Combination Life Insurance 

Combination Life Insurance Overview

A combination life insurance policy is a flexible life insurance policy that builds on traditional designs and guarantees. In its most flexible form, a combination life insurance policy provides for a variety of coverage and premium options.

A combination life insurance policy may include permanent life insurance, a term insurance component and paid-up additions. The policy can be mixed in almost any proportion.

The death benefit of combination life insurance is there to meet survivor needs for income and debt reduction, or to cover funeral expenses, estate administration costs, mortgage payments, children's education costs, household and child care services, and the expenses of last illness.

Combination life insurance can also provide security and value in business situations that call for a buy-sell agreement, key person coverage, a split dollar arrangement, and all the other potential circumstances where there is a business need for cash following the death of the insured.

In addition to the death benefit, tax-deferred cash value accumulation is available and can be used to take advantage of an opportunity or in cases of unexpected expenses or emergencies that may come up during the policyowner's lifetime.

When to Use Combination Life Insurance

• When you have a need for both permanent life insurance and term insurance.
• To place more emphasis on either the protection or accumulation aspects of life insurance.
• Life insurance to provide for a dependent with special needs.
• Estate planning for estate administration costs and estate taxes.
• Estate preservation for business succession to compensate heirs fairly.
• For small businesses requiring extra flexibility in meeting their life insurance needs.
• Keyperson protection for employees in different age groups.
• Executive benefit marketplace.
• Split-dollar funding arrangements.

Key Features of Combination Life Insurance

• A life insurance policy custom designed for your situation.
• A flexible and affordable way to purchase permanent coverage.
• A large death benefit at a competitive premium.
• Protection may be continued for your entire lifetime.
• A guaranteed minimum cash value.

NMFN-CL-001 (1209)

Adjustable CompLife®

Adjustable CompLife (ACL) allows you to own a life insurance policy custom designed for you. ACL offers nearly limitless ways to combine permanent life insurance and term insurance.

How ACL Works

Dividends earned on your ACL policy can be used to increase policy values.  If your policy has a term insurance benefit, the dividends will replace the term insurance with permanent coverage and cash value. This conversion process may be accelerated if you opt to make additional payments.

Any increase in insurance coverage may be subject to the underwriting process.

Adjustable CompLife is Affordable

• Almost infinite number of combinations from which to choose, you can establish a benefit and premium pattern to fit almost any budget.
• Make changes after issue. Your policy can evolve as your needs evolve, and as your ability to meet them increases.
• Policies are eligible for dividends which can be used to increase policy values.

Adjustable CompLife Specifications

Features

• Coverage can be continued for lifetime with guarantees based on design.
• Guaranteed cash value.
• Option to mix term insurance and permanent insurance.
• Optional additional premiums and lump sums.
• Eligible to receive dividends.

Issue Ages

• Ages 0-85

Policy Sizes

• Minimum amounts: $25,000
• Maximum amount:
• Policy size maximums based on underwriting and insurable interest limits.
• Total annual premium limits vary depending on policy size.

Premiums

• Whole life portion: Level premiums payable to age 121 or until death, if sooner.
• Term Insurance Benefit portion: Payable to age 121 or until death, if sooner; limited guaranteed period (will be affected by any changes in coverage or dividends).

Alternate Premium Payment Option

• Dividends may be used to pay premiums when the dividend exceeds the premium and the excess dividend is sufficient to convert the term portion of the policy by the 50th year (or age 90 if sooner).

Dividend Options*

• Increase policy values
• Reduce premium payments
• Accumulate at interest
• Receive in cash

*Choosing an option other than increase policy values prior to converting all term insurance could result in a reduction of term protection. Dividends are not guaranteed, but have been paid every year since 1872.

Options Available if Premium Payments Are Missed

• Automatic Premium Loan (APL) supported by the cash value.
• Remain in force as a reduced paid-up whole life policy.
• Remain in force for a limited period of time as extended term insurance.
• Cash surrender.

Policy Loans

• Most of the accumulated cash value is available for loan.
• Variable loan rate option.
• With “Direct Recognition,” the percentage of cash value borrowed affects amount of dividend credited
  Any outstanding loan and accrued interest balances are deducted from the policy proceeds upon surrender or death.

In Arkansas, ACL policies will have a 5% fixed loan rate.

Optional Policy Benefits*

• Waiver of Premium (Ages 0-59)
• Additional Purchase (Ages 0-38)

*Subject to underwriting and/or additional cost.

For costs and more complete information contact a Northwestern Mutual representative.

