Northwestern Mutual Life Insurance: What you need to know
Northwestern Mutual has been providing life insurance since the middle of the century before last, so it certainly has experience in the sector. As the name suggests, Northwestern is a mutual company, meaning it doesn’t have shareholders. Instead, policyholders become part of the company, and may even benefit from an annual dividend if the company is performing well.
It generally does. The company expects to pay $5.6 billion in dividends in 2019. Northwestern is highly regarded by its customers. It boasts 4.5 million clients across the country, 96% of whom have stayed with the company for several years. For customers looking for life insurance, an even more important statistic is Northwestern’s financial strength rating: the company has been given top marks for financial strength from all major credit agencies.
Northwestern Mutual: Features
- Comprehensive basic policies
- Decent additional services
- Highest financial strength score
Information support: Good online information hub, tackling subjects beyond basic insurance
Customer support: Telephone, online support and social media
Interface: Browser and mobile app
Northwestern offers everything most life insurance buyers would need. It sells two types of universal life insurance, a single payment policy and one that allows you to adjust features and price as your circumstances change. Other options include term life insurance - insurance for a specified length of time or to a certain age - and whole life insurance, which covers you for the entire span of your life and, at the same time, allows you to build cash value that can be used for (for example) helping to pay for a child’s college education or supplementing your retirement income.
It also offers a number of special insurance options, like disability insurance for individuals and specifically for doctors and dentists.
Northwestern Mutual also offers a suite of other financial services, from retirement planning to college savings plans. It is a comprehensive service and customers clearly appreciate being able to talk to Northwestern representatives about a range of financial issues, and receive relevant advice.
Northwestern’s financial strength is exemplary. It has a rating of A++ from A.M. Best, which is considered ‘superior’ and is the highest possible score. Financial strength is important, because it is effectively a measure of how easily insurance providers can pay claims. Remember, a life insurance claim might not be made for years or decades after a policy is purchased, so financial strength is also a good indication - though of course no guarantee - that the business will be able to play out many years in the future.
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Northwestern Mutual Life Insurance: Interface and usability
- Excellent information hub
- Well designed website
Northwestern’s website is clean and well designed, allowing you to find a financial advisor or make a claim from the homepage.
The website also operates as an information hub, offering a large number of articles and how-to pieces on your financial life, from getting married to moving back in with your parents. The hub is far more than an exercise in selling Northwestern products, and is a useful resource in its own right. We particularly liked the detailed section explaining how to make the most of your first conversation with a financial advisor.
The company offers a useful mobile app, though better financial apps exist.
Northwestern Mutual Life Insurance: Quality of product
- Top of the JP Power customer satisfaction ranking
- Fewer complaints than the average
There are plenty of people who would tell you that Northwestern Mutual offers the best life insurance on the market - at least in terms of major nationwide providers - and its customer satisfaction scores would seem to bear them out.
In the annual JD Power survey (opens in new tab) of the 23 largest life insurance providers in the country, Northwestern received a score of 810 (out of 1,000), putting it at the top of the table. The U.S. Life Insurance Study measures overall customer satisfaction based on performance in six factors: application and orientation; communications; interaction; product offerings; price; and statements. Northwestern achieved the maximum five stars in three categories plus overall satisfaction, and four stars in the remaining three categories. In the language of JD Power, Northwestern is either ‘better than most’ or ‘among the best’.
Another way to judge life insurance companies is by calculating the number of complaints that have been received about them by state regulators. Luckily, the National Association of Insurance Commissioners measures just such a metric. At last count Northwestern attracted significantly fewer than the median number of complaints.
Northwestern Mutual Life Insurance: Verdict
Northwestern Mutual does everything well, and some things very well. We were impressed with its policy options, information hub and the care it takes to make sure customers are well served. It is top of the JD Power survey customer satisfaction survey in 2019, but that isn’t a one-off. Northwestern was runner up in 2018.
In other words, if you’re shopping for life insurance, Northwestern should almost certainly be one of the quotes you collect. It shouldn’t be the only one, because it might not have the very best policy for your particular circumstances. But with excellent financial strength and a large number of evangelical customers, it should always be a contender.
That’s even more true in light of its mutual status, which means eligible customers will receive a share of annual dividends when the company does well. Put it all together and Northwestern Mutual is an easy provider to recommend.