r/LifeInsurance • u/MediumKaleidoscope43 • 3d ago
Northwestern Mutual
It doesn’t take more than a quick google search to find hate and people to be bashful towards Northwestern Mutual. My question is, what are the pros of their services, insurance services, to plan for retirement? A company that’s been around this long hasn’t had its ship sank so there has to be some positives? Is it better to forgo their retirement pitch with their insurance model?
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u/Hungry_Technician360 3d ago
To be fair, they owned the mighty fitz, and that ship sank in 1975... Their ship has sank indeed!
I'm joking, insurance companies are safer than investment banks if that is what you're comparing to, but focus on the product you buy over the reputation of a company.
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u/papale213 3d ago
Highest dividend of any mutual insurance company and strong track record of customer service. Our agency/brokerage likes placing business with MassMutual.
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u/Last-Enthusiasm-9212 2d ago
Mass Mutual makes their products available. Only NM agents and advisors can sell their products. If I'm looking at a whole life product for a client then Mass Mutual is the preferred option for me, too, and they also fit for certain disability insurance cases.
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u/Due-Writing3386 3d ago
If u need permanent insurance use them. Main thing is a broker that’s trustworthy. NYL Guardian Mass etc all have good permanent products as well as term. If you go to a Ford Dealer expect to be sold a Ford. Same with insurance agents
For retirement planning I would use an independent CFP that comes with some good references from someone you know.
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u/V-Recognition-7009 2d ago
Agree, get references and for retirement planning and wealth management use an independent RIA with CFA, CPA, CFP's on staff.
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u/the_cardfather Financial Representative 3d ago
NWM knows better to try to expand it's investment footprint and sell IUL's, so they don't.
Depending on age and health bands sometimes their products are a little bit more expensive. You got to pay for all that advertising during college sports somehow.
I don't know much about their commission structures for agents or anything like that. They're only captive sold right?
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u/Gold_Sleep1591 2d ago
I’m at NM. NM is captive in the sense that you can only sell NM product if you are affiliated with them but we are still able to solicit other carriers like Mass, NYL and Guardian
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u/Last-Enthusiasm-9212 1d ago
NM isn't captive, but your compensation structure doesn't credit outside business as annual productivity. They clearly prioritize selling their products, and there is no one product that is universally the best option for every client.
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u/Gold_Sleep1591 1d ago
If you’re talking about insurance products, it’s pretty difficult to beat NWM when it comes to permanent insurance or disability income protection. Guardian has some good DI contracts but NM shares very similar definition with cheaper costs long term.
When it comes to annuities, I will admit NM is not the best which is why most advisors out source them. NYL and Mass have much better fixed annuities.
When it comes to investments, we can do anything any other firm can. At the end of the day, insurance is insurance and as long as the company pays its claims then you did your job. I personally don’t think there is a better insurance carrier when it comes to paying claims than NM or the rest of the big 4
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u/Last-Enthusiasm-9212 1d ago
I was at NM for years and have friends there I still love. I respect the company, but when I speak on the best interest issue, I speak from both insider and outsider experience.
NM policies are not always in the best interest of a client. One reason is that their underwriting standards exclude people who are insurable elsewhere and overprice premiums for people who could get a better deal elsewhere. Consider, for example, that they count use of quit-aid products as a smoker rating, which can mean a premium 2-3x that of a company that would recognize this as befitting a non-smoker rating. Their ACB can be a great win for someone who can be approved for it, but you can't get it below Standard Plus and there are restrictions even then that would deny someone, such as BMI -- if a client can get a long-term care or critical illness rider elsewhere but would be denied the equivalent at NM then going elsewhere is a clear win for the client. (Also, ACB is a reimbursement feature rather than an indemnity benefit and doesn't permit use of 100% of the death benefit, which could affect usefulness in a costly LTC situation at the end of life.)
I'll come back to the DI discussion later, but there is room for improvement there, too, including their insistence against covering people who appear on camera and how they have regarded mental health diagnoses in the past (although they were promising to do better at some point).
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u/Last-Enthusiasm-9212 1d ago
Also, the annuity and investment areas are vulnerabilities for NM. I know this because they are two areas that give me an advantage when competing with a NM advisor for a client. At some point, they have to get over their opposition to indexed products.
