I am in the final phases of deciding on my term insurance, and one important factor for me is convertibility. If I ever need to convert my term policy to a whole life policy, I know that Northwestern Mutual offers a great whole life policy. However, I’m curious about MassMutual’s whole life policy. How does it compare?
Any input would be appreciated.
Mass Mutual consistently offers a higher annual declared dividend compared to NWMF, a trend observable since at least 1995.
Should you opt for a Whole Life policy with Mass Mutual in the future, there may arise a need or desire to borrow against your accrued cash value.
NWMF treats such loans under a policy of “Direct Recognition”. In this approach, borrowing reduces the cash value before calculating dividends, potentially impacting their amount.
In contrast, Mass Mutual operates as a Non-Direct Recognition company. Here, dividends are calculated based on the cash value, with the outstanding loan (plus interest) factored in. Consequently, dividends from Mass Mutual may exceed those from companies like NWMF, which hold loans against the policyholder.
Comparing Northwestern Mutual and MassMutual whole life policies involves considering various factors such as financial strength, policy features, flexibility, and customer service. Northwestern Mutual and MassMutual are both well-established insurance companies with strong financial ratings, but their whole life policies may have differences in terms of premiums, cash value growth, dividend rates, and riders offered. It’s essential to carefully review each company’s offerings, request quotes, and consider factors like convertibility options, surrender charges, and policy fees. Additionally, seek advice from a trusted financial advisor or insurance agent who can help you assess your needs and choose the policy that best aligns with your long-term financial goals and priorities.