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Forms

The Customer Service Center is intended to provide general information about Northwestern Mutual insurance policies and annuities, and does not modify policy or contract provisions in any way. Any change to a policy or annuity may have tax or financial consequences. As always, your Northwestern Mutual Financial Representative can answer your questions and provide you with service for all of your policies.

FAQs

Access Online Account Information

Northwestern Mutual online account access is available for the following types of policies/accounts:

  • Life insurance
  • Disability insurance
  • Annuity contracts
  • Variable annuity contracts

Register for Online Access to Your Accounts
Register now so you can access your accounts at your convenience.

You will need to have a product number in hand to register. This includes one of the following – insurance policy number, annuity contract number or insurance service account number.

Answers to Common 1099 Questions

General:

Why am I receiving a Form 1099 from Northwestern Mutual?

The Internal Revenue Service (IRS) and the Internal Revenue Code (IRC) require Northwestern Mutual to report certain distributions received from life insurance and annuity contracts, and interest earned. The IRS requires that we report this information on a Form 1099 to both the taxpayer and the IRS. Some common examples of taxable income Northwestern Mutual is required to report include:

Form 1099-INT – Interest earned from a Billing/Payment Account, interest earned on dividends that are left to accumulate (i.e. Accumulated Dividends), interest income plans, interest earned on death proceeds after the date of death, but prior to the proceeds being paid, and interest earned on Access Fund Accounts; if the amount of the interest is at least $10.00.
Form 1099-R, Distributions From Pensions, Annuities, ... Insurance Contracts, etc. - Full and partial distributions and certain dividend payments from life insurance and annuity contracts. Note: Certain tax-free exchanges are also reportable on Form 1099-R for informational purposes.

Can Northwestern Mutual advise me on tax matters?

No, Northwestern Mutual cannot provide tax advice as tax laws are complex and circumstances can vary greatly. This FAQ provides answers to common questions about the Forms 1099 and what is reported on them. For tax advice you should consult with your tax advisor. For example, if you received a 1099-R indicating “taxable amount not determined” you may want to discuss with a tax advisor to determine the taxable portion. You may find helpful information on the Internal Revenue Service site including IRS Publication 17, which provides information on a variety of topics and is searchable.

This contract has multiple owners, why was only one 1099 issued?

Northwestern Mutual records that a contract has multiple owners, but we do not have knowledge of the arrangement among the owners of the contract. The IRS specifies that for multiple owners, the reporting company may report to the first owner of record to fulfill its reporting obligation. The first owner of record, in turn, can divide and report the income to the other owners (referred to as “nominees”) on separate Forms 1099 based on their respective ownership interests. If you need to nominate additional owners you may want to consult with your tax advisor or to refer to General Instructions for Certain Information Returns (Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G).

Can I download my Northwestern Mutual Form 1099 information directly into my tax preparation software?

Currently, Northwestern Mutual does not provide this service for life insurance or annuity products.

Form 1099-INT:

Where do I report the interest income from the Form 1099-INT?

Generally, interest income reported on Form 1099-INT is reported under the category of “taxable interest” on line 2 of the 2015 Form 1040EZ or line 8a on the 2015 Forms 1040A and 1040.

I received a Form 1099-INT as beneficiary of a life insurance contract. I thought death benefits were tax-free. Why did I receive a Form 1099-INT?

While the death benefits from a life insurance contract are generally tax-free, interest may be paid from the date of death until the claim is settled. The IRS requires that we report the interest you earned on Form 1099-INT.

Form 1099-R:

Where do I report the taxable gain from the Form 1099-R on my federal income tax return?

If you receive income that is reported on Form 1099-R you cannot use Form 1040EZ. Generally, distributions from life insurance and annuity contracts are reported under the category of “pensions and annuities” on lines 12a and 12b on the 2015 Form 1040A (11a and 11b if an IRA distribution) or lines 16a and 16b on 2015 Form 1040 (15a and 15b if an IRA distribution).

How should the taxable gain on Form 1099-R be reported -- ordinary income or capital gains?

Generally, the gain reported on the full or partial distribution of a life insurance or annuity contract is considered ordinary income. There are some situations in which the proceeds are treated as capital gain, e.g. the life insurance contract was sold by an owner to another party. If you feel your transaction may qualify for capital gain treatment you should consult with your tax advisor.

How is the taxable amount reported on the Form 1099-R determined for a life insurance contract?

For any part of a transaction to be taxable, the contract must first have a gain. A life insurance contract has a gain when the gross cash value exceeds the cost basis (generally premiums paid less adjustments) of the contract.

Generally, when a taxpayer takes a distribution from a life insurance contract the IRC allows the taxpayer to recover the cost basis before any gain is withdrawn, but there are some exceptions. Distributions (including loans) from life insurance contracts classified as Modified Endowment Contracts under the IRC are taxed gain-out-first. Also, distributions from a contract within the first 15 contract years may be subject to gain-out-first taxation depending on the size of the withdrawal and other factors.

There was a loan on my life insurance contract when it was surrendered/lapsed. Why is the gross distribution on the Form 1099-R greater than the amount I received at that time?

