Anyone Run Across Northwestern Mutual?

[indyagent]

I hadn't seen much of NML until I moved to Wisconsin - granted it is their backyard.

Does anyonerun across them very often? I would like to talk about their policies.

It seems that I am running across newer agents; they are using a lot of "vanishing premium" presentations to sell policies.

Specifically, I am working on a situation where a prospect has had an Adjustable Comp Life for 7 years. He had a new NML agent bring him an inforce illustration during an appointment to discuss not paying premiums anymore. A couple of things concerned me as the prospect allowed me to look over the ledger and the notes he had written on them during that meeting:

1. NML agent only provided 1 page of the illustration (the non-guaranteed ledger). Left out the other pages.
2. The premium for the term portion is only guaranteed for 7 years evidently.
3. Ledger clearly states that it assumes a 5.15% dividend rate. Agent told prospect it is currently 6.15%.
4. On the cash value column, prospect wrote that the agent said it is currently growing at 6.15%.

 

[HealthGuy]

Typical NWML smoke and mirrors BS. What's new. Most of their sales force will tell the client anything to sell a policy. NWML = Overpriced crap.

 

[Newby]

I run into their policies quite often.
I don't know what the agents are actually telling people but the people consistantly believe the non-guaranteed info is really guaranteed.
If people want 20 pay life they should be sold 20 pay life. Any agent who tells people their dividends will pay the premium after 20 years should lose his license in my opinion.
I ran into another one yesterday where the son had been sold a million dollar policy by his dad. The son had doubts that it will work the way dad proposed it.
I only had to ask him one question. Do you really think you dad knows anything about insurance or was he following what his North Western Mutual manager wants his to say to exploit his relationship to you?
Son is canceling the policy.
I think he made the right decision.

 

[briko3]

Ditto healthguy.

 

[indyagent]

I agree...it is overpriced crap.

This prospect (was 52 w/ top health rating at issue) did a lump sum payment of $20,000 and pays an annual premium of $1,200 for a $100,000 death benefit. If you do the hard numbers, the cash value growth has been more like 4-4.5%. They seem to like to confuse cash value growth, cash value interest rates, and dividend rates.

But it appears that everyone in WIsconsin thinks very highly of them, perhaps because we are in their backyard. It also seems that the reps spend more time talking about how great NML is than about the policy they are trying to sell.

Does anyone know if a 7 year old policy (on which the illustration says 5.15% dividend) is eligble for the 6.15% dividend that the company announced shortly ago? or is it just for new business?

 

[BNTRS]

Specifically, I am working on a situation where a prospect has had an Adjustable Comp Life for 7 years. He had a new NML agent bring him an inforce illustration during an appointment to discuss not paying premiums anymore. A couple of things concerned me as the prospect allowed me to look over the ledger and the notes he had written on them during that meeting:

Who wrote the notes? If the agent, that's a big no no

I agree...it is overpriced crap.

Oh really, and what do you base this comment off?

Does anyone know if a 7 year old policy (on which the illustration says 5.15% dividend) is eligble for the 6.15% dividend that the company announced shortly ago? or is it just for new business?

Really, you have the authority to proclaim the product over priced crap, but you can't answer this question on your own? Your understanding of whole life insurance is...


I'm not suggesting that the NML agent is correct, but your comments/questions make me believe that you'll do little to make this person better off. Has anyone heard of NML? No who are they?

 

[indyagent]

I came here to learn some technical information from someone knowledgeable about these products...not to be prodded into arguments. You sir, will have to look elsewhere to be fulfilled and I will continue looking for some who knows what they are talking about.

I will engage you for a moment. I have no "authority" to proclaim anything...myself and several others were expressing an "opinion." Welcome to the internet.

I am afraid I am not familiar with Northwestern's new buisness practices as I do not work for them. I suspect that we will find most people on this forum are in the same boat.

If you put $20,000 cash into a $100,000 policy the amount of actual "insurance" left is $80,000. For a 52 year old preferred plus health rating male, $800 for term and $370 for a miniscule amount of whole life totaling this is A LOT to pay.

 

[dgoldenz]

I came here to learn some technical information from someone knowledgeable about these products...not to be prodded into arguments. You sir, will have to look elsewhere to be fulfilled and I will continue looking for some who knows what they are talking about.

I will engage you for a moment. I have no "authority" to proclaim anything...myself and several others were expressing an "opinion." Welcome to the internet.

I am afraid I am not familiar with Northwestern's new buisness practices as I do not work for them. I suspect that we will find most people on this forum are in the same boat.

If you put $20,000 cash into a $100,000 policy the amount of actual "insurance" left is $80,000. For a 52 year old preferred plus health rating male, $800 for term and $370 for a miniscule amount of whole life totaling this is A LOT to pay.

A 52 y.o. male at P+ could have bought a paid-up $100k UL from Aviva for $14,650, had $5k left over ,and not owed any more premiums. With this example, his premium "vanished" on day one because he has nothing further to pay, GUARANTEED. Could have bought an extra $300k for 30 years with that extra $1200/year he's spending. Maybe you should let him know about that option.

 

[indyagent]

Thanks dgoldenz. I agree Aviva has some powerful things to show prospects. Check this out - if he 1035'd the cash value of the NML policy to Aviva, even though he is now 7 years older, he could increase his death benefit from $100,000 to $150,000. And thats guaranteed to not require any additional premiums.

 

[scagnt83]

Heres the thing about your situation; you need more facts about the case and as BNTRS pointed out you need greater knowledge about the product your dealing with.

You need to know why your prospect bought the ACL WL. What was he trying to accomplish by this? What are his concerns about his future and how did the ACL WL provide a solution to them?
Is his only concern a guaranteed DB? Is the tax free CV accumulation an important feature? Is this his only life insurance policy? What is his need as far as DB?... is it a permanent need? What tax bracket is he in? What is the current CV? What riders are on the policy? How far under MEC is the current policy?

All of this and more need to be answered before you can even begin to decide if he is in the right product or not.

The ACL WL is a cash value oriented WL product. Its best suited for someone who has a need for a permanent DB, but also has a need for tax free cash accumulation. When designing this product its usually not about how much DB can we buy, its more about how much money can we stash away without the policy becoming a MEC.

Also, the ACL is a hybrid product. It is not a totally traditional WL. You need to understand this product in and out before you can knowledgeably advise a client on it. Its structured as a term/WL combo that converts the term into permanent through premium payments and dividends.
4.5% is a pretty strong rate of return considering that its tax free. It sounds like this policy is performing well so far. Plus its already 7 years in; now you have a greater COI to worry about with whatever product you are looking at, even exchanging him into another CV oriented product would be potentially sketchy.
NWM has a long history of paying some of the highest dividends in the industry, their WL products are nothing to turn your nose up at, especially the ACL...

When a company declares a dividend it varies from WL product to WL product.
Often the contract will state a percentage of the declared dividend that the policy will receive. If the ACL isnt 100% of the declared dividend, im sure its close.
But heres the problem: you didnt know that; which means that your product knowledge of WL in general is lacking, which is what BNTRS was pointing out.
It will probably help you to consult with a more experienced agent on this case...


I will also agree that the NWM agent probably didnt do the best job with the inforce illustration. It sounds like the client wrote on the illustration, but showing just the current is piss poor imo. Not that the guaranteed illustration will be bad to look at... it should be a strong illustration as well, and it should have been shown.

Again, be careful 1035 exchanging this policy until you know tons for about the situation