Northwestern Mutual's Level Term Insurance Option: A Comprehensive Overview

Northwestern Mutual offers level term life insurance, which provides coverage for a set number of years (e.g. 10 or 20 years) while keeping the premium payments the same throughout the policy. This type of insurance can help protect your loved ones financially for a specified period, ensuring they receive a death benefit during the years you plan to support them. Northwestern Mutual's level term life insurance includes the option of a Waiver of Premium rider, which allows you to stop paying premiums if you become disabled. Additionally, you can convert your term insurance into a permanent policy, which offers lifelong coverage and builds cash value.

Level term life insurance

Northwestern Mutual offers level term life insurance as one of its term life insurance options. Their Level Term 10 and Level Term 20 policies provide coverage for 10 and 20 years, respectively, with level premiums throughout the term. The company also offers annually renewable term life insurance, which has lower initial costs but increasing premiums each year.

When considering level term life insurance, it is important to shop around and compare different insurers' offerings. Factors such as age, health status, and the insurance company's financial stability should be taken into account when choosing a policy. Additionally, the ability to customize the policy with riders, such as a term conversion rider or a waiver of premium rider, may be an important consideration for some individuals.

Permanent life insurance

The two primary types of permanent life insurance are whole life and universal life. The cash value of whole life insurance grows at a guaranteed rate, whereas universal life insurance features more flexible premium options and its earnings are based on market interest rates.

Variable universal life and variable life are also types of permanent life insurance. Variable universal life combines the flexibility of universal life with the option to invest the cash value in mutual funds and other financial instruments. Variable life is similar but is considered riskier because the cash value is directly invested in the stock market and can lose value.

Whole life insurance

Northwestern Mutual offers whole life insurance policies with a minimum death benefit of $50,000. Their whole life products include Whole Life One, which is offered to buyers up to 85 years old, and Whole Life Plus, which allows for more customization. Whole Life Plus is available to buyers up to 85 years old and allows for the addition of term life insurance to increase the death benefit at a lower cost.

Universal life insurance

Northwestern Mutual's Universal Life Insurance

Northwestern Mutual offers Custom Universal Life and Survivorship Universal Life policies. Custom Universal Life has flexibility in how much you pay for your premium and when you pay it. You may also use the cash value to help pay your premiums as long as you have enough invested in the policy. The death benefit is also flexible, and you can keep it level or increase it within limits.

The Survivorship Universal Life policy is similar to Custom Universal Life but provides coverage for two people and only pays out the death benefit when both insureds have died.

Northwestern Mutual also offers variable universal life insurance, which features the flexibility of regular universal life, with the added option to choose how your cash value is invested. There are 40 investment funds available.

Variable universal life insurance

• Enhanced growth potential: The ability to invest in a variety of high-quality investment options means there is the potential to earn a higher-than-average rate on the cash value accumulation.
• Supplemental retirement income: Variable universal life insurance can provide additional savings for retirement, especially if you have already maxed out your qualified retirement funds.
• Tax advantages: Like all life insurance products, variable universal life insurance offers tax advantages, including a tax-free death benefit and tax-deferred cash value growth.
• Policy customization: Variable universal life policies can be customized with optional features, such as the Long-term Care Rider, to meet your specific needs.

However, there are also some drawbacks and risks associated with variable universal life insurance:

• Risk of losing principal: The cash value of a variable universal life policy is directly invested in the stock market, so there is a possibility of losing money if the market underperforms.
• Higher fees: Variable universal life insurance tends to have higher fees compared to other types of life insurance due to the investment component.
• Complexity: Variable universal life insurance is more complex than other types of life insurance because of the investment choices involved. Policyholders need to actively manage their investment allocations, which can be a challenging and time-consuming task.
• Potential for better returns elsewhere: While variable universal life insurance offers the potential for higher returns, there may be better investment opportunities elsewhere, such as tax-advantaged retirement savings vehicles like a 401(k) or IRA.

Frequently asked questions