Northwestern Mutual is a mutual insurance company that sells life insurance, disability insurance, and investment products
Northwestern Mutual is a privately held insurance company based in Milwaukee, Wisconsin. Unlike stock insurance companies owned by shareholders, Northwestern Mutual is owned by its policyholders — meaning profits can be returned to customers as dividends. The company has been in business since 1857 and sells life insurance policies, disability income insurance, and annuities through a network of financial advisors.
When you buy a life insurance policy from Northwestern Mutual, you pay premiums (regular payments) to the company. If you die while the policy is active, Northwestern Mutual pays a death benefit to the people you name as beneficiaries. Some of their policies also build cash value over time, which you can borrow against or withdraw during your lifetime.
Northwestern Mutual does not sell insurance directly online. You work with a financial advisor who is employed by or contracted with the company. This means you cannot get a quote or buy a policy without speaking to someone first.
Key Takeaways
- Northwestern Mutual is a mutual company owned by policyholders, and it returns profits as dividends to customers who hold certain policy types.
- The company sells whole life insurance, universal life insurance, and term life insurance, each with different costs and features.
- All sales go through a financial advisor; you cannot purchase a policy online or over the phone without an agent.
- Policies that build cash value allow you to borrow money against the policy or withdraw funds before death.
- Northwestern Mutual also sells disability income insurance and annuities alongside life insurance products.
The types of life insurance Northwestern Mutual offers
Northwestern Mutual sells three main categories of life insurance: whole life, universal life, and term life. Each type works differently and costs different amounts.
Whole life insurance is permanent coverage that lasts your entire life as long as you pay premiums. The premium amount stays the same every year. Part of your premium goes toward the death benefit, and part goes into a cash value account that grows over time. You can borrow against this cash value or withdraw it, though doing so reduces the death benefit paid to your beneficiaries. Whole life premiums are higher than term life premiums because the company is guaranteeing coverage for your entire life and building cash value.
Universal life insurance is also permanent, but the premiums and death benefit can change. You pay a base premium, and the company deducts charges for insurance and administration from your cash value account. If your cash value grows enough, you may be able to skip premium payments for a period. Universal life premiums are typically lower than whole life but higher than term life.
Term life insurance covers you for a set number of years — commonly 10, 20, or 30 years. If you die during the term, your beneficiaries receive the death benefit. If the term ends and you are still alive, the coverage stops. Term life has no cash value and the lowest premiums of the three types. Northwestern Mutual offers term life, though the company is known primarily for whole life products.
How premiums and dividends work at Northwestern Mutual
When you buy a policy from Northwestern Mutual, you agree to pay a premium at regular intervals — usually monthly or annually. The amount depends on your age, health, the type of policy, and the death benefit amount you choose. Younger and healthier people pay lower premiums than older people or those with health conditions.
Because Northwestern Mutual is a mutual company, policyholders who own whole life or certain universal life policies may receive dividends. A dividend is a share of the company's profits. The company declares dividends annually, and the amount varies based on how well the company performed that year. Dividends are not may provide — the company can choose to reduce or skip them in any year.
You can use dividends in several ways: you can take them as cash, use them to reduce your next premium payment, buy additional paid-up insurance, or leave them in the policy to earn interest. Many policyholders use dividends to offset the cost of their premiums over time.
How to get a quote and work with a Northwestern Mutual advisor
To explore Northwestern Mutual products, you contact a financial advisor. You can find advisors through the company's website or ask for a referral. When you meet with an advisor — either in person or by phone — they will ask about your age, health, income, and how much death benefit you think you need.
The advisor will then provide illustrations showing what your policy might cost and how the cash value could grow over time. These illustrations are based on assumptions about interest rates and company performance, so actual results may differ. The advisor will explain the different policy options and help you choose one that fits your budget and goals.
