Northwestern Mutual Life Insurance Review
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UPDATED: Jun 14, 2011
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Northwestern Mutual is one of the largest insurance companies in the nation offering many types of life insurance with over $180 Billion in assets. The company has over 3.3 million policyholders and was founded over 150 years ago.
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History of Northwestern Mutual
Northwestern Mutual was founded in 1857 and has survived through the Civil War, the market crash in 1929, the Great Depression, two world wars and many recessions. The company was founded in Wisconsin when the state was only nine years old. Within the company’s first three years of business, a train traveling to Wisconsin had an accident and of the 14 people that died, two were Northwestern Mutual policy holders. The policy claims amounted to $3,500, and although the company only had $2,000 in reserves, the president Samuel Daggett, and treasurer Charles Nash immediately took out personal loans for the necessary funds and paid out the claims right away. The company experienced a substantial increase in sales after the accident, and expanded into several new markets. In 1864, the first dividends were paid out to the company’s policyholders. Northwestern Mutual has continued to pay dividends every year since 1872. Northwestern Mutual established a reputation early on for maintaining financial stability keeping its promises to policy owners. One of the company’s presidents, Michael Cleary (1932-1947) said that even during the Great Depression, Northwestern never had a time when it could not have met every request for policy payouts with funds from its own reserves.
Today the company is headquartered in Milwaukee, WI and serves as the nation’s largest direct provider for individual life insurance policies. Northwestern Mutual has been named as the “World’s Most Admired” life insurer according to Fortune magazine’s annual survey for 2011. During the catastrophic events on September 11, 2001, 157 of Northwestern Mutual’s policy owners were mortally wounded. The only other time so many policyholders lost their lives in a single event was the sinking of the Titanic in 1912. The company worked round-the-clock to process and pay over $125 million in insurance claims, with most being paid out within five days after the company received notice of the claim.
Northwestern Mutual’s Financial Strength
Northwestern Mutual has been awarded with the highest financial strength ratings possible for companies in the life insurance business by each of the four major agencies, A.M. Best, Moody’s, Standard & Poor’s and Fitch ratings.
What types of life insurance does Northwestern Mutual offer?
Northwestern Mutual wants its customers to understand how mutuality benefits them. The company starts by selling superior products, withholding money to cover a safe reserve margin and surplus each year, and then returns the rest of the money that would be considered profits by other companies, to participating policyholders in the form of dividends. The company expects to pay almost $4.9 billion to policyholders in dividends for 2011. The company also vigorously manages its costs, which contributes to higher dividends for customers. The company offers a wide range of products. Its life insurance products include the following:
- Term life insurance
- Permanent life insurance
- Combination life-insurance
- Variable life insurance
- Universal life insurance
The company offers many other types of products to address all of its customers’ needs as part of a comprehensive, long-term financial planning solution. These products include:
- Disability insurance
- Long-term care insurance
- Mutual funds
- Education funding
- Cash management
- Advisory services and programs
Northwestern Mutual in the Community
Northwestern Mutual operates the Northwestern Mutual Foundation. The company has given back to communities for many years through the volunteer efforts of its employees and field agents along with the foundation. In the last 10 years, the Northwestern Mutual Foundation has given $170 million to more than 1,400 nonprofit entities that serve communities across the nation. In the last year, $50 million in grant money has been provided to nonprofit groups. More than 1,000 Northwestern Mutual employees donate 30,000 volunteer hours every year to community efforts such as charity drives, mentoring, serving on the board of nonprofits and other group activities.
Northwestern Mutual Customer Service Review
Northwestern Mutual has life insurance in-force persistency rates of 96 percent, which is an important indicator of satisfied customers; the company the insurance industry based on customer satisfaction. The company has also paid out more dividends on individual life insurance policies than any other insurance company for the last 12 consecutive years. The company is also dedicated to helping its customers through any of the challenges that life brings. The company offers financial planning to help take people through some of the rough spots in life such as a job loss, a divorce or the loss of a loved one. Northwestern Mutual can also remove the anxiety of planning for retirement, caring for an elderly parent, saving for the kids’ college or planning for a child who has special needs.
Finding the Best Life Insurance
Finding the right life insurance policy may require a little bit of homework, although the investment pays off. A few things to keep in mind when shopping for life insurance: make sure to buy life insurance as soon as you need it, preferably when young and healthy since rates increase dramatically for older applicants and those who have declining health. It is important to answer all of the questions truthfully on a life-insurance application, because an insurance company will thoroughly investigate each claim before paying it out. Additionally, if purchasing term insurance make sure to buy enough to cover all your needs, since term rates especially low right now. Additionally, tailor the policy to your specific needs to avoid overpaying, and use the web to shop around for life insurance if you prefer to avoid pushy salespeople, and have a clear understanding of the different types of life insurance and which type would make sense for you and your family.
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