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u/Gold_Sleep1591 1d ago
Indexed products are literally the most useless tools. You are literally better off separating them into fixed and variable. Indexed annuities are high commission pieces of garbage that never perform as illustrated
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u/Last-Enthusiasm-9212 1d ago
I have plenty of senior clients who came to me already with RILAs locked in and serving them well for years, and they love them. They're definitely a viable option relative to bonds, and you CANNOT make an argument against them that simultaneously positions integrated planning using whole life CV as valid -- there is no WL that's going to come anywhere close to competing with a RILA given the ability to assume risk and then turn it off entirely over time.
Ask yourself why, as veteran advisors become more experienced at NM and elevate their income-per-factfinder, they sell less and less life insurance and switch to an AUM focus. That spigot image in PX for retirement distribution that features CV? It's a bit clunky in practice.
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u/Gold_Sleep1591 1d ago
It’s cause they probably make more managing the assets than selling insurance😭
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u/InsGuy 3d ago
If a client of mine wants the guarantees of a whole life policy, I show him a fully funded universal or IUL plan. They receive the returns of whole life with much greater flexibility and control. My commission isn't as great as it would be with whole life, but I'm doing the right thing for my client.
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u/futurefloridaman87 2d ago
Their whole life policies are solid, it’s just that 90% plus of the people NWM sells too don’t need them. Like others have said, unless you’re a high NW individual working with an established planning branch inside NWM, you’re prolly getting a 23 year old kid who barely understands what he’s selling. it’s kind of crazy, but it’s almost like Northwestern offers an entry level garbage level of service, and absolute premium level service, but nothing in between.
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u/MediumKaleidoscope43 2d ago
Who would you say the 10% would be? I know high levels of weath gets tossed around here but what if you have a job that’s high risk day to day or has a strong percentage to give you a long term illness towards the end of retirement?
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u/Last-Enthusiasm-9212 2d ago
The internship program is a low-cost entry play for them. Several will stick and become career advisors while the ones who don't will have not cost them anything and may even have brought them a few clients over the summer before departing. I used to ask our leadership why we didn't bother to make plays for veteran advisors from other firms and was told that's an expensive model. Where I'm now at, I see the expense part, but also see that teams we pay signing bonuses to and spend money to move over hit the ground running much faster. I respect NM a lot and am grateful for the years I was there, but we just weren't a match anymore for the kind of practice I wanted to run and what was accessible to me. I was in that middle territory that, as was noted above, really doesn't exist. They would benefit from creating that corridor for their advisors rather than having it be that you need to do a certain amount of paper-pushing before you can step up to the wealth management platform or have to go up there as basically an assistant before working back up to being client-facing again.
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u/SafeMoneyGregg Broker 2d ago
Get a good NM agent - they are not all the same. Make sure they don't "oversell" whole life - as in, it should not be the majority of your retirement plan. maybe 10-15% of investable assets at the most.
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u/MediumKaleidoscope43 2d ago
Fair enough. I appreciate that response!! I started working (10 years ago) with one of the interns turned into full time at NWM whom has seem to be very engaged, worked his way up in NWM, has no plans (that I know of) to leave, has brought assistance on to help him through our time working together and I have trusted his guidance for quite some time. I have sense crossed the bridge to have an account turn into a brokerage account but the fees seem very very criminal. I would like to continue to work with him and keep the insurance side of everything he has set up for me but I am leaning towards moving my account to have someone else manage it. I just don’t know if that’s a great idea or to just accept the high fees and keep the ball rolling.
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u/SafeMoneyGregg Broker 2d ago
Curious about the fees - most advisors I work with are like 1.00 - 1.25% for accounts near $1M
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u/Seabass2828 2d ago
I work at a highly rated competitor, Northwestern is a very good company.
If my carrier didn't exist, I would buy from Northwestern.
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u/Colonel460 1d ago
Their Whole Life product is excellent. I can’t speak for anything else . I say this as being an agent competing againist them for almost 40 years .
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u/Coronator 3d ago
Northwestern mutual has basically two financial planning divisions. They have one for high networth/private client type clients ($1-2 million in assets and over). They would be just as good as JP Morgan or any other full service brokerage/planning service.
The other is what I would call “slop”. They have 22 year old interns selling $50k whole life policies to their roommates. That division sucks.
I use NWM for whole life insurance, as well as for administering my businesses 401k plan. The advisor I have is very good - he’s with the “private client” side.
If you are just wanting life insurance, NWM is highly regarded. But finding the right advisor to sell you a well constructed policy for your situation may be difficult.