The IRS requires that if a loan is outstanding when a life insurance contract is surrendered or lapses, the taxable amount reported is generally determined by comparing the gross cash value of the contract to the remaining cost basis. The transaction is reported as if the gross cash value were distributed at the time of the surrender or lapse and then used to pay off the loan; the remaining value, if any, is distributed to the contract owner.

I exchanged my life insurance contract for another life insurance contract. Why did I receive a Form 1099-R (or possibly two Forms 1099-R)?

The IRC allows certain exchanges (section 1035 tax-free exchanges), to occur without generating taxable income even though one contract is surrendered for another.

  • If you exchanged your Northwestern Mutual contract for one with a different company, and the exchange qualified as an IRC section 1035 tax-free exchange, a Form 1099-R was generated showing a Distribution Code of “6” in Box 7. This provides the cost basis transferred (amount in Box 5) to your new contract as part of the exchange. No taxable amount is reported in Box 2.
  • If you received two Forms 1099-R for the same contract on the exchange from Northwestern Mutual to another company, the exchange was not entirely tax-free. One Form 1099-R will report the amount of taxable income generated from the exchange (Distribution Code of “7” in Box 7), which occurs if you received cash or an outstanding loan was extinguished as part of the exchange. The other Form 1099-R reports the cost basis transferred (Distribution Code of “6” in Box 7) to the new company. If you exchanged one Northwestern Mutual contract for another Northwestern Mutual contract under IRC section 1035, we do not send a 1099-R with a Distribution Code of “6”as Northwestern Mutual tracks the cost basis internally.
  • If your contract did not qualify for the exchange, the surrender was taxable to the extent of the gain and reported on Form 1099-R with a Distribution Code of “7” in Box 7.

I surrendered multiple life insurance or annuity contracts. Why did I only receive one Form 1099-R?

The IRS allows for consolidating information from multiple contracts on one form, if the information is similar. As a mutual insurance company that is owned by the policyowners, we take advantage of this opportunity to reduce costs. We do include a breakdown by contract on the page following the Form 1099-R.

I received a Form 1099-R reporting all or part of my annual dividend on my life insurance or annuity contract as taxable. Why?

Generally, for life insurance, the IRC allows the taxpayer to recover the cost basis of the contract before anything is taxable. If the cost basis was recovered through previous withdrawals, then subsequent dividends that are paid in cash, applied to a contract loan, or deposited into a Billing/Payment Account are reported as taxable income. Dividends from an annuity are fully taxable.

My contract dividend was reported as taxable; shouldn’t that dividend have been reported on Form 1099-DIV?

No, per the IRS instructions, taxable dividend distributions from life insurance and annuity contracts are reported on Form 1099-R - Distributions From Pensions, Annuities, ... Insurance Contracts, etc. The Form 1099-DIV is generally used for dividends paid on corporate stock.

I received a Form 1099-R with a Distribution Code of “1” in Box 7 indicating that I am subject to a penalty tax because at the time of the distribution I was younger than age 59 ½. While I was younger than 59 ½, I was also disabled and should qualify for an exception under IRC section 72. Can this Form 1099-R be corrected?

While you may qualify for the disability exception, the definition of disability can vary and to qualify you must meet the IRS definition of disability. Northwestern Mutual is not in the position to make the determination of whether you qualify under the IRS definition. You should consult with a tax advisor regarding claiming the exception on your federal tax return.

What should I do if I think some of the information on my 1099-INT/1099-R is incorrect?

Information believed to be incorrect:

  • Social Security Number or Taxpayer Identification Number
  • Address
  • Your tax form was submitted to the state of your secondary residence, rather than your resident state.

Call the telephone number on the upper right-hand corner of the Instructions for Recipient page that was sent along with your 1099.

Information believed to be incorrect:

  • Dollar amounts
  • Distribution Code

If the information relates to an amount or distribution code, you can call the number on the Instructions for Recipient page as well. However, prior to doing so, please consider:

In some instances the information on the 1099 may be combined from multiple policies/contracts or transactions and may account for an apparent discrepancy—consider all of the transactions that were completed during the tax year.
The reporting and determination of taxable income from life insurance policy and annuity contract is governed by Internal Revenue Code, and not a contractual stipulation on the part of Northwestern Mutual. Northwestern Mutual is required by law to report certain taxable transactions from life insurance policies and annuity contracts.

There may be instances where Northwestern Mutual is required to report a transaction as taxable in a certain manner, but for reasons not reflected in Northwestern Mutual’s records, the distribution may qualify for different tax treatment. In these situations you may need to provide additional information to the Internal Revenue Service (not Northwestern Mutual) to support your position regarding the amount of income that is taxable. Northwestern Mutual cannot determine the impact of transactions that are not fully reflected in our records. You should seek tax advice from a tax advisor.

This FAQ is not intended to be tax advice and cannot be used for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or any other applicable tax law and you are advised to seek tax advice based upon your own particular circumstances from an independent tax advisor.

Answers to Common Billing Questions

Below are a few of the common billing questions typically received from policyowners.

I received an "Urgent Notice" What does this mean?

We will send you an Urgent Notice if we don't receive a check from you within 10 days of the due date.

  • If you have mailed your premium, don't panic. Your payment and the Urgent Notice may have crossed paths in the mail.
  • If you have not paid your premium, do so as soon as possible to maintain your coverage.

