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Northwestern Mutual is the country’s largest life insurance company, capturing more than 9.83% of the entire U.S. market for life insurance. The company has very satisfied customers, receives extremely few complaints, and has superior financial stability, garnering an A++ rating from AM Best. It’s also one of the oldest life insurance companies around and has been paying dividends to its policyholders for an impressive 150 years.
However, the company falls short when it comes to online offerings, such as online quotes and an online application process.
- Pros & Cons
- Company Overview
Excellent customer satisfaction
Top-tier financial stability
Policies eligible for dividends
No-medical-exam coverage available
Can’t buy without an agent
Online capabilities are lacking
Northwestern Mutual is headquartered in Milwaukee, Wisconsin, and offers a variety of products nationwide, including life insurance, long-term care insurance, and disability insurance.
Founded in 1857, the company paid its first life insurance claims two years later. Two people died in an ox-versus-passenger-train collision, and the claims due were more than the company had available. So the president and trustees borrowed money to make up the difference. The ox-maligned families were made whole, and the rest, as they say, is history.
The company is owned by its policyholders, who participate in profits via dividends. Dividends have been paid every year for the last 150 years.
- Year Founded 1857
- Kinds of Policies Term, whole, universal, variable universal
- Payment Options ACH transfer, check
- Customer Service (866) 950-4644, Northwestern Mutual app - Apple / Google
- Official Website www.northwesternmutual.com
- Excellent customer satisfaction: Northwestern Mutual comes in third in a nationwide study of customer satisfaction and received the third-fewest number of consumer complaints (based on size) of the 91 life insurance companies we reviewed.
- Policies eligible for dividends: Northwestern Mutual rewards its policyholders, even its term policyholders, with dividend payments, and has done so for the past 150 years. The dividend for 2022 is projected to be the company’s largest yet at $6.5 billion.
- No-medical-exam coverage available: Typically, when you get life insurance, you have to undergo a paramedical examination as part of the underwriting process. But Northwestern Mutual makes up to $1 million of coverage available without a medical exam. Just be sure to compare quotes for no-med-exam life insurance to quotes for life insurance with a medical exam—the latter policy type can be more affordable in some circumstances.
- Top-tier financial stability: Fewer than 10% of the 91 life insurance companies we reviewed received an A++ for financial strength from AM Best. Northwestern is among them. Financial strength correlates directly with how likely a company is to be able to pay its life insurance claims.
- Can’t buy without an agent: Many life insurers provide the option to purchase term coverage online without an agent, but Northwestern Mutual does not. You’ll need to connect with one to buy any type of coverage.
- Online capabilities are lacking: Northwestern Mutual doesn’t offer online quotes or provide much in the way of policy information on its website. For either, you’ll have to reach out to an agent.
To get an idea of how happy a life insurance company’s customers are, consider how many customer complaints the company receives. Of the 91 life insurance companies we reviewed, Northwestern Mutual received the third-fewest number of complaints, according to the National Association of Insurance Commissioners (NAIC).
The NAIC records consumer complaints against insurance companies and uses that data to develop a complaint index. The complaint index is a way to quickly read how many complaints the company received and to compare it to other life insurance companies. If a company’s complaint index is 1.0, it received the expected number of complaints based on its size. Less than 1.0 means the company received fewer complaints than expected; greater than 1.0, means it got more than expected.
Northwestern Mutual’s complaint index is exceptionally low. Averaged over three years, the company’s complaint index is 0.03.
Northwestern Mutual also measures up well in two other rating systems from third-party organizations. We looked to AM Best for insight into a company’s financial strength and to J.D. Power to see how companies fared with customers.
AM Best is a credit rating agency that evaluates the financial strength of life insurance companies and ranks them on a scale of A++ to D. Northwestern Mutual is rated A++, which indicates a superior ability to honor its ongoing insurance obligations, including paying its claims. Only eight other companies of the 91 we reviewed received an A++ rating.
J.D. Power measures the experience of customers of the largest life insurance carriers in the U.S., and Northwestern Mutual ranked third in its 2021 U.S. Individual Life Insurance Study. The company scored 807 out of a possible 1,000 points.
It’s helpful to compare life insurance companies based on key factors like financial strength, customer satisfaction, and policy types available. Below we’ve compared Northwestern Mutual to two of its largest competitors.
|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 2022||$6.5 billion||$1.9 billion||1.85 billion|
|AM Best Rating||A++||A++||A++|
|Price for Term Policies||Information not available||Information not available||Better than average|
|NAIC Complaint Index (averaged over 3 years)||0.03||0.279||0.133|
|J.D. Power Ranking||3||9||7|
Our ratings take into account NAIC complaint index scores and AM Best ratings. The NAIC complaint index indicates how many complaints a company receives relative to its size. AM Best assesses a company's ability to pay its claims on a graded scale, with A++ being the highest. All our best life insurance companies have at least an A rating.
Term Life Insurance
Term life insurance lasts for a certain number of years, usually up to 30, during which you often pay a level premium (meaning it stays the same year after year). If you want to continue coverage after the level premium period, you may be able to renew it at a higher rate. Some term policies don’t have a level premium period and the premium increases each year you renew coverage.
