Updated September 20th, 2018

Northwestern Mutual Whole Life Insurance Review

DISCLAIMER: We are not Northwestern Mutual. This is an independent review. 

Founded in 1857, Northwestern Mutual is one of the oldest financial security companies in the world. The company offers a variety of products and services, including its popular whole life insurance policies.

Northwestern Mutual is one of the large mutual insurance companies. It is ranked as #104 in the Fortune 500 list.  

The Good 

Industry Leader

When shopping for whole life insurance, peace of mind is extremely important. As a consumer, a focus on industry ratings can help you make an informed and confident decision. 

Great Ratings For Northwestern Mutual

Great Ratings For Northwestern Mutual

Financial Ratings

Northwestern Mutual is an industry leader in regards to its financial ratings. All the top rating agencies consider the company a top performer, including the following:

  • A.M. Best Rating: A++
  • Fitch Ratings: AAA
  • Standard & Poor’s Rating: AA+
  • Moody’s Rating: Aaa

To see all of their rating information go to:

https://www.northwesternmutual.com/about-us/what-we-believe/our-commitment-to-financial-strength

There are other companies that perform this well, but not many have higher ratings than Northwestern Mutual. 

Variety of Coverage Options 

It’s easier to find and buy whole life insurance when you have access to a variety of coverage options.

Here are some details to consider:

  • There is no whole life minimum age.
  • The whole life maximum age is 85.
  • The minimum whole life death benefit is $25,000.
  • There are guarantees on cash, death benefit and premium.
  • Dividend paying whole life insurance.

These benefits, compared with affordable premiums, has moved Northwestern Mutual whole life insurance policies to the top of the market. 

Full of Features 

One of the primary benefits of Northwestern Mutual whole life insurance is its standard policy features. You get the best of the best with your monthly premium, without being asked to pay any extra.

Some of these features include:

  • Cash value access and partial surrenders.
  • Interest rate guarantee.
  • Waivers on deductions and premium payments in emergency situations, such as an injury that leaves you out of work.
  • Expiration and lapse guarantees.
  • No-exam conversions.
  • Flexible death benefits.

It is these types of features that allow Northwestern Mutual whole life insurance policies to stand out in a crowded market. 

The Not So Good 

Historical Whole Life Insurance Dividend Rates Graphic V2

Historical Whole Life Insurance Dividend Rates Graphic V2

Low and Decreasing Dividend

Northwestern Mutual’s dividend has been decreasing over the past years. The dividend when from being the highest in the industry to being average. This dividend is what drives the performance of the whole life insurance cash and death benefit growth.

The dividend has decreased from 8.8% in 2000 to 5.45% for 2016 and all the way down to 4.8% in 2018.  

One of the main reasons to buy a whole life insurance is because of the participating dividend. If the performance of the dividend keeps decreasing, so is the performance of their whole life policy.

Stability Of Your Agent

In reality, Northwestern Mutual had 5,900 employees in 2016. But the employee count went down to a little over 5400 in 2018 (source Forbes 500).

What this means to you is that finding an agent that will stay longer with Northwestern Mutual may be more difficult in the future.

This is a product of the significant competition that Northwestern Mutual has faced, and that other companies keep growing past them. See the revenue from the large Mutual Companies (Fortune 500 Source): 

Northwestern Is Not The Top Dog In The Mutual Insurers Any More

Northwestern Is Not The Top Dog In The Mutual Insurers Any More

The Quotes

In the past Northwestern Mutual had one of the best performing whole life insurance in the market.

Today, Northwestern Mutual’s lower dividend will not help when comparing Northwestern Mutual whole life insurance with the competition.

The cash value and the death benefit will grow slower than some of the top 7 whole life insurances in the market place. 

Northwestern Mutual Financial Information 

In 2018, the company will pay an estimated $5.3 billion to policy-owners through its dividend payout. However, in 2017 the dividend was $5.6 billion.

As you can see the dividend payout keeps dropping so the outlook is not very bright. The direct competition is doing significantly better. 

Final Word 

In conclusion, Northwestern Mutual has long been one of the top providers of whole life insurance. With high ratings across the board and a record amount paid in dividends to policy-owners, the company seems to be in a strong position.

However, a rapidly decreasing dividend could be a concern for new whole life insurance products, and participating policies.

If you are looking for a new policy there are many better options out there like:

MassMutual, Ohio National, New York Life or Penn Mutual.

Top Whole Life’s – Northwestern Mutual Whole Life Insurance Review:

3 out of 5

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Join the discussion 2 Comments

  • Casey says:

    Hi,

    In doing my research it seems that the dividend scale interest rate is only one component of the dividend that is credited for these policies. It appears as if you only focused on that. What about favorable mortality costs and expenses? The dividend scale interest rate isn’t a rate of return correct? Please help explain because it seems you are missing important information in determining future performance. Thank you!

    Best,
    Casey

    • WholeLifeExpert says:

      Hi Casey, You are correct. There are many other factors that are not easy to infer, because companies do not disclose their expenses and mortality costs. We try to keep it simple. However, dividend is still the #1 driver of performance. If a company has a 30% drop in dividend their performance will suffer. Northwestern Mutual’s whole life was #1 many years ago. Now, it is not very competitive.

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