Why are there changes to my bill amount?

The amount of your bill may change because:

  • Your benefits have increased to keep pace with inflation.
  • One or more policies have been added to or deleted from your bill.
  • The annual premium on your term life insurance policy has increased.
  • Changes have been made to the amount or use of your dividends.
  • Changes have been made to your policy.
Apply for a Policy Loan

One of the most valuable features of a life insurance policy is the ability to borrow from your policy's cash value. However, taking out a policy loan can have a significant impact on your policy's performance and future non-guaranteed dividends. Also, any outstanding loan balance and interest will reduce proceeds paid to your beneficiary.

Talk to your Northwestern Mutual representative before making any decisions.

If you have a policy that is dated after Dec. 31, 1981, or that has been amended to direct recognition, a loan may reduce the annual non-guaranteed dividends you receive on your policy. Direct Recognition is the process Northwestern Mutual uses to determine the dividends that are paid on a whole life policy. It factors in the amount of loan activity on the policy in order to fairly distribute the company's surplus to all policyowners.

Applying for a Loan
To apply for a policy loan of more than $100,000, you'll need to complete a Policy Loan Agreement form. To obtain a copy of the form, ask your representative or call Northwestern Mutual at 1-800-388-8123, 7 a.m. to 6 p.m. CT, Monday through Friday.

To apply for a loan of $100,000 or less, contact your representative or call Northwestern Mutual at 1-800-388-8123, 7 a.m. to 6 p.m. CT, Monday through Friday.

Please have your policy number ready when you call.

How Interest Affects Your Policy
Interest on your loan accrues daily and is billed annually until the loan is repaid. Unpaid interest is added to principal where it continues to accrue and compound. This may result in the loan exceeding the cash value of your policy. If this happens, outside funds will be needed to avoid termination and a potentially significant taxable gain.

How Loans Affect Certain Policy Types

Variable Life and Variable CompLife policies
Taking a loan from a Variable Life or a Variable CompLife will permanently affect your policy, even if you repay the loan in full. That's because the cash value used as collateral for your loan will be placed in the company's general account and will not share in the investment experience of the underlying funds.

Policies Classified as Modified Endowment Contracts
Loans and loan interest are taxable when taken as ordinary income to the extent of the gain in the policy. Northwestern Mutual is required by the Internal Revenue Service (IRS) to report either the amount you borrow or the gain in the contract, whichever is less. If you are under age 59 1/2 when you take the loan, the IRS may assess an additional 10% penalty on the taxable amount. Modified Endowment Contracts may be subject to other special tax treatment. Talk with your tax consultant before making your decision.

Repaying Policy Loans
Repaying your loan is important. It keeps your policy in force and maintains the level of protection you planned to provide for your beneficiaries. Repayment can restore your policy's death benefit and cash value, and may increase non-guaranteed dividend performance. As you pay off your loan, you will also reduce your interest payments—a lower balance means lower annual interest charges.

To repay a policy loan:

  • Contact your representative
  • Call Northwestern Mutual at 1-800-388-8123, 7 a.m. to 6 p.m. CT, Monday through Friday
  • Send payment to:

Northwestern Mutual
PO Box 88245
Milwaukee, WI 53288-0245

Please write your policy number(s) on your payment to ensure proper crediting.

You can repay your loan in installments, in a lump sum, or with your scheduled bills.

Installments
You choose the amount and the frequency of the payment.

Lump-sum payment
You repay the loan all at once.

Scheduled bill payments
If you pay your premium through an Insurance Service Account, we can add your loan payments to your bill monthly, quarterly or every six months. Payments can be as little as $10 a month.

Apply for Early Payment Benefit

The Early Payment Benefit (EPB) advances a portion of the death benefit if the insured has a terminal illness and an expected lifespan of six months or less. The company offers this program so that terminally ill insureds can use the advanced death benefit to help with the financial burden of a serious illness.

EPB is not available in the following states (due to state approval):

  • Illinois
  • Indiana
  • Kentucky
  • Massachusetts
  • New Jersey
  • New York
  • Pennsylvania
  • Texas
  • Vermont

EPB is not available on the following contracts:

  • Variable Life
  • Universal Life
  • Decreasing Term
  • Extended Term
  • Most business owned policies
  • Joint Life and Joint CompLife before the first death
  • Term policies beyond the conversion period

Amount Available

  • Total insurance in force must equal at least $50,000 (for all qualifying policies)
  • Maximum percentage that can be advanced per policy is 50% of death benefit
  • Maximum amount that can be advanced for all qualifying policies is $250,000
  • Minimum advance is $10,000

How to Apply
Northwestern Mutual administers the benefit at the policyowner's request. You must complete the Early Payment Benefit form. We will need medical information confirming that the person insured has less than six months to live. For a copy of the form:

  • Contact your representative
  • Contact Northwestern Mutual directly at 800-388-8123, 7:00 AM to 6:00 PM CT, Monday through Friday

The Internal Revenue Code, as amended by the Health Insurance Portability and Accountability Act (HIPAA) of 1996, provides that qualified accelerated death benefits are treated as tax-free death benefits, and the addition of a qualified accelerated death benefit to a life insurance contract is not treated as an exchange or material change for tax purposes.

