Reputable? Whole Life with Northwestern Mutual...

Discussion in 'Life Insurance Forum' started by mx_599, Nov 13, 2009.

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  1. mx_599
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    mx_599 Well-Known Member

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    Hi everyone. I am about to open a whole life policy with Northwestern MutualI think the interest is around 6.-something.

    Are all whole life companies going to be about the same return?

    my plan is to over-fund the acct.

    So is this place as good as any other?

    thanks much

    mx
     
    Last edited by a moderator: Feb 24, 2012
  2. dgoldenz
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    dgoldenz Moderator Moderator

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    Good company, expensive products (overpriced if you ask me, but so is all whole life....). Just my opinion, but insurance is for death protection, not for investments. Dividends are not guaranteed.
     
    Last edited: Nov 13, 2009
  3. brookfieldpartners
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    brookfieldpartners Well-Known Member

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    I would secure a quote from MML, NYL, and Guardian, and make a decision from there.

    If you send me the quote you have, I can make an apples to apples with the NML.

    Sometimes NML is better based on your age and health. MML has the highest dividend payout last I looked.

    brad @ brookfieldpartners.com
     
  4. xrac
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    xrac Well-Known Member

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    If you are trying to use this WL as a savings tool I would recommend that you chose a company that is non-direct recognition. NWML is direct recognition.

    I believe that Mass Mutual, NYL, and Ohio National are all mutual non-direct recognition companies. Guardian and NWML are direct recognition.
     
    Last edited: Nov 13, 2009
  5. Full Throttle
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    Full Throttle Well-Known Member

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    Good company, good products. Whether over funding makes sense depends on your situation which none us on here know, I'm sure you talked about this with your agent.



    Be careful with this, it is the one thing I wish NML agents would avoid mentioning as it is highly misleading. They probably talked about the "dividiend rate" the company gives out, my guess is that is the 6% "interest" number you got.

    Make sure you understand this, this absolutely does not mean you get a 6% return on your cash value in the policy because the company declared a 6% dividiend. In fact, the dividiend rate has virtually zero meaning to you as a policy holder as far projecting the return in your policy. I've run across many NML agents who lead consumers to believe this is the return they get in their policy.
     
  6. dgoldenz
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    dgoldenz Moderator Moderator

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    If I charge you $2000 and give you $100 back, is that better than charging you $3000 and giving you $180 back? One gives me 5%, the other gives me 6%....just something to think about.
     
  7. Full Throttle
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    Full Throttle Well-Known Member

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    How can you possibly do this on whole life coverage? Compare the premiums on a whole life policy by the same death benefit? That would be highly misleading. Compare illustrations? Also very misleading. The illustrations are all but guaranteed to be wrong.

    I don't work for NML, never have. In fact, I like Ohio National and Mass Mutual, but NML is a top tier carrier as well. You will never know which one was best except in retrospect. I would say going with any of those three companies for your whole life is a good option. If you have determined whole life is the best fit for your situation, I would take the NML policy.
     
  8. LGilmore
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    LGilmore Well-Known Member

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    NWM is a strong solid company. There are several companies that are just as strong and solid. I think it's a matter of as just as good a place to be rather than better. While I think there are quite a few that are just as good, I don't think any one particular company is "better" than the others.

    It may come down to features or options as some have suggested, that is worth looking into. It will either confirm your decision or expose you to a few other companies.

    There's a lot of good products out there and good companies. The life insurance industry weathered the financial storm better than many other industries. What used to be criticised in an up market is no longer considered a "bad idea" by the gurus who had everybody leaning towards the market. Pretty quiet right now. After this market collapse is a memmory the gurus will return hoping everyone has a short memmory.

    Good luck and communicate with your agent about your concerns. I know I would appreicate it. Give him a chance to answer your questions and concerns.
     
  9. DHK
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    DHK Well-Known Member

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    They are a good company. If you die while the policy is in force, they'll pay the death benefit (just like all insurance companies).



    Read Full Throttle's post. He's spot on. Ask your agent when you'll see the 6% return in the illustion (er, I mean illustration). The first couple of years have almost ZERO return. Even if you are putting in additional PUA (Paid up additions) in the policy to accelerate the dividends, divide the projected dividend into your TOTAL PREMIUMS and determine what you're illustrated to get. (Hint: It's lower than 6% - particularly for the first 10 years you own the policy.)

    Insurance never is and never was an INVESTMENT. It is a great SAVINGS vehicle. Investments and savings are two similar words. But similar words and the right words are the same difference between lightning and the lightning bug.



    Nope. Too many variables. Each company's investment experience, cash flow, the length of time your policy is in force, age, premiums, underwriting classifications all factor in how much your dividend may be. (Dividends aren't guaranteed to be declared every single year regardless of past performance for the past 100+ years either.)



    Why? What is your strategy for doing so? How do you intend to benefit from this strategy?

    I'm NOT saying that this is bad. But if you're going to put a lot of money into whole life, you need to know WHY you are doing it. If you DON'T know why, (or it's just because the agent tells you to) then you'll lapse the policy and risk having NOTHING to show for what you DID pay for it.

    If you don't know EXACTLY how it benefits you (and I'm not talking about projected cash values as those are illusions and are guaranteed to be higher OR lower than projected) then don't buy the policy.

    Companies don't matter as much as the service and the insurance advice from your agent.
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    No one knows what you're talking about.

    Direct or Non-direct recognition is all about how any outstanding loans are treated when the company declares a dividend.

    A direct recognition company will deduct the amount of the outstanding loan against the cash values to determine the size of the dividend you may receive.

    $100k cash values - $50k loan = $50,000 basis for your dividend.

    A non-direct recognition company will NOT incorporate your outstanding loan in determining your policy dividend.

    $100k cash value with a $50k loan = $100,000 basis for your dividend.


    This is good so you can use your money in multiple areas to have it work for you.

    Just remember that if you pass away while there is an outstanding loan against the policy, that it will be repaid out of your death benefit. Your beneficiaries will receive the remaining balance of that benefit.

    I hope I made that more clear as to why non-direct may be more preferable to direct.
     
    Last edited: Nov 13, 2009
  10. BNTRS
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    BNTRS Well-Known Member

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    Northwestern is a good company, they definitely have great financials. However, their premiums are a little high and they have a steep load fee on their paid up additions (the mechanism used to overfund the policy)

    And important metric that often goes overlooked is the surrender cost index. Northwestern and Guardian have consistently had the lowest costs index in the industry.

    Guardian has an amazing product that I think you should take a look at. If you really like your agent at Northwestern you should talk to him about this. Northwestern is proprietary and won't let other non NMFN agents sell their products, but they are not a captive company so their agents can sell other company's products.

    Whole Life insurance is a great foundational piece to a financial plan. Unfortunately a lot of people fail to understand how it works.

    I'd be happy to answer additional questions
     
    Last edited: May 2, 2013

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