Download Adjustable CompLife® Brochure

NMFN-CL-002 (1209)

Estate CompLife©

With Estate CompLife:

• Permanent life insurance is combined with term insurance.
• Premiums vary with the proportion of term and permanent coverage that you choose.
• Maximum life insurance is provided for minimum premiums.
• Maximize the accumulation aspects of life insurance.
• Cash values are accessible for emergency or opportunity.

Personal and Business Protection

• Accommodate estate preservation needs for single individuals.
• Provide widows or widowers financial protection.
• A way to “equalize” or “rebalance” the amounts left to different heirs.
• Provide the means for a family business to pass on the full value of the enterprise to one child, while still leaving equitable assets to other children. Provide children from a previous marriage with a death benefit or pass on other assets from your estate to them.
• Provide a death benefit, but also have the ability to accumulate cash for retirement.
• Provide the means to fund buy/sell agreements, deferred compensation plans or executive benefit plans.

Economical

Estate CompLife (ECL) offers the ability to combine whole life insurance and term insurance to offer a death benefit at a low premium. When the policy is issued, the ratio of whole life to term protection can be adjusted, within limits, to create payments that fit your budget.

• Dividends earned on your ECL plan can be used to increase policy values.
• If your policy has a term insurance benefit, the dividends will be used to replace the term insurance and build cash value.
• Additional payments may be used to speed up this conversion process or to increase the total death benefit of the policy.
• Any increase in additional premiums may be subject to the underwriting process.

Estate CompLife has an Early Warning System which tests your policy every year to make sure the policy is receiving adequate premium payments to sustain the coverage to age 121, based on Northwestern Mutual’s current dividend scale. This system keeps you up to date in the event an adjustment is needed.

ECL Specifications

Features

• Coverage may be continued for life.
• Guaranteed cash value.
• Optional additional premiums and lump sums.
• Eligible to receive dividends.
• Option to mix term insurance with permanent insurance.

Issue Ages

• Ages 18-85

Policy Sizes

• Minimum amounts: $250,000
• Maximum amount:
• Policy size maximums based on underwriting and insurable interest limits.
• Total annual premium limits vary depending on policy size.

Premiums

• Payable to age 121 or until death, if sooner.
• Whole life portion: Guaranteed level for the life of the contract.
• Additional Protection (term) portion: Subject to change annually depending on dividend scale.

Alternate Premium Payment Options

• Eligible dividends and/or partial surrender of additions may be used to pay the premium.

Dividend Options*

• Increase policy values
• Reduce premium payments
• Accumulate at interest
• Receive in cash

*Choosing an option other than increase policy values prior to converting all term insurance could result in a reduction of term protection.

Options Available If Premium Payments Are Missed

• Automatic Premium Loan (APL) supported by the cash value.
• Remain in force as reduced paid-up whole life plan.
• Cash surrender.

Policy Loans

• Most of the accumulated cash value is available for loan.
• Variable loan rate or fixed 8%.*
• With “Direct Recognition,” the percentage of cash value borrowed affects amount of dividend credited.
• Any outstanding loan and accrued interest balances are deducted from the policy proceeds upon surrender or death.

*In Arkansas, ECL policies will have 5%.

Optional Policy Benefits

• Waiver of Premium (Ages 18-59)
• Additional Purchase (Ages 18-38)

For costs and more complete information, contact a Northwestern Mutual representative.

Download Estate CompLife® Brochure

NMFN-CL-003 (1209)

Survivorship CompLife®

With Survivorship CompLife© (SCL):

• One permanent life insurance policy insures two lives, generally for less than the cost of two individual policies.
• Benefit is payable upon the second death.
• Proceeds can be used to preserve the value of an estate or business.
• Parents of children with special needs can be assured that the costs of special caregiving can continue to be met when both of them have passed on.
• One generation can preserve its hard-earned success for the benefit of the next generation.

Estate Planning: Preserve

Failure to make arrangements to pay the federal estate taxes that inevitably become due (after both partners in a marriage die) can be a costly oversight. As much as 55% of an estate may be used up by the taxes and costs that occur at the time.

Current law permits deferral of the estate tax until after the second death. When the second spouse dies, the beneficiaries have options.

• Liquidate part of the assets of the estate
• Borrow, using the value of the estate as collateral

“Necessity makes do,” as they say, but these are drastic measures. A much more practical solution will be available to beneficiaries if action is taken while both spouses are still alive.

