Key Features of Life Insurance
If you die while the policy is in effect, it will provide financial support to the people you care about most.
In addition to the death benefit, many of Northwestern Mutual’s policies have a cash value. In general, cash value grows as you make premium payments and when interest or dividends are credited to the policy.
That’s money you can access through loans or by surrendering some or all of your policy. You could use your cash value to pay for things like college tuition, making a down payment on a house, providing cash for a new business, or helping to fund your retirement.2
Many of Northwestern Mutual’s policies are eligible for a dividend.1
You may choose to use your policy dividends in multiple ways. Most policyowners choose to use them to increase policy values. You can also use them to help pay your premiums or let them accumulate and earn interest. In addition, you can choose to receive your dividends in cash.
You may be able to convert some term life insurance policies to permanent life insurance without having to go through the process to prove your insurability a second time.
Adding the Additional Purchase Benefit (APB) to a policy means you lock in the right to buy more insurance in the future based on your health today.
That means, at selected intervals up until you’re 40, you can buy more insurance. Even if you’re diagnosed with an illness or condition that would make it difficult or more expensive to get life insurance, you’re able to buy more insurance at the specified intervals at the same underwriting class as when you initially got your policy.
You can also add the APB to a life insurance policy you are buying for a child. This way, you are not only insuring the child's life, but also protecting the child's ability to purchase additional insurance later in life, no matter what happens to that child’s health.
If things cost more, your death benefit will go up.
What seems like plenty of money today may not be in the future. At the beginning of 1980, the median sales price of a new home in the US was $62,900. 10 years later, at the start of 1990, the median price of a new home was $125,000. At the start of 1996, the price of a gallon of milk was $2.54. By 2013, it was $3.52. On policies where the Indexed Protection Benefit is available, adding the IPB increases your death benefit based on the Consumer Price Index (a common measure of inflation), with an annual cap.
By adding the Waiver Benefit, if you become totally disabled, after a period of time, you don’t have to pay your premiums and your policy stays in effect. During disability, premiums are credited to the policy and, for permanent insurance policies, contributions to the tax-deferred cash value will continue. With term insurance, a disabled policyowner may be even able to convert the term policy to a permanent plan and have those premiums waived as well.
Nonforfeiture options on permanent life insurance protect you if you are ever unable to pay your policy premiums. Options may include:
- Automatic Premium Loan (APL)
If a scheduled premium payment is missed, money is automatically borrowed against the cash value of a permanent life insurance policy to pay the overdue premium, and interest is charged until the loan is repaid.
- Extended Term Insurance
Keeps the full death benefit in force for a limited period of time.
- Paid-Up Insurance
Keeps some level of protection in force by using the policy's entire cash value to purchase paid-up permanent life insurance. The face value of the paid-up insurance will, in most cases, be less than the face amount of the original policy, but no further premiums are required. The paid-up policy remains in force until the insured dies.
- Cash Surrender
Elect to receive the policy's cash value by surrendering the policy. Any outstanding loan balance and accrued loan interest will be deducted from the cash value.
1Dividends are not guaranteed but Northwestern Mutual has paid one every year since 1872. Although eligible for dividends, dividends are not expected to be paid on Universal Life and Variable Universal Life policies.
2Any loan or withdrawal of cash value will reduce your policy’s death benefit.