So how long have you been an agent and who is your primary company?
Does Northwestern Really Outperform MassMutual?
- Thread starter mikichan
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- #42
I am not an agent. Not sure why you think that. I simply like to do my homework, especially when it's such a long time commitment. I'm assuming you're an agent or just an ass, but if you are an agent, and your clients don't ask these questions or try to make sure they're not making a mistake before they commit to such a long time thing, then they should.
Since I KNOW it's a long time commitment, I am super cautious and want to make sure I'm not making a mistake. That includes haunting the forums, reading as much info as I can, and asking questions. Which is why I'm grateful to Chuckles, BNTRS, VolAgent, and njh_lfg for actually trying to help.
I am still stuck in the same dilemma as I was at the beginning, but at least their posts helped me to understand what I should be asking the MM agent.
njh_lfg might be right and I should go term, or just split the difference and go with both companies. Underwriting takes a while, if I remember correctly, so I still have time to look over my finances, and decide if I really can afford to make a commitment like this. Esp since so much of my current income is already going towards my 401k and IRA.
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I do want to throw one more question out there, though.
My MM agent said no matter how he tried, the policy would become a MEC if I added an PUA (ALIR) option. But one of the scenarios he ran, the policy becomes a MEC after 30 years or so.
But can't that be avoided by stopping the ALIR option before the 30th year, or skipping the ALIR payments once in a while (which I would most likely do)? Just wanted to check.
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It's probably not fair or accurate to categorically declare either one better. The old aphorism is: if you aren't getting the right answers, you aren't asking the right questions.
You've summed up the high and low points for each one. Mass will probably perform a little better dollar in dollar out because they have a better loan provision. But you'll pay for that in having to make a much more serious commitment to your outlay than you will with NML.
If flexibility is key, then NML is probably worth the cost of loosing a little in expected distributions.
I think someone asked already, which agent do you like better? Assuming there is a Mass agent and an NML agent. And yes, these two are so close that it literally could come down to that, and you'd be fine either way.
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- #44
I meant to say better for my needs/situation, specifically. I know they are both great companies, which is why I'm so undecided and twisting myself into knots trying to decide.
You're right, I'm not sure what questions I should be asking. But the discussion here has helped a little. Not a ton, but a little.
I am fine with either agent. I guess what it is is, after talking this out, I"m not sure I should be getting WL.
If I do get WL, I am attracted to the flexibility with the NML ACL, but since I've already started MM underwriting, I feel like I would be screwing my MM agent if I dropped the MM application (and i do like the guarantees, so it's not like I"m just doing it to please him).
Let me elaborate a bit more, because I get the feeling you may have taken that the wrong way.
My comment about categorically declaring one better, was pointed at us (agents). As far as your situation goes, there's still a lot we don't know, so best we can do is highlight where each is strong and weak, and let you take that information and access against the situation.
The point about not asking the right questions is much more philosophical in nature. I don't mean ask questions here, I mean ask yourself. A lot of this comes down to you and how you feel. And it's easy to not really know, the tough part is in honestly asking yourself what is important, and what you like.
I'm not a huge fan of either company, so you won't find huge amounts of cheer-leading for either one coming from me, as I've already sort of hinted. And I don't think I'm the only one who has posted here who feels this way.
As for screwing the Mass agent. Every agent deals with cases falling threw. It probably won't be his or her fist or last if you decide to walk and go with NML.
The answer to the stopping ALIR before MEC and avoiding MEC status question is yes.
Now, here is something you might want to try and do, which may prove both educational and helpful. There's an agent around here who goes by the handle CFP83. He's a former NML current Mass career agent. You've already heard from a current career NML agent (Chuckles). Perhaps getting some thoughts from the forum on the other side will help.
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My comment about categorically declaring one better, was pointed at us (agents). As far as your situation goes, there's still a lot we don't know, so best we can do is highlight where each is strong and weak, and let you take that information and access against the situation.