Change the Beneficiary

The beneficiary of a policy is the person who receives the proceeds of an insurance policy upon the death of the insured. The beneficiary is named by the policyowner. The policyowner is the only person who can change the beneficiary.

Changing a Current Beneficiary's Name or Address
You do not need to fill out a form if you are only changing the current beneficiary's name and/or address (i.e. marriage, adoption, or other legal name change). Simply call your representative, Northwestern Mutual or contact us.

To Change a Beneficiary
To change the beneficiary, you will need to complete a change of beneficiary form. Simply call your representative, Northwestern Mutual or contact us..

Change the Owner of your Policy

Changes in your personal life may create the need to change the policyowner. There may also be tax or legal advantages to having your life insurance policies owned by a trust, or by other family members who will be the beneficiaries.

The decision to change the policyowner should not be taken lightly. Before requesting a form, contact your Northwestern Mutual representative, attorney, or other advisors to discuss the ramifications.

"Policyowner" Defined
The policyowner is the person or entity who owns an insurance policy and has all contractual rights. The policyowner does not have to be the person who is insured or who pays the premium, except on a tax-qualified annuity.

Multiple Policyowners
You may name multiple policyowners. All policyowners must act jointly on all policy transactions, however, and all their signatures are required on any documents that change the policy.

Premium Payments and Death Proceeds
Changing the ownership of a policy does not change the beneficiary or the person who receives the bill. To change the beneficiary, simply call your representative, Northwestern Mutual or contact us.

To Change the Owner
To change the owner, you will need to complete an owner designation form.  Simply call your representative, Northwestern Mutual or contact us.

Settlement Plans

Your beneficiary has several kinds of settlement choices, including lump sum, interest income, period certain for a set number of years, life income plan, Joint Life income plan or the Northwestern Access Fund. Our plans are designed to provide flexibility allowing your beneficiary to preserve your benefit while earning interest, receive income over a specified period, or receive income for their lifetime. Choices are subject to availability and can be discontinued at any time. Plans are subject to individual contracts and market types.

Northwestern Mutual offers two basic types of income plans—fixed and variable. Both offer a number of options. A variable income plan is only available with a variable annuity.

The type of settlement choice you select should be based on your financial circumstances, your tolerance of risk and the return potential.

See also:

  • Fixed Income Plans
  • Variable Income Plans
Convert Term Insurance to Permanent Insurance

Visit the Term Conversion Center to learn why you would want to convert your term insurance to a permanent insurance policy and what your conversion rights are, including the conversion period and conversion credits.

Learn About Fixed Settlement Plans

Northwestern Mutual offers a number of fixed income plans:

  • Interest Income Plans
    Allows you to earn interest on your proceeds while keeping your principal intact.
     
  • Period Certain Income Plans
    Allows you to receive principal and interest in monthly payments for a specified period of time.
     
  • Specified Amount Plans
    Allows you to receive payments of principal and interest until the funds are exhausted.
     
  • Life Income Plans
    Pay principal and interest, in equal amounts, on a monthly basis for the rest of your life.

Types of Interest Income Plans

Interest Income Minimum Rate

  • A minimum of $2,000 is required.
  • You can make withdrawals and transfers to another income plan at any time at no charge.
  • The current interest rate is payable for the calendar year and may change annually, as determined by Northwestern Mutual.
  • The interest rate will never be lower than the guaranteed rate specified in your contract.
  • Interest is paid to you monthly, quarterly, semi-annually or compounded annually.

Interest Income with Guaranteed Interest Rate

  • A minimum of $5,000 is required.
  • You can select from an interest period of six months, one year, two years, five years or ten years, depending on availability.
  • At the end of the interest period, your choice will renew automatically, unless you specify otherwise. The rate of interest will be that offered by Northwestern Mutual at that time.
  • Interest is paid to you monthly, quarterly, semi-annually, or compounded annually.
  • You can make withdrawals and transfers at the end of the interest period you select. A charge will be deducted, however, if you make a withdrawal or transfer before the end of your interest period.

Types of Period Certain Income Plans

Period Certain for Specified Period

  • A minimum of $2,000 is required.
  • Principal and interest in varying monthly payments over a specified period between 1 and 30 years.
  • The current interest rate is payable for the calendar year and may change annually, as determined by Northwestern Mutual.
  • It will never be lower than the guaranteed minimum rate specified in your contract.
  • Interest that exceeds your guaranteed rate will be added to your guaranteed payments.
  • A withdrawal or transfer of the remaining funds can be made free of charge at any time before the end of your payment period. Partial withdrawals are not allowed.

Period Certain for Specified Period with Guaranteed Interest Rate
The Period Certain for Specified Period with Guaranteed Interest Rate option includes the following:

  • A minimum of $5,000 is required.
  • You receive principal and interest in equal monthly payments guaranteed for a specified period of 2 to 20 years.
  • The interest rate and the payment amount are both guaranteed for the time period you select.
  • A full withdrawal or transfer can be made at any time. A charge will be deducted, however, if you make a withdrawal or transfer before the end of the period.

