Does Northwestern Really Outperform MassMutual?

[mikichan]

So my picks...

I mentioned before I liked Guardian, Penn Mutual, and Ohio National (listed in no particular order).

Thank you for the suggestions. I will look into them. I think I did look at Ohio National Prestige Max, but MM beat on everything (face value, guarantees, illustrations and projections) (I think -- I'll go back and look at the quotes again to make sure I didn't miss something). I haven't looked at the other two.

I will ask about the disability fine print with MM and NML.

A question -- I asked my MM agent to run me some quotes from NYL, since he'd told me he could if I really wanted to. He said he was going to, but then came back and said it turned out NYL only allows outside agents to run it on policies with 20K premium or more. Is that normal?

(for younger people, it gets a lot more expensive overtime because it's OYT). *

What is OYT?

If I'm correct and cash is the most important. You need to really push the NML and Mass agent to designed blended policies focusing on PUA in the outlay and not base premium. Be demanding here, there's no problem with that. If death benefit is more the concern (and I'm pretty sure it's not) that opens up a completely different conversation about completely different WL products.

Yes, you are correct re cash. I will talk to them about this (or maybe just the MM agent -- I kind of told my NML agent I'd gone with MM, which led to him trying to convince me otherwise, which led to me starting the thread because I started having doubts -- so I feel weird going back to him unless I'm pretty sure that I might go with NML -- he already ran a few with the ACL, so I'll look at them again).

Concerning CFP83, you could definitely shoot him a PM. He hasn't posted in a few weeks so no idea what's going on in his world right now. You'll need 20 posts before you can send a PM; just do what everyone else does. Go post "that's was a good point" at the bottom of a bunch of threads until you hit 20.

OK. Thanks.
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Third about the DI, there are tons of ways to collect DI benefit as an office worker without being a paralegic. DI that is bought outside the work place is substantially different for starters. You can collect a partial benefit if your disability makes it such that you are no longer able to work full-time or the disability has caused some other reduction in pay. Also, there are plenty of things that can you leave you disabled. Crippling back pain that limits your ability to sit and work for 8 hours, headaches and other mental impairments that leave you unable to focus and work. These could be due to sickness or injury, lots of things happen. There are plenty of other things as well, loss of eye sight, hearing, sensation of touch or even loss of hands would seriously impair an office worker.

So buy some individual DI to supplement your benefit at work, and take the rest of the money and put it into WL. Really, I'd just flip a coin too. While there are some differences, the unknown over the next 30 years will vastly outweigh small contract differences between NML and Mass.
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The last time I looked into getting DI was when I had just graduated college. I just thought the option thru work was really expensive and it was hard to find any independent companies outside of my hr benefits department. So I stopped looking, never actually researched what it was, and never thought about it seriously since. Which companies give good DI?
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Ohio National .... PUA's aren't quite as flexible, you choose an amount at issue and it stays fixed, but you can make annual dump ins and surrender (swap) term death benefit with PUA death benefit.

I think you lost me there. What is annual dump in and surrender swap term death benefit?

Penn Mutual ...Their PUA load is fixed at 5% and is the most flexible of the bunch. There are two riders actually, but ultimately you can minimize it to $25/4 year period and max it to whatever you want (underwritten at policy issue, i.e. you can be underwritten for a few million, if you qualify financially and dump PUA's up to this amount whenever).

That sounds interesting if it means what I think you mean (with MM and NML, it sounded like you had to pay the contracted annual additional PUA amount at least once every 3 years or lose it forever -- this sounds like it's a lot more flexible). I'll try to contact a Penn agent and ask.

The product is blend-able (but this is their weak spot 4:1 term to WL max blend).

You mean the max term value is 4x the WL base amount?

 

[BNTRS]

What is OYT?

One year term insurance. It's renewed annually, guaranteed renewable, but this renewing means it'll increase with the renewal. Now, there may not be a net increase in total cost (outlay going towards the term insurance) because the term amount is decreasing as it is automatically replaced with PUA death benefit.

The last time I looked into getting DI was when I had just graduated college. I just thought the option thru work was really expensive and it was hard to find any independent companies outside of my hr benefits department. So I stopped looking, never actually researched what it was, and never thought about it seriously since. Which companies give good DI?

