Northwestern Mutual boasts a long history of paying dividends to policyholders while providing multiple options for long-term care insurance.
According to the American Association for Long-Term Care Insurance (AALTCI), Northwestern Mutual is one of the largest providers of new long-term care insurance policies in the U.S.
Here, we take a closer look at the company's long-term care products, including:
Let's dig in.
Northwestern Mutual LTC pros & cons
Pros
- A mutual insurance company owned by policy owners, who can earn dividends from the firm.
- Founded in 1857, the company has paid a dividend every year since 1872.
- Offers a standalone LTC policy, a hybrid life insurance and LTC policy, and a whole life insurance policy with a long-term care rider.
- The company’s underwriting tends to be more liberal compared to other long-term care insurance companies, according to AALTCI.
- The company has never requested a rate increase on any of its in-force long-term care insurance policyholders.
- Policyholders are allowed to upgrade their policies if new features become available.
Cons
- There is no online quote feature to help those interested get an estimate on what LTC coverage might cost.
- You must work with a licensed agent/insurance professional to get a quote and apply for coverage.
- Only two choices for a benefit period on its standalone policy.
- No preferred health discounts are offered.
- Several third-party reviewers report that Northwestern Mutual has among the highest premiums among LTC insurance carriers.
Northwestern Mutual LTC options
Northwestern Mutual offers two long-term care insurance products to choose from.
QuietCare
This standalone long-term care insurance policy was introduced in 1998.
The policy pays benefits on a monthly basis, and you can choose anywhere from $1,500 a month to $12,000 a month in benefits, in $100 increments.
According to AALTCI, a 57-year male or female applying for a $162,000 benefit with no inflation growth can expect to pay about $1,300 a year for coverage. A married couple age 60 to 61 would pay about $2,225 for the same coverage.
Northwestern Mutual offers an advantage to couples, as the cost of buying two policies provides a discount of up to 30 percent when compared with the standard cost of two separate policies.
There are two benefit period options: 3 years and 6 years. The amount of monthly benefit you choose multiplied by the benefit period is your total benefit amount, So, if you choose a monthly benefit of $2000 and a three-year benefit period, your total benefit amount is $72,000.
You can choose an elimination period of six weeks, 12 weeks, 25 weeks, or 52 weeks.
You can choose an inflation option that increases benefits, which include 3 percent, 4 percent, and 5 percent compounded, or a guaranteed purchase option.
Available riders include a waiver of premium, survivorship benefit, and return of premium.
There are no shared spousal benefits, however, which is a downside of this policy as this is a common feature of competitor offerings.
Long-Term Advantage
This hybrid life insurance and long-term care insurance policy was launched in September 2022. It features a variety of key benefits, including:
- Six years of guaranteed coverage for qualified long-term care expenses, plus the potential for up to 10 years of total coverage.
- A guaranteed death benefit if you do not need long-term care or need only a limited amount of care. The death benefit may even increase over time through dividends paid by the company to policyholders.
You can pay for this policy with one payment or a stream of 10 or 15 annual payments. You can also make one large payment combined with a stream of smaller installment payments.
Northwestern also offers a Whole Life policy with an Accelerated Care Benefit, which is essentially a long-term care rider.
To be eligible for long-term care benefits on a Northwestern Mutual policy, you must have a 90 consecutive day need for long-term care services requiring either hands-on or stand-by assistance with at least 2 of 6 Activities of Daily Living (eating, toileting, transferring, bathing, dressing or continence) or substantial supervision to protect your health and safety due to severe cognitive impairment.
You can start the claims process on the company’s website.
About Northwestern Mutual
Northwestern Mutual was founded in 1857 above a dry goods store in Janesville, Wisconsin. Today, it is headquartered in Milwaukee.
The company has about 5 million customers and offers life, disability income, and long-term care insurance, as well as annuities and brokerage and advisory services.
As a mutual insurance company, Northwestern Mutual is owned by policyholders, not shareholders. A portion of the company’s earnings is paid out in annual dividends to eligible policyholders.
Northwestern Mutual touts the size of its dividend payout as being larger than its two closest competitors combined. In addition, a dividend to policyholders has been paid every year since 1872. In 2021, Northwestern Mutual declared a company-record dividend of $6.5 billion. It expects to increase that to $6.8 billion in 2023.
Northwestern Mutual ranked 97 on the 2022 FORTUNE 500 and was recognized by the publication as one of the "World's Most Admired" life insurance companies in 2022.
Northwestern’s CEO is John Schlifske, who joined the company in 1987 as an investment specialist. He moved from portfolio manager to senior executive overseeing a variety of the company’s investment operations. He later headed different parts of the company’s business operations.
Northwestern Mutual is rated the second-best long-term care insurance carrier for financial stability by Money.com, behind New York Life.
It also has the highest financial strength ratings currently awarded to any U.S. life insurer from three of the major credit rating agencies:
- A.M. Best (A++) Highest
- Fitch (Aaa) Highest
- Moody's Investors Service (Aaa) Highest
- Standard & Poor's (AA+) Second highest
By adding a hybrid policy in 2022, Northwestern Mutual has positioned itself to compete in today’s long-term care insurance market while maintaining a strong tradition of financial strength and stability and continuing to offer a solid standalone product.
The information and content provided herein is for educational purposes only, and should not be considered legal, tax, investment, or financial advice, recommendation, or endorsement. Breeze does not guarantee the accuracy, completeness, reliability or usefulness of any testimonials, opinions, advice, product or service offers, or other information provided here by third parties. Individuals are encouraged to seek advice from their own tax or legal counsel.