Types of Specified Amount Plan

Specified Amount Plan

  • Principal and interest are paid to you in an amount you choose until your account balance is zero.
  • Payments continue until all interest and principal have been paid out.
  • The current interest rate is payable for the calendar year, and may change annually, as determined by Northwestern Mutual.
  • It will never be lower than the guaranteed minimum rate specified in your contract.
  • Interest that exceeds your guaranteed rate will be used to extend your payment period.
  • Withdrawals or transfers of your remaining funds can be made free of charge.

Life Income Plans
Northwestern Mutual has life income plans with two payment options. For either case, withdrawals or transfers are not allowed once payments have started.

Lifetime Only Plan
Guarantees payments for life. Payments stop upon your death.

Lifetime with a Certain Period Plan
Guarantees payments for life. You have the option of guaranteed payments for 10 or 20 years, or until all of the amount you originally invested is paid out. If you die before the guaranteed payment period ends, payments will continue to your beneficiary for the remainder of the guaranteed period.

Joint & Survivor Life Income Plans
Northwestern Mutual has Joint & Survivor Life Income Plans that provide a monthly payment based on the lifetimes of two people.

Joint Life 100% to Survivor (full amount to survivor)
Receive guaranteed payments for your lifetime, the lifetime of the joint annuitant, or for the period you choose, whichever is latest. Upon the death of the first to die, the payments continue and are payable to the survivor. Income plan transfers or withdrawals are not available.

Joint Life with Two-Thirds to Survivor
Receive guaranteed payments for your lifetime or the lifetime of the joint annuitant for the period you choose, whichever is latest. Upon the death of the first to die, payments reduce to two-thirds (2/3) of the payment and are payable to the survivor. Income plan transfers and withdrawals are not available.

Joint Life with One-Half to Survivor
Receive guaranteed payments for your lifetime or the lifetime of the joint annuitant for the period you choose, whichever is latest. Upon the death of the first to die, the payments reduce to one-half (1/2) of the payment and are payable to the survivor. Income plan transfers or withdrawals are not available.

Joint Life with Two-Thirds to Joint Annuitant
Receive guaranteed payments for your lifetime or the lifetime of the joint annuitant for the period you choose, whichever is latest. Upon the death of the first to die, payments reduce to two-thirds (2/3) of the payment and are payable to the joint annuitant if living, otherwise to the contingent beneficiary for the balance of the period you chose. Income plan transfers or withdrawals are not available.

Joint Life with One-Half to Joint Annuitant
Receive guaranteed payments for your lifetime or the lifetime of the joint annuitant for the period you choose, whichever is latest. Upon the death of the first to die, payments reduce to one-half (1/2) of the payment and are payable to the joint annuitant if living, otherwise to the contingent beneficiary for the balance of the period you chose. Income plan transfers or withdrawals are not available.

Who to Consult
Decisions concerning a fixed income plan should be made within the scope of your total financial situation, your tolerance of investment risk and return potential, and with the guidance of your representative or tax advisor.

Learn About Modified Endowments (MEC's)

What is a Modified Endowment Contract (MEC)?
The primary purpose of life insurance has always been to help solve the financial needs caused by premature death. Because of its social value, the law has historically given preferential tax treatment to life insurance – cash value grows tax deferred, lifetime distributions are treated as a nontaxable return of basis first and then as taxable gain, loans are not taxed when taken and death proceeds are generally received income tax free to the beneficiary.

A MEC is a heavily funded life insurance policy which is taxed as an annuity in certain situations. A MEC does not receive all of the tax preferences of life insurance.

As with traditional life insurance, the cash value build up of a MEC is tax deferred and the death benefit is income tax free. However, any loans or withdrawals from a MEC will be taxed at the time of withdrawal to the extent of the gain in the policy and may also be subject to a 10% penalty tax.

Should I purchase a life insurance policy which is a Modified Endowment Contract?
That depends on the reasons you want to purchase the life insurance policy. If your primary concern is to protect your beneficiaries from your premature death, the MEC status will probably have little effect. The two major tax advantages remain in place. The cash value will still grow tax deferred and your beneficiaries will still receive the death proceeds income tax free. In addition, payments received under a payment plan will still be taxed on a pro rata basis. However, if you plan to take lifetime distributions (including loans) from the policy, a MEC may not be appropriate.

What constitutes a distribution for Modified Endowment Contract for tax purposes?
Distributions that are taxable include: policy loans, premium loans (paid from the cash value), assignments as collateral for loans, dividends used to repay loans or loan interest, dividends received in cash, and partial and full surrenders of the policy for cash.

Distributions do not include dividends used to reduce premiums or purchase additional coverage and surrender of paid up additions to pay premiums.

What is the difference between the taxation of distributions from non Modified Endowment life insurance policies and distributions from Modified Endowment Contracts?
Distributions from the non MEC life insurance policies are taxed basis first, gain second, while distributions from a MEC are taxed gain first, basis second. The order in which basis is withdrawn is important because basis is not taxable. The following example illustrates the difference.

Assume a policy has a cash value of $10,000 composed of $4,000 of nontaxable basis and $6,000 of taxable gain and a $7,000 distribution is taken. Because a non MEC life insurance policy is taxed basis first, gain second, only $3,000 of the distribution ($7,000-$4,000 (basis)) would be taxed if the policy were a life insurance policy. However, because a MEC is taxed gain first, basis second, $6,000 of the distribution (the entire gain) would be taxed if the policy were a MEC. An additional 10% penalty tax could also apply to the $6,000 of taxable gain, if the policyowner was under age 59½.

