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Reply to Reputable? Whole Life with Northwestern Mutual...     
Old 11-13-2009, 11:21 AM   #1
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Reputable? Whole Life with Northwestern Mutual... Reputable? Whole Life with Northwestern Mutual...
Hi everyone. I am about to open a whole life policy with Northwestern MutualI think the interest is around 6.-something.

Are all whole life companies going to be about the same return?

my plan is to over-fund the acct.

So is this place as good as any other?

thanks much

mx

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Last edited by STIBROKER; 02-24-2012 at 05:43 PM.
  Reply With Quote to Reputable? Whole Life with Northwestern Mutual...

Old 11-13-2009, 11:24 AM   #2
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Reputable? Whole Life with Northwestern Mutual... Re: Reputable? Whole Life with Northwestern Mutual...
Good company, expensive products (overpriced if you ask me, but so is all whole life....). Just my opinion, but insurance is for death protection, not for investments. Dividends are not guaranteed.

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Last edited by dgoldenz; 11-13-2009 at 11:39 AM.
  Reply With Quote to Reputable? Whole Life with Northwestern Mutual...
Old 11-13-2009, 11:34 AM   #3
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Reputable? Whole Life with Northwestern Mutual... Re: Reputable? Whole Life with Northwestern Mutual...
I would secure a quote from MML, NYL, and Guardian, and make a decision from there.

If you send me the quote you have, I can make an apples to apples with the NML.

Sometimes NML is better based on your age and health. MML has the highest dividend payout last I looked.

brad @ brookfieldpartners.com
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Old 11-13-2009, 12:03 PM   #4
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xrac on Reputable? Whole Life with Northwestern Mutual... - Insurance Forum
 
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If you are trying to use this WL as a savings tool I would recommend that you chose a company that is non-direct recognition. NWML is direct recognition.

Direct recognition means the company takes the loan balance into account when determining the dividend, thus you only get dividends on the remaining cash value.

Non-direct recognition means the company ignores the loan balance when determining the dividend, therefore you are receiving dividends on the borrowed amount, plus the remaining amount.

Thus, all things being equal, a company using non-direct recognition is better when a loan is outstanding. Now, it is possible that a direct recognition company may offer a higher dividend rate that offsets the dividends lost due to the policy loan.
I believe that Mass Mutual, NYL, and Ohio National are all mutual non-direct recognition companies. Guardian and NWML are direct recognition.

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Last edited by xrac; 11-13-2009 at 12:10 PM.
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Old 11-13-2009, 12:13 PM   #5
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Good company, good products. Whether over funding makes sense depends on your situation which none us on here know, I'm sure you talked about this with your agent.

I think the interest is around 6.-something.


Be careful with this, it is the one thing I wish NML agents would avoid mentioning as it is highly misleading. They probably talked about the "dividiend rate" the company gives out, my guess is that is the 6% "interest" number you got.

Make sure you understand this, this absolutely does not mean you get a 6% return on your cash value in the policy because the company declared a 6% dividiend. In fact, the dividiend rate has virtually zero meaning to you as a policy holder as far projecting the return in your policy. I've run across many NML agents who lead consumers to believe this is the return they get in their policy.

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  Reply With Quote to Reputable? Whole Life with Northwestern Mutual...
Old 11-13-2009, 12:17 PM   #6
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Originally Posted by Full Throttle View Post
Be careful with this, it is the one thing I wish NML agents would avoid mentioning as it is highly misleading. They probably talked about the "dividiend rate" the company gives out, my guess is that is the 6% "interest" number you got.

Make sure you understand this, this absolutely does not mean you get a 6% return on your cash value in the policy because the company declared a 6% dividiend. In fact, the dividiend rate has virtually zero meaning to you as a policy holder as far projecting the return in your policy. I've run across many NML agents who lead consumers to believe this is the return they get in their policy.
x2

If I charge you $2000 and give you $100 back, is that better than charging you $3000 and giving you $180 back? One gives me 5%, the other gives me 6%....just something to think about.

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  Reply With Quote to Reputable? Whole Life with Northwestern Mutual...
Old 11-13-2009, 12:18 PM   #7
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I would secure a quote from MML, NYL, and Guardian, and make a decision from there.

If you send me the quote you have, I can make an apples to apples with the NML.

Sometimes NML is better based on your age and health. MML has the highest dividend payout last I looked.
How can you possibly do this on whole life coverage? Compare the premiums on a whole life policy by the same death benefit? That would be highly misleading. Compare illustrations? Also very misleading. The illustrations are all but guaranteed to be wrong.

I don't work for NML, never have. In fact, I like Ohio National and Mass Mutual, but NML is a top tier carrier as well. You will never know which one was best except in retrospect. I would say going with any of those three companies for your whole life is a good option. If you have determined whole life is the best fit for your situation, I would take the NML policy.

------------------------------------
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  Reply With Quote to Reputable? Whole Life with Northwestern Mutual...
Old 11-13-2009, 12:25 PM   #8
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NWM is a strong solid company. There are several companies that are just as strong and solid. I think it's a matter of as just as good a place to be rather than better. While I think there are quite a few that are just as good, I don't think any one particular company is "better" than the others.