The point about not asking the right questions is much more philosophical in nature. I don't mean ask questions here, I mean ask yourself. A lot of this comes down to you and how you feel. And it's easy to not really know, the tough part is in honestly asking yourself what is important, and what you like.
I'm not a huge fan of either company, so you won't find huge amounts of cheer-leading for either one coming from me, as I've already sort of hinted. And I don't think I'm the only one who has posted here who feels this way.
As for screwing the Mass agent. Every agent deals with cases falling threw. It probably won't be his or her fist or last if you decide to walk and go with NML.
The answer to the stopping ALIR before MEC and avoiding MEC status question is yes.
Now, here is something you might want to try and do, which may prove both educational and helpful. There's an agent around here who goes by the handle CFP83. He's a former NML current Mass career agent. You've already heard from a current career NML agent (Chuckles). Perhaps getting some thoughts from the forum on the other side will help.
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We get threads started like this about every 3 months like clockwork. A consumer asks questions using terminology that no one except a somewhat well-informed agent would know to ask. And sometimes I might even be that a$$ you called me, but not this time.
If you're a concerned consumer and not another (or the same) agent posing as a consumer who gets a kick out of stirring things up to see which agents will dance for quarters for you, here is my advice...
Flip a coin. Pick one. Go with the agent you feel most confident with. You are choosing from good companies, and without a crystal ball you cannot decide with mathematical certainty which policy will be best over time.
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- #48
In this case, you are wrong. Terminology can be picked up, esp when you've been trying to read up. It is not exactly med school. I don't know if there is an agent who fakes, as you call it, consumer threads, but I have read several of those threads you are talking about, and a lot of this terminology does get thrown around. I don't know, and don't really care, who started the threads or why, because those threads were the starting point for me to understand more about WL. Most other info on the net is basically boilerplate brochures from life insurance companies, which DOES NOT HELP.
Or you get a lot of buy term and invest the difference advice, which is my inclination, except that I haven't turned out to be a great stockpicker, just a great saver. And my mom's Metlife policy is doing fine (ignoring the first 13 years, since I didn't pay those premiums, and I didn't get the illustrations from her original contract, so I can't compare with initial projections and see if it's performing better/worse than expected).
I didn't know anything about WL when I bought my first policy years ago. It hasn't been doing as great as I would wish. So this time around, I'd like to try to know a little bit about what I'm getting into. The premium for a 20K policy and a 200K policy are way different in terms of commitment.
I've been told I'm way ahead of the game in terms of net worth, considering my age and salary. That's because instead of blindly jumping in, when it comes to long term financial commitments like this, I want to make sure I should be making this commitment, since once I make it, I will have to make the best of it. Dropping it's not an option when you look at the illustrations and realize that for the first 20 years (esp the first 10), you'll lose a LOT of money if you don't.
You posted before about how crediting rates and technical details don't matter except to agents. Actually, it does matter to me, because since my concern is future performance, I would like to, at least somewhat imperfectly, understand how it works, so that I have some understanding of why my current policy is nowhere close to the illustrations, and how to read the rates of the two policies I am considering.
You shouldn't be so dismissive. People like me do exist.
I'm definitely getting life insurance. And I would love to get something at the end of it. But, I want have some confidence that any policy I buy now will actually perform somewhat like illustrated. Which means trying to understand and figure out what's going on with the companies.
Esp since, as ppl have pointed out, the companies will highlight policies that have seriously outperformed illustrated (for example Don Antonette study that was posted before, and the NML comparison my agent sent me). But my own experience with my policy...not so much, yet.
All the buy term advice I read normally says, drop the WL if you've just bought it, but hold on to it if you've had it for longer than 10 years.
So I want to find out if it's just because it hasn't been long enough, or whether the marketing materials (from any company) is full of bs.
I don't get a "kick". I appreciate the agents who are responding. Getting info from insiders really helps with understanding some of the more arcane aspects. Some of them believe really strongly, such as Chuckles, which is great because it means I get answers that are similar/the same to what my own agents would say, without feeling like I'm wasting their time if I end up walking.