What if I want to use the cash value of my Modified Endowment Contract to supplement my retirement income?
The contract may still work to your advantage. Withdrawals will still be taxed gain first but will not be subject to the additional 10% penalty tax if taken after you attain age 59½. Payments taken under a settlement option will be taxed on a pro rata basis and will also not be subject to the 10% penalty tax if taken over your lifetime or after you attain age 59½.

What happens if I become disabled and need to use the cash value of my Modified Endowment Contract?
You’ll pay income tax on the gain. However, you will not be charged the 10% penalty tax on amounts taken out during your disability if you meet the tax law definition of disability.

I may need part of the cash value for my children’s college tuition or for emergencies. Should I avoid a Modified Endowment Contract?
If, as the owner of the contract, you will need to withdraw part of the cash value before you are 59½, you should avoid a Modified Endowment Contract. You will be taxed on any withdrawals to the extent of the gain in the contract and you will be charged an additional 10% penalty tax on the taxable portion of any withdrawal.

How do you determine if a policy is a Modified Endowment Contract?
The tax law has established a “7 pay test” which limits the amount of premiums that can be paid for a specified amount of life insurance coverage. If this limit is exceeded, the policy will be classified as a MEC. Prior to issuance, the 7 pay test is applied to determine if the policy, as applied for, will be classified as a MEC at issue or at any time in the future.

Can a traditional life insurance policy become a Modified Endowment Contract?
Yes. A change to a traditional life policy which results in either an increase in premiums, or an increase or reduction in the insurance coverage, may cause the policy to fail the 7 pay test or to be retested for MEC status. For example, if within the first 7 years a policy is partially surrendered or lapses to a reduced amount of paid-up insurance, (and is not reinstated within 90 days), the test is applied to determine if premiums paid have exceeded the limit for the reduced coverage. If it has, the policy is reclassified as a MEC.

How can I prevent my policy from becoming a Modified Endowment Contract?
If testing shows that your policy will be classified as a MEC, you will be notified and given the opportunity to make changes to avoid MEC status.

Check with your Northwestern Mutual Financial Representative to see if the best option for you is to pay a lower premium and maintain your coverage, or to maintain your premium and increase your insurance coverage. To reverse MEC status caused by a premium payment in excess of the pay limit, the excess premium must be withdrawn with interest within 60 days of the following policy anniversary. To reverse the MEC status caused by a lapse, the policy must be reinstated within 90 days of the date the premium is paid to at lapse. The choice you make should depend on your need for life insurance coverage.

However, once the cure periods have expired, it may not be possible to undo the MEC status.

Learn About Settlement Notices
NOTICE TO KENTUCKY, MAINE AND WASHINGTON POLICYOWNERS
If your life insurance policy is in danger of lapsing, please review the brochure specific to your state of residence, by clicking on one of the links listed below. These brochures detail important information about alternatives to allowing your policy to lapse.
Learn About Variable Settlement Plans

Variable income plans can only be used to settle variable annuity proceeds. On the one hand, variable plans offer you the potential to benefit from market gains. On the other hand, you also assume the investment risk.

Variable plans do not offer a guaranteed payment amount. Payment amounts depend on the performance of the Northwestern Mutual variable investment fund(s) you select. You can choose to receive all or part of your proceeds under a variable income plan. Other plans may be available that offer a combined variable and fixed plan.

Types of Variable Settlement Plans
Northwestern Mutual offers three types of variable settlement plans:

Period Certain
Receive monthly payments for the period you choose in amounts that vary due to market fluctuations. Transfers to other available income plans of the entire value may be made without charge. Withdrawals of the entire value may be made but charges may apply if the withdrawal is made less than five years after the income plan takes effect. Withdrawal changes vary by contract series. Time period 5 to 30 years.

Single Life Income Plan
Receive monthly payments in amounts that vary due to market fluctuations for the annuitant's lifetime or the period you choose, whichever is later. No withdrawals or income plan transfers are permitted. Time period 0 to 20 years.

Joint and Survivor Life Income Plan
Receive principal and earnings in monthly payments that continue as long as you or your joint annuitant is living. Withdrawals from this plan are not allowed during the lifetime of both annuitants. This plan offers five options:

  • Joint Life 100% Survivor
    Receive monthly payments in amounts that vary due to market fluctuations for the annuitant's lifetime, the lifetime of the joint annuitant, or for the period you choose, whichever is latest. Upon the death of the first to die, payments continue and are payable to the survivor. No withdrawals or income plan transfers are permitted. Time period is 0 to 20 years.
     
  • Joint Life with Two-Thirds to Survivor
    Receive monthly payments in amounts that vary due to market fluctuations for the annuitant's lifetime, the lifetime of the joint annuitant, or the period you choose, whichever is latest. Upon the death of the first to die, payments reduce to two-thirds (2/3) of the monthly payment and are payable to the survivor. No withdrawals or income plan transfers are permitted. Time period is 0 to 20 years.
     
