Northwestern Mutual Vs Ohio National - Whole Life Insurance

[bsebllsnwbrdng1]

My independant agent (suggesting ONFS) is in her 40s and a VERY close family friend that I really trust and respect.

The NWM agent is in his 20s, same age as me (24 years old). I have met with him 3 times and he seems very knowledgable and trustworthy. He pointed out that my other agent will be retiring 'soon', and he will be around much longer.
Additionally he pointed out that he can sell any product, whereas my other agent cannot sell NWM products.

My independant agent worked for NWM for several years in the late 90s and is confident that the ONFS product will perform as good as the NWM.

My wife is not comfortable with the NWM agent simply because we do not know him as well.

 

[dgoldenz]

Why do you want to buy a whole life policy at 24 years old? Do you have enough term insurance and individual disability insurance already in place?

 

[bsebllsnwbrdng1]

Why do you want to buy a whole life policy at 24 years old? Do you have enough term insurance and individual disability insurance already in place?

I do have a 10 year term policy in place right now with 1M$ of death benefit, and want to have it all converted to WL within 5 years.

I have a 220,000$ mortgage and 65,000$ in student loans. I make just over 100k per year before taxes.

I do have long term disability free through my company that provides 50% of base pay. Both agents have HIGHLY suggested getting additional disability.

 

[Larry Tew]

If you're gonna make this statement, then back it up with some long-term proof, and if you quote "direct recognition" I'm gonna scream, because that does not make one contract better than another on cash value, and is an incredibly oversimplified argument.

Start screaming. Regardless of "Total cash at 65", the terms in which you access the cash value very much matters. I may not get all hung up over direct versus non-direct, but I do look at the "net cost to borrow".

For example, if your product charges 8% AND reduces the dividend but my product charges 5% with NO reduction in dividends, my product costs less to access the cash value OR i can take more income from my plan than from yours.

The total amount of available cash in the plan is somewhat irrelevant unless I plan to take it all.

BTW, I understand that you are a NML agent.
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I would dispute that statement. I compared a Mass LPL65 versus an ON Max Prestige contract. ONFS wanted twice the premium and was no where near twice the CV.

The Prestige Max shines when you look at income stream, not just accumulation. I'm not that familiar with Mass products, but the only plan I saw in the last WL income stream study that was close to Prestige Max was a Penn Mutual product.

 

[BNTRS]

The product is less important than the design.

Why are you getting into this?

If cash value performance is critical, check this out. Follow that design as it'll maximize cash value performance. Both NML and ONL have the ability to blend.

ONL will likely give you a better distribution later, this is an area where NML tends to be weak. Larry made reference to a comparison. Here's the comparison. It was performed by Blease/Full-Disclosure.

 

[LGilmore]

Some of this is "I like vanilla!" " I like chocolate" "Banana Split for me!"

Guys it's all ice cream and it's all good. The original guy is looking at two very good companies. How often is that not the case?

"My fav is Rocky Road."

Before I entered this business I used to sell for Dryers/Edy's and Ben & Jerrys and popsicle brands. Funny thing is I was much thinner then when I sold really good ice cream than I am now selling insurance.. maybe insurance is fattening?

 

[bsebllsnwbrdng1]

Why do you want to buy a whole life policy at 24 years old? Do you have enough term insurance and individual disability insurance already in place?

I currently have a 10 year term policy (convertable) with 1M$ of death benefit and would like convert it all to whole life within 5 years, once my student loans have been paid down a bit.

I have a $235K Mortgage and $65K in student loans. My company provides long term disability which is 50% of base pay. Both of the agents I have spoken with have stressed disability.

 

[bsebllsnwbrdng1]

Both are good companies. Your policy will be very secure with either one.

But the key is the policy differences and what you want to do with the policy.

If your concern is purely DB, then NWM is fine if you like them.

If your concern is Cash Value, then ON has a superior contract hands down.


Compare ON/NWM/NYL/ANICO/MET?

It just depends on what you want your policy to do.

ON and NYL have superior CV oriented contracts out of the five; specifically the prestige max for ON and the Custom Whole Life for NYL.

For DB it most likely comes down the the UW decision.

Frankly I am not sure why either agent did not really show me too many other companies like NYL, MassMutual, or any others...

I assume the NWM agent is paid to sell NWM products and he is convinced that NWM will pay the highest dividends.
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Why do you want to buy a whole life policy at 24 years old? Do you have enough term insurance and individual disability insurance already in place?

I currently have a 10 year term policy (convertable) with 1M$ of death benefit and would like convert it all to whole life within 5 years, once my student loans have been paid down a bit.

I'm married and have a $235K Mortgage and $65K in student loans. My company provides long term disability which is 50% of base pay. Both of the agents I have spoken with have stressed disability.

 

[scagnt83]

Frankly I am not sure why either agent did not really show me too many other companies like NYL, MassMutual, or any others...

I assume the NWM agent is paid to sell NWM products and he is convinced that NWM will pay the highest dividends.
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.

Having been in a similar position as the NWM agent in my past (I was a NYL agent); I can tell you that he profits the most from selling NWM products. Yes he can sell other products, usually if its his first year or two he can only sell noncompeting products. After that he can sell other products.
But selling NWM products helps his expense grid, his credits towards the NWM yearly conference, retirement benefits, etc. It also does not make management happy when you place large cases with other carriers.

That being said; NWM has a good stable product/company with an excellent track record.



The indy agent pushing ON is doing so most likely because ON is popular with indy agents who sell a lot of WL.
The reason ON is popular with indy agents who sell a lot of WL is that they offer an excellent WL contract.

As an indy agent myself, I can sell ON, MM, NYL, Guardian, Met, Anico, SBLI who all have WL products.

Out of all of those I sell ON & MM 99% of the time. I do so because in my opinion they have excellent products when compared to the others. I do like NYLs Custom WL, but NYL has to be over $10k per year in premium.

But ON and MM have the best overall lineup of WL products in my opinion.

I have compared NWM illustrations to others. They are not above and beyond like they claim. Once you start to take the money out ON and MM allow for a greater income to be generated.


But here is the thing. You have said that you trust the indy lady a good bit. You need an agent that you trust. She is more experienced in doing this plus you trust her more. The young agent doesnt know what he doesnt know yet. And you want this policy designed correctly if you are putting a significant amount of money in it.

The argument that she will be retiring soon is asinine. Most successful agents never really retire, they just slow down. If she was 55 or 60 then maybe it would be a more valid argument.

At 24 years old how long has he been an agent? A year? Two max? If he hasnt been in the business for over 3 years then HER chances of being around in 20 or 30 years are much greater than the chances of him being around in 20 or 30 years; and that is a statistical fact!

I think your gut has already told you who to trust... and your wife has too which might be more important


Be sure to make sure the ON agent is max funding the policy. Or using the Prestige Max policy which is already max funded.

 

[bsebllsnwbrdng1]

With regard to direct vs non-direct recognition, I was told that while with non-direct recognition I can take a loan out on my policy, but will still be payed a dividend on the entire amount. I was told that with direct recognition (like NWM) it allows to company to ultimately pay higher dividends.

If that is the case, is there any way of figuring out about how much more a direct recognition company could pay?

Additionally, with a non-direct recognition company, when I take out a loan on my cash value, what is a common interest rate will I typically have to pay out of my own money?
The NWM agent said that with NWM all loans are taken out at an 8% interest rate, then they credit you back 7.5%, so ultimately I am paying 0.5% to take a loan out on my own money. How does this usually work with a non-direct recognition company?