Berkshire (Guardian) is the Cadillac of DI. Here's why:

- Pure own occ coverage

- COLA that automatically becomes part of the benefit upon recovery (no need to purchase the increase)

- Residual (partial benefit) with a 15% loss of income threshold and purely loss of income trigger (some require a loss of time and duties at work to collect)

- Unlimited recover benefit (meaning you can go back to work part time and the policy will supplement lost wages)

- A life time benefit rider

- A waiver of premium that waives premiums for 6 months before disability and 6 months after recovery

- A waiver of elimination period for presumptive and re-occurring disabilities (as well as any disabling event that takes place for 5 years after recover no matter what the cause)

Mass has a pretty good product

- Own occ by rider that can pretty much match what Berkshire has

- A COLA that will increase like Berkshire, but will require you to purchase the increase if you want to keep it.

- An unlimited recovery benefit

- Residual kicks in at 20% income and is income dependent

- No life time rider

- Waiver of premium is for the 6 months prior only

- Waiver of elimination for presumptive only

The standard is another great DI company

NML will issue own occ, but their residual is time and duties dependent as well as loss of income. You cannot purchase COLA increases (so they go away upon recovery)

Met Life is the only other carrier with a life time benefit rider

Ohio National recently revamped their product, it's pretty good. Still not Berkshire good, but Mass mutual good definitely.

Some of this depends on the precision of your developed skills. The highly technically skilled opt for own-occ coverage because it protects the development of their special skills. Some people are highly paid, but that pay check isn't quite so dependent on a specially developed skill, so they sometimes cut corners on DI a bit.

I think you lost me there. What is annual dump in and surrender swap term death benefit?

When I say dump in, I'm referring to PUA's going into the policy. So, your placing more cash into the policy that specifically goes towards PUA's, think putting more cash into the policy than you have to, to take advantage of the higher rate of return that money is going to earn.

Swapping term is what is happening in all situations, it's just a little more mechanically explicit at ONL. The term is used to increase the MEC limit on the policy. PUA's have a death benefit associated with them. As you put money into the policy to purchase PUA's you're increasing death benefit from the PUA's, so you can either increase the total death benefit (kind of rare because it's not really an optimal approach for building death benefit or cash) or surrender some term insurance and the death benefit is replaced with the PUA death benefit.

That sounds interesting if it means what I think you mean (with MM and NML, it sounded like you had to pay the contracted annual additional PUA amount at least once every 3 years or lose it forever -- this sounds like it's a lot more flexible).

Yes, you can skip for this period and just need $25 to keep it going. NML I can't remember the exact details, but Chuckles would know. MM you have to make a minimum of $300 (which I think they breakdown as $100/year but they give you you a 3 year window to do it). If you want to look at a Penn illustration, let me know what provisions you're looking for and I can send you one to look at.

You mean the max term value is 4x the WL base amount?

Yes, you can do 10:1 with some of the others (Guardian, ONL, Mass). You can do even more with NML.

 

[insurancemet]

@ mikichan, who did you end up buying from NML or Mass?

 

[NYC Adam]

I can't read this page after page of this. Best long term value = NMFN. History proves it, Blease research proves it. If you like, I can provide an actual history of comparable whole life policies from 11 carriers taken out in 1990 and tracked to 2010. Yes, it is an NMFN document, but actual #'s, not forward projections. Also again Third Party Blease research that shows best long term value - NMFN. Some of you are right about things like NMFN holding Junk bonds, but then you could mention that MM had money with Madoff, had bad mortgage backed securities, etc. If you MUST, take a look at both firm's web pages - they both have extremely detailed financials on every asset class, a breakdown of every asset and holding. If you would like links, I can provide but again that would only lead YOU to project.

 

[scout]

If you like, I can provide an actual history of comparable whole life policies from 11 carriers taken out in 1990 and tracked to 2010.

Are you referring to the Don Antonette piece?

 

[NYC Adam]

No, more recent 3rd party research from Blease = Full Disclosure reporting.

 

[BNTRS]

Blease Research aka Full Disclosure.

They publish a 10 and 20 year historical performance on participating whole life looking at a 45 year old male and 55 year old issued preferred for $250,000 in death benefit.

NML and SBLI have led the top spots when ranked for internal rate of return on cash surrender value on the 20 year actual.

 

[scagnt83]

It matters a lot more how much you can pull out and how much that will cost.

 

[insurancemet]

Okay so which company would cost more to pull out. Also with Mass, when they compute their dividend they don't include their expenses but some do I assume so would that then not be a fair comparison like when a Mass agent say their dividend is higher than so and so but the other company includes expenses while Mass does not include them?

 

[otberry]

Why are you buyng cash value insurance? Is it for the death benefit increasing at or above inflation, or is it to take cash out of the policy? You will see that NW has higher cash IRR and MassMutual has Higher Death Benefit IRR? Also, if you want to find a true comparison, have the illustrations run on a premium number and not a death benefit. Then you know what you get dollar for dollar.