  • Joint Life with One-Half to Survivor
    Receive monthly payments in amounts that vary due to market fluctuations for the annuitant's lifetime, the lifetime of the joint annuitant, or the period you choose, whichever is latest. Upon the death of the first to die, payments reduce to one-half (1/2) of the monthly payment and are payable to the survivor. No withdrawals or income plan transfers are permitted. Time period is 0 to 20 years.
     
  • Joint Life with Two-Thirds to Joint Annuitant
    Receive monthly payments in amounts that vary due to market fluctuations for the annuitant's lifetime, the lifetime of the joint annuitant, or the period you choose, whichever is latest. Upon the death of the annuitant, payments reduce to two-thirds (2/3) of the monthly payment and are payable to the joint annuitant, if living, otherwise to the contingent beneficiary. No withdrawals or income plan transfers are permitted. Time period is 0 to 20 years.
     
  • Joint Life with One-Half to Joint Survivor
    Receive monthly payments in amounts that vary due to market fluctuations for the annuitant's lifetime, the lifetime of the joint annuitant, or the period you choose, whichever is latest. Upon the death of the first to die, payments reduce to one-half (1/2) of the monthly payment and are payable to the joint annuitant, if living, otherwise to the contingent beneficiary. No withdrawals or income plan transfers are permitted. Time period is 0 to 20 years.

Who to Consult:
Decisions concerning a variable income plan should be made within the scope of your total financial situation, your tolerance of investment risk and return potential, and with the guidance of your representative or tax advisor.

For Variable Payment Plans: This description contains a partial summary of contract provisions which are explained more completely in the prospectus.

Premium Payments

Paying premiums keeps your insurance policies in force and ensures your beneficiaries will receive the level of protection you planned for them.

Paying premiums has other advantages. It builds tax-deferred cash value, which provides money for emergencies, your children's education, a dream vacation or supplemental retirement income.

Ways to Pay Your Premiums
Northwestern Mutual offers four easy ways to pay your premium.

  • Automatic withdrawal
    Automatic withdrawal, often called Electronic Funds Transfer (EFT), is the quickest, most convenient way to pay your premiums. Just tell us what checking or savings account you want the money to come from, and how often you want to pay. You can pay your premiums monthly, quarterly, every six months or once a year. To pay by automatic withdrawal, log on to ‘Access Your Accounts,’ select ‘Billing Account,’ and complete the Automatic EFT Payments Form. You must have a Billing/Payment Account in order to make payments via Automatic withdrawal.

  • Online payments
    Northwestern Mutual's Online Payment option is safe, secure, and available 24/7. You have the ability to schedule one-time EFT payments from your checking or savings account. Online payments can be scheduled in advance with the effective date you select, up to the due date. To pay online, log on through 'Manage Your Accounts' and select 'Pay Online.' You must have a Billing/Payment Account in order to access the Pay Online feature.

  • Direct billing
    Northwestern Mutual sends you a billing notice in the mail. If you have several policies with Northwestern Mutual, you can have them placed on one bill using a Billing/Payment Account.

    Note: A separate Billing/Payment Account is required for variable products and annuity products.

  • Electronic Payment Services
    Not to be confused with EFT, these are outside electronic bill payment services such as MSMoney, Quicken or your bank. Northwestern Mutual still bills you directly, but you instruct the outside service to pay. An electronic payment service arrangement is an agreement between you and the provider of the service. Unlike EFT, where Northwestern Mutual draws the amount for the payment on the day it is due, you are responsible for coordinating the payment amount, date and payee with the service.
     
    Tip: When paying through an electronic payment service, use your Billing/Payment Account or policy number. If the service does not ask you to enter your first and last name separately, enter your last name first.

When You Don't Pay Your Premiums
If your premium payments are not automatically withdrawn from your bank account, Northwestern Mutual should receive payment by the due date on your bill. If the insured person dies during the grace period, the unpaid premium is deducted from the death benefit.

If your premium is not paid within the grace period and your policy has built cash value, you may be able to take advantage of your policy's nonforfeiture option which you selected at the time of policy issue. These options pay your premium and keep your policy in force for a specified time. Policies that do not have cash value, such as term insurance and disability insurance, will lapse when the grace period expires.

Available Options

  • Automatic Premium Loan (APL)
     Any unpaid premium is automatically paid with a premium loan at the end of the grace period. Premium loans accrue interest according to the rate in your policy.
     
  • Extended Term Coverage
    Your policy's cash value is used to purchase term insurance that is equal to the face amount of your existing policy. If you do not resume payment of your premiums, your policy will terminate at the end of the term insurance period and will not have any value. This option applies only to whole life policies, excluding Variable CompLife.
     
  • Paid Up Contract
    If your contract is paid up, you do not need to make future premium payments to retain coverage. Limited-pay policies become paid up after the required number of premiums have been paid. The term also refers to the end result of a non-forfeiture option that causes a policy to convert to a smaller, but still participating, completely paid up policy.