Once you decide to move forward, you complete an process. Northwestern Mutual will order a medical report (which may include a physical exam or blood work depending on the death benefit amount). Underwriting typically takes two to four weeks. If approved, your policy becomes active on the date you and the company both sign it.
Cash value and borrowing against your policy
Whole life and some universal life policies build cash value — money that accumulates inside the policy and belongs to you. The cash value grows tax-deferred, meaning you do not pay income tax on the growth as long as the money stays in the policy.
You can borrow against your cash value while you are alive. Northwestern Mutual charges interest on the loan, and the interest rate is set in your policy. If you borrow money and do not repay it before you die, the loan amount is subtracted from the death benefit your beneficiaries receive. You can also withdraw cash value directly, though withdrawals above what you have paid in premiums may trigger income tax.
If you surrender the policy (cancel it), you receive the cash value minus any outstanding loans and surrender charges. Surrender charges are fees the company deducts if you cancel within the first several years — they typically decrease over time and disappear after 10 to 15 years, depending on the policy.
Other products Northwestern Mutual sells
Beyond life insurance, Northwestern Mutual offers disability income insurance, which replaces a portion of your income if you become unable to work due to illness or injury. This coverage typically pays a monthly benefit until you return to work, reach retirement age, or the benefit period ends — depending on the policy you choose.
The company also sells annuities, which are contracts where you give Northwestern Mutual a lump sum of money (or make payments over time) and the company pays you income for a set period or for life. Annuities are often used for retirement income planning.
Northwestern Mutual also manages investment accounts and retirement plans, though these are typically discussed with your financial advisor as part of a broader financial plan.
Comparing Northwestern Mutual to other life insurance companies
Northwestern Mutual is one of many companies that sell life insurance. Other major mutual companies include Massachusetts Financial Services Company (MFS) and New York Life. Stock-based companies like State Farm, Prudential, and MetLife also sell life insurance.
The main difference with Northwestern Mutual is that it is mutual-owned, so policyholders can receive dividends. However, this does not automatically mean lower costs — you should compare quotes from multiple companies. Northwestern Mutual is also known for selling primarily through financial advisors rather than online, which means you cannot quickly get a quote without speaking to someone.
Term life insurance is often cheaper at companies that sell online or by phone, because they have lower overhead costs. If you want permanent coverage with cash value, comparing illustrations from Northwestern Mutual, New York Life, and a few stock companies will show you the differences in cost and projected growth.
Frequently Asked Questions
Can I cancel my Northwestern Mutual policy anytime?
Yes, you can cancel (surrender) your policy at any time. If you have been paying premiums for several years, you will receive the cash value minus any outstanding loans and surrender charges. If you cancel very early, surrender charges may be high and you might receive little or nothing back. Review your policy document to see the surrender charge schedule.
What happens if I stop paying premiums?
If you miss a premium payment, Northwestern Mutual typically gives you a grace period (usually 30 days) to pay. If you do not pay within the grace period, the policy lapses and coverage ends. If your policy has cash value, the company may use the cash value to pay premiums automatically, which extends coverage but reduces the amount your beneficiaries receive.
Do I have to take a medical exam to get a Northwestern Mutual policy?
It depends on the death benefit amount and your age. Smaller death benefits and younger applicants may not need an exam. Larger death benefits typically require a medical exam, blood work, or both. Your advisor will tell you what to expect during the underwriting process.
Can I change my policy after I buy it?
Yes, you can make changes like increasing or decreasing the death benefit, changing how you use dividends, or adjusting premium payment frequency. Some changes may require underwriting or approval. Contact your advisor or Northwestern Mutual directly to discuss what changes are possible with your specific policy.
What if I want to switch from Northwestern Mutual to another company?
You can cancel your policy anytime and buy coverage elsewhere. Before you cancel, understand what you will receive in cash value and what your new premiums might be — rates may be higher if you are older or your health has changed. Some people keep their old policy and buy new coverage rather than canceling, depending on their situation.