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2024 Northwestern Mutual Disability Insurance Review

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4 mins

Once self-proclaimed as “The Quiet Company,” Northwestern Mutual has evolved from a pure life insurance company to a multi-faceted financial services giant.

This old-line life insurance company offers an individual disability insurance policy that isn’t quiet with some of its options. Before we look at the policy features, let’s get to know a bit about the provider of this coverage.

About Northwestern Mutual

Northwestern Mutual, once known as Northwestern Mutual Life (NML), is headquartered in Milwaukee, Wisconsin. NML is technically now a subsidiary of Northwestern Mutual, and they are the architects and underwriters of the company’s individual disability insurance product.

Founded in 1857, Northwestern Mutual is a “mutual insurance company,” meaning its policyholders own it. It has no stock available in the capital markets.

The company’s reputation, and ratings, are impressive. The most respected and reliable financial rating companies have rated Northwestern Mutual at the top of their class:

  • A.M. Best: A++ (A.M. Best’s Highest Rating)
  • Moody’s Investor Service: Aaa (Moody’s Highest Rating)
  • Standard & Poor’s (S&P): AA+ (S&P’s Second-Highest Rating)
  • Fitch Ratings: AAA (Fitch’s Highest Rating)
  • Better Business Bureau: A+ (BBB's Highest Rating)

As evidenced by its ranking as the second-largest U.S. life insurance company with over $10 billion in annual premiums collected, Northwestern Mutual's market share is 6.33% of the entire U.S. life insurance market.

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A flexible disability insurance product

Northwestern Mutual offers both short-term disability and long-term disability plans. Premium amounts vary according to the monthly benefit amount, the occupation of the insured, the length of time disability payments are paid to the insured, and the definition of disability selected. There are four alternative definitions of total disability and a partial disability coverage option if the policyholder can only work part-time.

Premium payment options are also flexible and chosen by the insured. These options include:

  • Level Premium: As long as the policy is in force, premiums will remain level.
  • Annually Renewable Disability Income (ARDI): Much like Annual Renewable Term Life Insurance (ART), premiums start lower and will gradually increase each year. Before the premiums become unaffordable for the insured, they can upgrade to the Level Premium option.
  • Level/ARDI: A combination of the Level and Annually Renewable premium payment plans.
  • Guaranteed Renewable: With this option, the policy benefits can’t change, though premium amounts can change by class (for example: rates for physicians may be increased but not for computer programmers).
  • Non-Cancelable Guaranteed Renewable: This is the option with the highest premium because premiums won’t increase for the life of the policy, and the policyholder’s coverage can’t be canceled.

Optional disability insurance policy benefits

Along with a robust policy come some optional benefits that make Northwestern Mutual’s disability policy very competitive feature-wise:

  • Indexed Income Benefit: If the policyholder has been receiving disability benefits for twelve months, inflation protection of 6%, compounded annually, goes into effect.
  • Future Increase Benefit: Also provides inflation protection of 6%, which also compounds annually.
  • Additional Purchase Benefit: As a policyholder’s income increases, they can purchase additional benefit payment amounts (subject to underwriting – income verification, health status, etc.).
  • Social Insurance Substitute Benefit: This benefit supplements Social Security Disability Insurance (SSDI) benefits being received.

Learn More: Disability Insurance Riders

One drawback

Northwestern Mutual comes with impressive financials, a reputation for high-quality policyholder service, and a customizable policy. However, there is one rather substantial drawback – the availability of information online.

If you are interested after reading this review or the limited amount of information on Northwestern Mutual’s website, you have to talk with one of their representatives to get the real nuts and bolts information you need to decide if their policy will meet your needs, including pricing.

There are websites that offer detailed information about the different companies and policies they provide, including prices. You can even apply for coverage online. Increasing amounts of people are gravitating toward this convenience and prefer not to talk with a salesperson.

Having grown up in upstate New York, Bob Phillips spent over 15 years in the financial services world and has been making freelance writing contributions to blogs and websites since 2007. He resides in North Texas with his wife and Doberman puppy.

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.

— Published June 21, 2021
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