage available: The underwriting process for life insurance typically involves a paramedical check. For certain policies, Northwestern Mutual offers an accelerated underwriting procedure that does not require a medical exam. In some cases, a life insurance policy that requires a medical exam may be less expensive than a no-exam policy, so it’s important to shop around and compare prices.
Top-tier financial stability: AM Best gave an A++ rating to only 10 out of the 91 life insurance providers we looked at. One of them is Northwestern. A life insurance provider’s ability to pay out claims is directly proportional to its financial health.
Cons
Can’t buy without an agent: Unlike many other life insurance companies, Northwestern Mutual does not allow customers to obtain term coverage online without first speaking to an agent. To purchase insurance, you must make contact with one.
Online capabilities are lacking: Northwestern Mutual’s website is lacking in terms of policy information and online quote availability. You’ll need to contact a representative for both.
Complaint Index
Consider the number of customer complaints a life insurance provider has received as an indicator of customer satisfaction. According to the National Association of Insurance Commissioners (NAIC), Northwestern Mutual had the third-fewest complaints out of the 91 life insurance companies we looked at.
The National Association of Insurance Commissioners (NAIC) keeps track of customer grievances and compiles them into an annual complaint index. The complaint index is a quick method to see how the company stacks up against other life insurance providers in terms of customer complaints. To receive the average amount of complaints for a company of its size, the complaint index must be 1.0. A score below 1.0 indicates that the company received less complaints than anticipated, while a score above 1.0 indicates that it received more than anticipated. The number of customer complaints at Northwestern Mutual is extremely low. The company has a complaint index of less than 0.04 on average for the next three years, 2020–2022.
Third-Party Ratings
Two additional independent ranking systems also give Northwestern Mutual high marks. We consulted AM Best to learn about a company’s fiscal health and J.D. Power to learn about customer satisfaction levels.
AM Best is a credit rating firm that assigns letters of excellence (A++) to “D” for the financial stability of life insurance providers. Northwestern Mutual has an A++ financial strength rating, which implies it is extremely well-equipped to meet its ongoing insurance commitments. Of the 91 companies we looked at, only eight got an A+ from us.
Customers of the major American life insurance companies are surveyed by J.D. Power. J.D. Power scored Northwestern Mutual as #4 out of 22 businesses in their 2022 U.S. Individual Life Insurance Study. The score that Northwestern Mutual received was far higher than normal.
Competition
Key variables such as financial stability, customer support, and coverage options are useful in comparing life insurance providers. We’ve included below a comparison of Northwestern Mutual to two of its main rivals.
| Items | Northwestern Mutual | New York Life | MassMutual |
|---|---|---|---|
| Types of Coverage | Term, whole, universal, variable universal | Term, whole, universal, variable universal | Term, whole, universal, variable universal |
| Dividends for 2023 | $6.8 billion | $2.0 billion | 1.9 billion |
| Online Application | No | No | Yes |
| AM Best Rating | A++ | A++ | A++ |
| Price for Term Policies | Information not available | Information not available | Better than average |
| NAIC Complaint Index (averaged over 2020 – 2022) | 0.036 | 0.18 | 0.05 |
| J.D. Power Ranking 2022 | 4 out of 22 | 10 out of 22 | 9 out of 22 |
Policies Available
Term Life Insurance
The premium for term life insurance often remains unchanged from year to year and covers a specified period of time (typically from one to thirty years). After the initial level premium period ends, coverage may be renewed at a higher rate. Unlike with several other types of insurance, the premium on some term policies will increase every time you renew your policy.
Term life insurance policies are typically less expensive than other forms of protection that are meant to last a lifetime, such as universal or whole life insurance.
Both annual renewable and level premium term life insurance policies are available from Northwestern Mutual.
- Level Term 10: Coverage is guaranteed for up to 20 years with Level Term 10. For the first decade, your premium will remain unchanged. The premiums will rise if you decide to extend your coverage by another decade.
- Level Term 20: A level premium is charged over the course of a 20-year policy’s “Level Term 20” term.
- Term 10: The premiums for this policy will go increased every year that you renew it for up to a total of 10 years.
- Term 80: With Term 80, you can keep renewing your coverage until you are 80, but your rates will go up every year.
Northwestern Mutual offers the option to convert a portion of or your entire term insurance to a whole life policy without undergoing medical underwriting.
Whole Life Insurance
Whole life insurance, as opposed to term, offers permanent coverage. It includes a cash value account that builds up over time and can be used for withdrawal or borrowing if you so want. As we’ll see below, universal life insurance (which we also examine) may be less expensive than whole life insurance. If you pay your premiums on time, you’ll always be covered.
Get in touch with a broker or agent if you’re curious about whole life insurance but need further information.
Universal Life
Similarly to whole life insurance, universal life (UL) policies are permanent but offer greater customization options. You may be able to change the amount of the death benefit as well as the premium payment schedule. However, the policy could lapse if you withdraw too much of the cash value. In addition, the cash value of a universal life policy grows based on current interest rates, so it’s possible that you’ll need to pay more premiums later on to prevent the policy from lapsing.
Single premium and survivorship UL insurance are available from Northwestern Mutual as well.
Variable Universal Life Insurance
Permanent life insurance with an investment component is known as variable universal life (VUL) insurance. Because the cash value is invested in the stock market, this type of life insurance has the highest risk. The premiums for this sort of insurance are also often higher. That is to say, if the investments behind the policy lose value or don’t perform well enough, you may need to pay more to keep the coverage in effect.
Available Riders
Adding a rider to your life insurance policy might expand its protections. There are riders that let you to obtain a portion of the death benefit before your death; these are termed living benefits or accelerated benefit riders. Following are examples of riders offered by Northwestern Mutual. Most come at an additional cost and must be chosen at the time the policy is taken out.
- Additional Purchase Benefit: Guaranteed insurability is provided by the Additional Purchase Benefit, which allows you to expand your coverage at a later date without submitting a new application or providing evidence of continued insurability.
- Waiver of premium: If you become disabled, the company will waive your premiums for as long as you’re disabled.
- Early payment benefit: In the case of a terminal illness (when death is projected within six months), policyholders of whole life and some term policies may be able to request to receive a portion of the death benefit early.
- Accelerated death benefit: In the event that the insured is diagnosed with a condition that will require long-term care, the insurance company may pay out a portion of the death benefit while the insured is still alive.
Customer Service
Monday through Friday, 7 a.m. to 6 p.m. Central Time, you can reach customer care at Northwestern Mutual by dialing (866) 950-4644. The company does not have a live chat feature or a contact form for potential new consumers.
Judgment Reached
Northwestern Mutual is, without a doubt, an exceptional business. Northwestern Mutual has a good J.D. Power rating and a very low complaint volume. It is highly likely to withstand future financial storms just as well as it has in the past because to its A+ credit rating and lengthy corporate history.
However, in comparison to its competitors, Northwestern Mutual’s online offerings, including as quotations, applications, and policy-specific information, fall short. Northwestern Mutual pays out large dividends, and most dividend-eligible plans from any insurer cannot be acquired online anyhow, so it may be worth your time to call and apply for a policy if you are interested in dividends.
FAQs
Methodology
We ranked over 90 insurers across five broad categories including financial soundness, customer happiness, product and feature variety, the overall buying experience, and cost, using a methodology we developed based on consumer objectives and life insurance firm fundamentals.
We used 55 different indicators and collected over 5,000 data points to accomplish this. We analyzed insurers’ performance across a wide range of metrics by grouping them into categories and scoring them based on a weighted scale.