If my agent spends a lot of time answering my questions, I start to feel obligated to buy a policy from him. Since I'm questioning whether I'm doing the right thing, that's NOT something I want.
It's easier if I get some of the answers from forum posters who aren't trying to sell me a policy because 1) less incentive to spin, and 2) less awkward if I walk.
Obviously, the flip side of this is that because each agent has good points to defend his position, it's giving me more questions. But at least I can skip asking some of these questions, and know how to ask some of the other questions.
Flip a coin. Pick one. Go with the agent you feel most confident with. You are choosing from good companies, and without a crystal ball you cannot decide with mathematical certainty which policy will be best over time.
Since I have only met both agents in person twice (mostly email and phone), I can't form a judgment, other than both are very competent and believe in their products.
I don't have a crystal ball, and am not looking for mathematical certainty, since I know that's not possible. Just reassurance (or not) that I'm not making a bad decision.
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Sometimes I do wish agents would just (agree on and) say which company is better. Because then I wouldn't have to make the decision. But obviously that's going to happen, b/c each agent would have their favorite, which would make things even more confusing for me.
That's true. Posting kind of let me vent my worries a little, which helps clear my mind. I have more unanswered questions, but this has really helped me a lot.
I could tell, but not sure why? Everything I've looked at says they are at the top of the mutual life insurance company lists.
Do you think it would be ok to PM CFP83? Thanks so much!
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I have disability through work, yes. I don't know how good it is (I think it pays more the longer I work), but I'm not inclined to buy more. Don't those policies only pay out if you're unable to get any type of job similar to your field?
I'm an office worker, so I'd have to be paraplegic to actually collect, isn't that right? Even if I was in a wheelchair, I'd still be able to use a computer, so I wouldn't be disabled for insurance purposes.
So what would be the use of buying extra disability when I couldn't ever collect (and if I was paraplegic, I would really prefer they just not try to save me). At least that way, my life insurance would take care of the people I want to, without the added burden of having to take care of me, when they can't afford it.
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mikichan, there is so much misinformation in your last post, it is just sad.
First, the department of insurance really doesn't want agents saying one company is better than another. Second, when it comes to Mass and NML, there isn't that much difference. I tend to prefer Mass, but I really like Ohio National. That said, anyone who buys a NML didn't just make the mistake of a lifetime.
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.
First, the department of insurance really doesn't want agents saying one company is better than another. Second, when it comes to Mass and NML, there isn't that much difference. I tend to prefer Mass, but I really like Ohio National. That said, anyone who buys a NML didn't just make the mistake of a lifetime.
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.
There are a few reasons for the disparity. One, obviously, there are agents who work under a career contract and primarily sell their companies product. I remember when I was still career, and my career company (Guardian) was the company to buy in my eyes. Even today I think that when cash accumulation is a primary concern, Guardian 10 pay blended with term is a top contender. In fact, you should ask your MM agent to show you a 10 pay illustration.
Prior to becoming independent I developed the opinion that Guardian wasn't the end all be all, but they were still pretty good. Still thing that way.
Some guys are advocated because it's their job to be. If they were handed their walking papers tomorrow at their career company, they'd most likely find someone else for whom to be a cheer-leader. Others fall out of favor with the cheerleader business and head a different route--this is why I decided not to jump on any of the opportunities/offers to join another career carrier when I parted ways with my Guardian career contract.
The other driving force comes from agents who are trying to max the contract they have with a certain company to increase comp/benefits (or simply to please someone with whom they've developed a good relationship). Their judgment may get a little clouded at times, but no one is going to advocate for their companies better than they. And I'd also say that they've convinced themselves that the company for whom they advocate is the best.
So Mass and NML can both lean on their financial ratings, and that's a feather in their cap, so why not use it to their advantage? When I was at Guardian life was awesome in 2008 when they got upgraded twice and increased their dividend interest rate (they were the only life company in the biz to accomplish that) and you'd better believe anyone within ear shot of me heard about it.
But are they really the top?
