Living Benefits of Life Insurance
Life insurance has no equal when it comes to providing for those you care about when you die. At a time when their lives have dramatically changed, your survivors can be financially secure. Because of your foresight, their everyday needs can be met.
But did you know that a permanent life insurance policy is also an excellent foundation for a long-term financial plan? Whether you’re wondering if you will be able to retire comfortably or provide for your family in an emergency, permanent life insurance like 65 Life or 90 Life or our Limited Pay Life options can be one of the best low-risk financial vehicles available to help you provide for future living needs. If you’re looking for an option with the potential for more growth in your policy, an option like Variable Life Insurance may be for you. If you’re looking for flexibility in your premium payments, you may want to consider Universal Life Insurance.
When you retire, you may need more income than your pension plan, 401(k) or Social Security can provide. You may use the cash value in a permanent life insurance policy to supplement your retirement income if you no longer need the full death benefit.
The cash value your policy generates as your child is growing can be used to help pay college tuition costs. Using a life insurance policy’s cash value to pay for college expenses has some important advantages over other education funding methods.
- Some education funding tools dictate how and when the money you have accumulated must be used to avoid penalties and taxes. Generally life insurance doesn’t. If you decide not to use your permanent life insurance policy’s cash value to pay for tuition, it just keeps on growing, tax-deferred.
- Permanent life insurance is one source of education funding that will not be taken into consideration for the purposes of determining your child’s eligibility for federal financial aid. This is important if you’re looking to supplement your existing financial resources with financial aid or loans to cover the full cost of your child’s education.
You can use the cash value to help make the down payment on a new house, provide start-up cash for a new business or take advantage of other opportunities as they arise.
The guaranteed accessibility to the cash value makes permanent life insurance one of the most valuable assets people can own. Cash value can be accessed through a variety of means.
Policy loan interest is charged when money is borrowed against your policy. Death benefit proceeds are reduced by any loan balance. Policy dividends, if any, may be affected by policy loans. If the policy is surrendered, proceeds paid will be reduced by any loan balance. If policy loan balances are not repaid, resulting in a lapse, it may have a tax impact.
Non-guaranteed values and benefits include dividends. The dividend scale is reviewed annually by the company’s Board of Trustees and is subject to change.
One of the ways Northwestern Mutual’s permanent policies provide value is with a dividend.1
Northwestern Mutual's structure as a mutual company and its unique investment approach allows us to return to policyowners a portion of investment gains as well as the savings incurred from claims and expense in the form of dividends. Although these dividends cannot be guaranteed, Northwestern Mutual has paid one every year since 1872.
In fact, Northwestern Mutual has paid nearly $73 billion in life insurance dividends over the past 20 years.2 Northwestern Mutual has consistently paid the highest total life insurance dividends in the industry.3
Northwestern Mutual has the highest financial strength ratings awarded to any life insurer by all four of the major credit rating agencies.
As a mutual company, Northwestern Mutual has no stockholders. That means we can focus on providing value to policyowners, rather than splitting that focus between customers and shareholders. Because of this, Northwestern Mutual can take a longer-term investment approach with the assets in its general account, which can result in greater value for you.
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.
2Northwestern Mutual analysis of ordinary life insurance dividends based on historical SNL data.
3Source: SNL Financial. Prepared and calculated by The Northwestern Mutual Life Insurance Company, Milwaukee, WI.