The beneficiaries will be able to pay federal estate taxes and administrative costs with the proceeds of a “second-to-die” life insurance policy.

Business and Personal Planning: Protect

There are other situations in which “second-to-die” life insurance can provide the solution.

A business may still be able to function properly after the loss of one key person, but would need considerable extra cash upon the death of a second key person.

Parents of children with special care needs are in a similar situation. Necessary expenses may be met by just one living parent, but the need for funds would become critical at the time of the second parent’s death.

Charitable Giving: Gifting

People who have a special interest in the future of a school, church, hospital, foundation, or other charity, often come in twos.

Couples who are charitably inclined can use SCL as a practical and affordable way to increase the impact of their charitable contributions without increasing their financial vulnerability during their lifetimes.

Their annual gift can be used to pay the premium and create an eventual endowment of sizable proportions. With proper planning, their estate will not owe gift or estate taxes when the benefit is paid to the charity after both donors have passed away.

For Any Situation

An SCL policy assures that money will be available precisely when the need becomes most critical (upon the death of whichever partner, or parent, lives longer).

SCL is a practical and far-reaching gift. It allows a couple to maintain the cash they need for as long as either of them lives, and to provide financial impact far beyond their own lifetimes.

SCL Specifications

Features

• Protection that can be continued for lifetime.
• Guaranteed minimum cash value
• Option to mix term insurance with permanent insurance
• Optional additional premiums and lump sums
• Eligible to receive dividends.

Issue Ages

• Ages 20-85

Policy Sizes

• Maximum amount: Policy size maximums based on underwriting and insurable interest limits.
• Total annual premium limits vary depending on policy size.

Premiums

• Payable until the second death, but no later than age 121 of the younger insured.
• Whole life portion: Guaranteed level for the life of the contract.
• Additional Protection (term) portion: Subject to change annually depending on dividend scale.

Alternate Premium Payment Option

• Eligible dividends and/or partial surrender of additions may be used to pay the premium.

Dividend Options*

• Increase policy values
• Reduce premium payments
• Accumulate at interest
• Receive in cash

*Choosing an option other than increase policy values prior to converting all term insurance could result in a reduction of term protection. Dividends are not guaranteed.

Options Available If Premium Payments Are Missed

• Automatic Premium Loan (APL) supported by the cash value.
• Remain in force as a reduced paid-up whole life plan.
• Cash surrender.

Policy Loans

• Most of the accumulated cash value is available for loan.
• Variable loan rate or fixed 8%.*
• With “Direct Recognition,” the percentage of cash value borrowed affects amount of dividend credited.
• Any outstanding loan and accrued interest balances are deducted from the policy proceeds upon surrender or death.

*In Arkansas, SCL policies will have 5%

Optional Policy Benefits

• Waiver of Premium available: Ages 20-59
• Death Waiver of Premium available: Ages 20-75

For costs and more complete information, contact a Northwestern Mutual representative.

Download Survivorship CompLife® Brochure

NMFN-CL-004 (1209)

Corporate CompLife®

Corporate CompLife® provides flexibility for the executive benefit market. It offers you the ability to design a contract with a death benefit schedule that can vary each year to coincide with the projected costs of your non-qualified executive benefit plan.

With Corporate CompLife®

• Components can be combined in a nearly infinite number of ways.
• You can design the life insurance policy with an overall premium per thousand that can vary over a wide range.
• A level premium is set at issue based on an assumed dividend scale; dividends are not guaranteed.
• Dividends can be used to increase policy values.
• If your policy has a term insurance benefit, the dividends can be used to replace the term insurance with permanent coverage and cash value.
• Corporate CompLife® is required to have a corporation as owner, payer and beneficiary. Exception is made for certain split-dollar plans.

Corporate CompLife® Specifications

Policy Loans

• You may borrow from the cash value of a Corporate CompLife® policy. Loans may be taken at a market loan rate based on Moody’s index for corporate bonds or at a fixed rate of either 8% or 5%. The amount borrowed affects the amount of dividends you will receive.  Any unpaid loans, along with accumulated interest, will be deducted from the proceeds at death or if the policy is surrendered prior to death.

Cash Value

• Corporate CompLife® has a guaranteed cash value specified by the policy, assuming all required premiums have been paid.

Premiums

• Premiums are payable until age 121. Base premiums are guaranteed to remain level and Additional Protection premiums are guaranteed for one year.

Optional Policy Benefits

• Waiver of Premium

For costs and more complete information, contact a Northwestern Mutual representative.

NMFN-CL-005 (1209)