NML pays more dividends than anyone else, but they also have more policy holders than anyone else (in the mutual world), so they'd look a little foolish if they didn't.
Mass really doesn't have a lot to point to in terms of being the best at it. They are just really solid in a lot of different respects.
Here's what I don't like about either:
PUA load. Both are real losers with respect to this. NML has a 7.5% PUA load. Mass has the same with a contractual provision allowing them to go up to 11% if they want.
NML has a really pricey term rider they put on their WL when they blend it. Mass is cheaper, but not incredibly cheaper.
NML's waiver rider is 2 years own occ.
Neither company has a chronic illness benefit on their accelerated death benefit rider.
NML's loan provision is really bad (I know chuckles disagrees with this, but increasing the dividend interest rate a little bit and still charging you 8% all the time is bad). The IRR on WL given current dividend rates (i.e. given the current interest rate environment) is lucky if it's 5%. This will likely rise over time, but it'll be a long time before it's rivaling 8% (if ever).
So my picks...
I mentioned before I liked Guardian, Penn Mutual, and Ohio National (listed in no particular order).
Guardian's 10 pay is a cash accumulation king. Guardian lowers their interest rate from 8% down to 5% (and 4% on the 10 pay). They are direct recognition, so they too have a problem when it comes to loans, but they have a much better spread than NML. Their PUA load is 5% and fixed at that rate forever. They have a 5 year own occ waiver of premium rider, and the cheapest term blending rider out there (for younger people, it gets a lot more expensive overtime because it's OYT). They have a chronic benefit to their accelerated benefit rider. They also allow a ton of flexibility to their PUA rider, you can adjust it up and down to a minimum of $100/year and maximum of 3x base premium years 1-10 or 1x base premium years 11+, or you can dump in whatever amount is needed to replace all outstanding term death benefit with PUA death benefit if there is outstanding term (this overrules the tied to base premium amount). You can also place PUA's into the policy after it is paid up, so the only cash going in is PUA's (you could do this with Mass as well).
Ohio National has two products that a really nice, Prestige Xcel and Prestige Max. The Xcel product is blend-able. PUA load is fixed at 5%. 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. Waiver is 5 years own-occ. No chronic benefit on the accelerated db rider. They are non-direct recognition, so dividends are not reduced if taking loans--like Mass.
Prestige Max is a MEC limit funded product paid up at age 65. There's no PUA rider on the policy (otherwise it would MEC), but there's no need. It has a preferred loan provision that kick in after the later of age 65 or 20 years. The preferred loan contractually drops the loan interest rate 100 bps below the currently declared loan interest rate for all other policies (helps a lot with distributions).
Penn Mutual has just one WL product, but they can turn it into whatever they want. They have a 6 year own-occ waiver and a chronic benefit to their accelerated db rider. 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). The product is blend-able (but this is their weak spot 4:1 term to WL max blend). They are direct recognition but they eliminate the interest spread on their lent dividend rate after 10 years (they are the only company I'm aware of that does this). They are very strong guaranteed cash performance wise.
So, they all have lower PUA loads and, since over funding sounds to be a crucial part in all this, that's important. They are all flexible. They have as good or better own-occ provisions on the waiver rider (Mass has a 5 year own-occ as well).
Now, on to Blease (aka Full Disclosure). If we're going to compare projected values. Winners for projected IRR are: Ohio National, Penn Mutual, and NML at 4.87%, 4.45%, and 4.31% respectively. This is on a blended policy $1 mill total.
Winners on same policy for guaranteed performance are Mass, Penn, and Guardian at 0.54%, 0.14%, and 0.05% respectively.
Now, for non blended projected winners are: Ohio National, Penn, and Guardian at 5.13%, 5%, and 4.63% respectively.
On the guaranteed side: Penn, Mass, and Guardian at 1.12%, 0.89% and 0.41% respectively.
A word on the blended results. The blended results from Blease are designed to lower premium, not max cash. If these were over-funded results would be much better IRR wise (i.e. they'd beat the non blended polices).
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.
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.
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