Dividend Scale Predictions

[Lloyds of Lubbock]

It is that time of the year when the relatively meaningless dividend interest rates come out.
Just a guess
NML hold
Mass down 15bps
NY Life down 20 bps
Guardian down 10 bps
Ohio NTL down 50 bps
Lafayette hold

 

[Lloyds of Lubbock]

Ohio NTL did drop 50 bps.

 

[Allen Trent]

not sure what the calculated % will be, but NWM announced a record dividend payment of $6.2B just an hour ago.

To Our Policyowners,

In a year that has been marked by volatility and uncertainty, I’m pleased to share some very good news. This week, we announced that Northwestern Mutual will pay a record $6.2 billion in dividends to our policyowners in 2021. Notably, our life insurance payout is more than double our closest competitor’s.

Ultimately, this historic payout reflects the way we manage your company — with a long-term and level-headed view so that you are positioned to benefit from our success in all economic seasons. We are a mutual company — your company — and we exist to help you become more financially secure.

Dividends are one of the most important ways that we share our success. They can be used to increase the cash value of your policy and — in some cases — death benefit, reduce your premiums, or fund immediate needs as cash.

When the pandemic began to disrupt our lives in early 2020, I shared that we were strong, prepared, and ready — and that we would continue to proactively build your company during this time.

• Financially, we are the strongest company in our industry. We maintain the highest possible financial strength ratings of any insurer, and all four major ratings agencies have reaffirmed our ratings during the pandemic.
• We welcomed a record number of new clients this year, helping people plan and become more financially secure.
• We now protect more than 3.9 million people and have more than $1.9 trillion of protection in force. A record number of people selected our permanent life insurance in 2020 as part of their financial plan.
• Our investments business continues to be one of the fastest-growing independent broker dealers in the country with nearly $175 billion in client assets as people move their money to Northwestern Mutual.

Because of our strength, we were able to make significant investments when markets dropped to low levels earlier this year. As markets have rebounded, our strategy is already paying off.

We have carefully managed expenses, maintained our strong underwriting and risk-management processes, and continued to invest in our client experience and digital tools, which will help you connect with your financial plan and work toward your goals. Your company is thriving.

Our long-term view isn’t new. We have paid a dividend every year since 1872, through tough times that included two world wars, the Great Depression, numerous recessions, and yes — even a global pandemic.

We are here for you. Now more than ever it’s important to have a financial plan, one that evolves as your needs change. Our expert advisors will build a plan tailored to your needs and, more importantly, help you put your plan into action. Reach out to our advisors today to take the next step.

Please know that we are deeply grateful that you have put your trust in Northwestern Mutual, and look forward to serving you and your loved ones in the years ahead.

Sincerely,

 

[DHK]

Since dividends aren't rates of return... and even if some aren't lowering their dividend scale / %... that just tells me that less policyholders are getting dividends in the earlier years.

They're just estimates anyway.

And if we're selling by dividends... we probably aren't doing it right anyway.

National Ethics Association

 

[DHK]

I decided to go ahead and write this:

https://www.taxexemptwealth.com/post/understanding-life-insurance-dividend-payout-announcements

 

[scagnt83]

I predict Penn keeps theirs the same.

 

[Lloyds of Lubbock]

The IRS is quite aware of dividends paid on policies.
That's why taxing the internal growth on Life Insurance policies is constantly on their hit list.
While Mass changed their 10 pay, all you need to do is add a minimal amount of term to avoid mec status.
Isn't adding term and funding to the mec limits, what you propose to potential clients to have access to tax free income later in life?
If that is true,the change they made should have no effect on you.
They will be repricing again in 2021 as all companies will, as mandatory interest rates on valuations are being lowered.
On the whole I liked your article.

 

[Lloyds of Lubbock]

David O'malley (sp) from Penns management team was in our office a few months ago and he claimed their dividend will remain the same for a few years.
That would be very impressive in this environment, I hope he is right.

 

[DHK]

Thank you for your kind words! Of course, it was just meant to be a simpler explanation.

Isn't adding term an funding to the mec limits, what you propose to potential clients to have access to tax free income later in life?

The Ohio National Limited Pays (Prestige Max, 10-pay, & 20-pay) were already designed for max-funding and for income loan distributions in retirement. However, they just redesigned them to add a 10-year term rider and PUA rider for these limited pay policies. Why? Probably to "compete" with first year cash values of NYL custom whole life and similar policies. (We didn't ask for it in The Breakaway League...) Of course, agent compensation is cut by these riders. (Although they're not available at age 65+...)

Our product design specialist actually found that by eliminating a 1st year dividend payout that future loans can increase cash flow by another .5% (or something like that)... without cutting agent comp. That just by postponing that benefit to the future ONE time... can have a dramatic impact on the future cash values was very appealing to us.

But we just deal with the cards that we're dealt, particularly for registered reps who may have to justify and quantify a 'best interest' contract for life insurance.

 

[Lloyds of Lubbock]

NML held
Mass down 10bps