It may come down to features or options as some have suggested, that is worth looking into. It will either confirm your decision or expose you to a few other companies.

There's a lot of good products out there and good companies. The life insurance industry weathered the financial storm better than many other industries. What used to be criticised in an up market is no longer considered a "bad idea" by the gurus who had everybody leaning towards the market. Pretty quiet right now. After this market collapse is a memmory the gurus will return hoping everyone has a short memmory.

Good luck and communicate with your agent about your concerns. I know I would appreicate it. Give him a chance to answer your questions and concerns.
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Old 11-13-2009, 12:38 PM   #9
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Reputable? Whole Life with Northwestern Mutual... Re: Reputable? Whole Life with Northwestern Mutual...
Originally Posted by mx_599 View Post
Hi everyone. I am about to open a whole life policy with Northwestern Mutual Life Insurance Company.
They are a good company. If you die while the policy is in force, they'll pay the death benefit (just like all insurance companies).

Originally Posted by mx_599 View Post
I think the interest is around 6.-something.


Read Full Throttle's post. He's spot on. Ask your agent when you'll see the 6% return in the illustion (er, I mean illustration). The first couple of years have almost ZERO return. Even if you are putting in additional PUA (Paid up additions) in the policy to accelerate the dividends, divide the projected dividend into your TOTAL PREMIUMS and determine what you're illustrated to get. (Hint: It's lower than 6% - particularly for the first 10 years you own the policy.)

Insurance never is and never was an INVESTMENT. It is a great SAVINGS vehicle. Investments and savings are two similar words. But similar words and the right words are the same difference between lightning and the lightning bug.

Originally Posted by mx_599 View Post
Are all whole life companies going to be about the same return?


Nope. Too many variables. Each company's investment experience, cash flow, the length of time your policy is in force, age, premiums, underwriting classifications all factor in how much your dividend may be. (Dividends aren't guaranteed to be declared every single year regardless of past performance for the past 100+ years either.)

Originally Posted by mx_599 View Post
my plan is to over-fund the acct.


Why? What is your strategy for doing so? How do you intend to benefit from this strategy?

I'm NOT saying that this is bad. But if you're going to put a lot of money into whole life, you need to know WHY you are doing it. If you DON'T know why, (or it's just because the agent tells you to) then you'll lapse the policy and risk having NOTHING to show for what you DID pay for it.

If you don't know EXACTLY how it benefits you (and I'm not talking about projected cash values as those are illusions and are guaranteed to be higher OR lower than projected) then don't buy the policy.

Originally Posted by mx_599 View Post
So is this place as good as any other?
Originally Posted by mx_599 View Post

thanks much

mx
Companies don't matter as much as the service and the insurance advice from your agent.
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Originally Posted by xrac View Post
If you are trying to use this WL as a savings tool I would recommend that you chose a company that is non-direct recognition. NWML is direct recognition.



I believe that Mass Mutual, NYL, and Ohio National are all mutual non-direct recognition companies. Guardian and NWML are direct recognition.
No one knows what you're talking about.

Direct or Non-direct recognition is all about how any outstanding loans are treated when the company declares a dividend.

A direct recognition company will deduct the amount of the outstanding loan against the cash values to determine the size of the dividend you may receive.

$100k cash values - $50k loan = $50,000 basis for your dividend.

A non-direct recognition company will NOT incorporate your outstanding loan in determining your policy dividend.

$100k cash value with a $50k loan = $100,000 basis for your dividend.


This is good so you can use your money in multiple areas to have it work for you.

Just remember that if you pass away while there is an outstanding loan against the policy, that it will be repaid out of your death benefit. Your beneficiaries will receive the remaining balance of that benefit.

I hope I made that more clear as to why non-direct may be more preferable to direct.

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Last edited by DHK; 11-13-2009 at 12:48 PM. Reason: Posts merged
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Old 11-13-2009, 01:30 PM   #10
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Reputable? Whole Life with Northwestern Mutual... Re: Reputable? Whole Life with Northwestern Mutual...
Originally Posted by mx_599 View Post
Hi everyone. I am about to open a whole life policy with Northwestern Mutual Life Insurance Company.

I think the interest is around 6.-something.

Are all whole life companies going to be about the same return?

my plan is to over-fund the acct.

So is this place as good as any other?

thanks much

mx
Northwestern is a good company, they definitely have great financials. However, their premiums are a little high and they have a steep load fee on their paid up additions (the mechanism used to overfund the policy)

And important metric that often goes overlooked is the surrender cost index. Northwestern and Guardian have consistently had the lowest costs index in the industry.

Guardian has an amazing product that I think you should take a look at. If you really like your agent at Northwestern you should talk to him about this. Northwestern is proprietary and won't let other non NMFN agents sell their products, but they are not a captive company so their agents can sell other company's products.

Whole Life insurance is a great foundational piece to a financial plan. Unfortunately a lot of people fail to understand how it works.

I'd be happy to answer additional questions

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Last edited by BNTRS; 05-02-2013 at 10:39 AM.
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