Since term policies aren’t designed to be permanent, they tend to be more affordable than permanent coverage like universal or whole life insurance.
Northwestern Mutual offers both level premium term and annually renewable term life insurance policies.
- Level Term 10: Provides coverage for up to 20 years. The premium is level for the first 10 years. If you choose to continue coverage for another 10 years, the premiums will increase.
- Level Term 20: Premiums are level and coverage lasts for 20 years.
- Term 10: This coverage lasts for up to 10 years, premiums increase each year you renew.
- Term 80: With this policy, you can continue to renew coverage until you’re 80 years old, but premiums will increase annually.
You can convert some or all of your term policy with Northwestern Mutual into a whole life policy without going through medical underwriting.
Whole Life Insurance
Unlike term, whole life insurance provides lifelong protection. It incorporates a cash value account that grows as the policy ages, and you may be able to withdraw or borrow from the account if desired. Whole life insurance is more expensive than term and may also be more expensive than universal life insurance, which we discuss below. As long as premiums are paid, the coverage is guaranteed.
Northwestern Mutual’s whole life policies are available to applicants up to age 85. The minimum coverage amount on its single-life policy is $50,000. The company also offers a survivorship whole-life policy with minimum coverage of $250,000.
Universal life (UL) insurance is also permanent life insurance but with more flexibility than whole life. You can adjust the frequency or duration of premium payments and may be able to adjust the death benefit as well. But if you draw down the cash value too much, you could cause the policy to lapse. And since universal life policies grow based on current interest rates, it’s possible the cash value might not grow as expected and you may have to increase premiums in the policy’s later years to avoid a lapse.
Northwestern Mutual’s universal life policies are available to applicants up to age 85. It also offers single premium and survivorship UL policies.
Variable Universal Life Insurance
Variable universal life (VUL) insurance is a permanent life insurance policy with an investing component. It’s considered the riskiest life insurance product because the cash value is directly invested in the stock market and can lose value. Plus, policy fees tend to be higher with this type of coverage. In other words, if policy investments lose value or don’t perform well enough, you may have to increase the premium to keep the policy from lapsing.
Northwestern Mutual offers VUL policies to minors and adults up to age 75. Minimum coverage amounts are $50,000 and $100,000, respectively.
Riders increase or extend the coverage of your life insurance policy. Some riders, called living benefits or accelerated benefit riders, let you access part of the death benefit early, before death. Some of Northwestern Mutual’s riders are below. Most cost extra and need to be selected when the policy is issued:
- Additional Purchase Benefit: This is a guaranteed insurability rider that lets you increase your coverage at future dates without having to reapply or prove that you’re still insurable.
- Waiver of premium: If you become disabled, the company will pay your premiums for as long as you’re disabled.
- Early payment benefit: Though not a rider, per se, whole life and some term policyholders may be eligible to apply to receive a portion of the death benefit early in the event of a terminal illness (when death is expected within six months).
- Long-term care rider: This is a type of accelerated death benefit (ADB) that allows you to access a portion of the death benefit early, usually on a monthly basis, to reimburse the costs of care. You typically need to have lost the ability to perform at least two activities of daily living (ADLs) to use this rider.
- Chronic illness rider: Similar to the long-term care rider, you need to lose the ability to perform at least two ADLs to receive a portion of the death benefit early. However, you can receive it as a lump sum and may not be required to spend it on care.
You can call Northwestern Mutual’s customer service number at (866) 950-4644 between 7 a.m. and 6 p.m. Central Time from Monday through Friday. The company does not offer online chat or an online form for non-existing customers to request an email response.
Is Northwestern Mutual Right for Me?
A lot of customers seem to think that Northwestern Mutual does an outstanding job—as exhibited by its No. 3 ranking by J.D. Power and extremely low number of complaints. Plus, it has a stellar financial strength rating and long company history, meaning it’s likely to weather financial storms in the future just as it did in the past. Without question, Northwestern Mutual is a standout company. But it is trailing its peers when it comes to online features like quotes, applications, and policy-specific information.
If you prefer to pick up the phone and speak directly to an agent, these oversights will probably mean little to you. But if you want a quick quote for term life insurance or the ability to apply online, you may want to check out competitors in our list of the best life insurance companies.
If you’re looking for dividends, it’s worth your while to pick up the phone to apply for a Northwestern Mutual policy, and you’ll probably need to do it with any company offering dividend-eligible policies, as most of those policies can’t be bought online. However, if you’re looking for an indexed life insurance policy or guaranteed issue policy (burial insurance), this isn’t the company for you.
Our Methodology: How We Review Life Insurance Carriers
We designed a comprehensive ranking methodology based on consumer priorities and life insurance company fundamentals to rank more than 90 insurers across five general categories: financial stability, customer satisfaction, product and feature variety, the overall buying experience, and cost.
In order to do this, we collected over 5,000 data points and scored each company based on 55 metrics. We grouped metrics by category to see how insurers performed in each; we then weighted category scores to determine how companies performed overall.
To learn more, read our full Life Insurance Methodology.