Changing Bank Names/Payment Date
To change the date the premium is automatically withdrawn from your bank, or to let us know you have changed banks:

  • Contact your Northwestern Mutual representative
  • Northwestern Mutual directly at 1-800-388-8123, 7 a.m. to 6 p.m. CT, Monday through Friday

To change the payment date, you will need to provide:

  • Your name
  • Your Billing/Payment Account or policy numbers
  • Your bank account number
  • The current date of your automatic withdrawal
  • The new date of your automatic withdrawal

To change the bank where payments are withdrawn:

  • Your name
  • Your Billing/Payment Account or policy numbers
  • Your bank transit/routing number
  • Your new bank account number
  • The name of your new bank
Receive One Bill for Multiple Policies

If you have several policies with Northwestern Mutual, you can save time and energy by opening a Billing/Payment Account.

With an Billing/Payment Account you can:

  • Consolidate premiums from two or more insurance policies. Payments for up to 15 policies can be combined on one bill.
     
  • Make regular installment payments on loans or policies.
     
  • Pay premiums by automatic withdrawal (Electronic Funds Transfer) from your checking or savings account.
     
  • Pay premiums online with Northwestern Mutual's secure online payment option.
     
  • Pay premiums on a convenient schedule, monthly, quarterly, semi-annually, or annually.
     
  • Earn interest on any additional funds that accumulate in your Insurance Service Account.* (Billing/Payment Account Plus only)

Note: A separate account is required for variable products and annuity products.

*A variable Insurance Service Account cannot accumulate surplus and therefore cannot earn interest.

To sign up for an Billing/Payment Account Plus:

  • Call your Northwestern Mutual representative
     
  • Contact Northwestern Mutual directly:
     
    • Telephone: 1-800-388-8123, 7 a.m. to 6 p.m. CT, Monday through Friday
       
    • Fax: 414-625-1205
Request Technical Support

What should I do if I can't remember my user id or password?
Call us toll-free at 1-800-388-8123, 7 a.m. to 6 p.m. CT, Monday through Friday. Upon verifying contract information, we can give you the user id, and provide you with a new, temporary password. The next time you access your policy information enter the temporary password and change it immediately to a new password.

You can also reset your password online.

What will happen if I enter the wrong password?
For security reasons, after three tries you will be locked out of your account. Please try again later. Your password is case sensitive. Enter your password exactly the way you saved it with the correct upper and lower case letters. Check to see if you have activated your CAPS LOCK key. Turn off CAPS LOCK and enter your password again.

How do I clear incorrect login information from the system?
Your browser may have cached (stored on your hard drive) the incorrect information and is not sending your new information to the server. Close your browser and disconnect from your Internet Service Provider. Wait about ten seconds and reconnect to the Internet. Open your browser and go back to the site. Reenter your login information.

Why do I get these error messages?

"We are unable to display your policy values at this time."
Customers who come to our site from a bookmark will sometimes get this message. A connection has failed in relation to the bookmark. Enter in the address field of your browser the URL for our site instead of using the bookmark.

"We are unable to provide you with contract information."
This message displays when someone other than the owner of a policy attempts to view policy information. If you are the payer or the insured of a policy but not the owner, you will not be given access to the policy information.

Why can't I view my policy statements after I've logged in?
To view policy statements, you will need the free  Adobe Acrobat Reader®. Adobe, the Adobe logo and Acrobat are trademarks of Adobe Systems Incorporated.

What can I do to see all of my values when I print my statement?
If you print your statement and the right-hand side of the page has missing values, there is a simple change you can make to your system to resolve this. Within your operating system, select a display setting of at least 800 x 600 pixels. Browse to your statement and select File and Print within your browser's menu at the top of the page. Next, change the print orientation to Landscape and your statement will print correctly.

Submit a Death Claim

The loss of a loved one places a tremendous emotional burden on the surviving family members. That's why we've made our life insurance claim service quick and straightforward.

We'll tell you what settlement options you have for the proceeds and the steps you need to take.

Report the Death
Complete and submit the Report of Insured's Death form or notify your Northwestern Mutual financial representative. Information and forms will be provided to the beneficiary of record or the beneficiary's representative that will guide them on how to process the death claim.

If you are making an inquiry to determine if a deceased family member had coverage at Northwestern Mutual please contact us by phone at (800) 388-8123 or by fax (414) 625-9000.

Policy Proceeds
Proceeds are payable to the beneficiary upon the death of the insured, as stated under the terms of the life insurance policy.

Beneficiaries can receive proceeds several ways:

  • The beneficiary can receive the proceeds in a single check.
  • The beneficiary can choose from several other settlement options.

Settlement Plans
There are several kinds of settlement choices available to beneficiaries, including lump sum, interest income, period certain for a set number of years, life income plan or a Joint Life income plan. Our plans are designed to provide flexibility allowing you to preserve benefits while earning interest; receive income over a specified period, or receive income over a lifetime. Choices are subject to availability and can be discontinued at any time. Plans are subject to individual contracts and market types.

The settlement choice selected should be based on an individual’s financial circumstances, risk tolerance and return potential.

Planning Your Future
Northwestern Mutual offers the following guides to assist you in gathering personal information for planning for your future.

Download "A Guide for the Future" Download "Beneficiary Checklist"

Get tips for locating a missing policy from The American Council of Life Insurers.*

*When you access this site, you will be leaving our site. Northwestern Mutual is not responsible for the accuracy of information on third-party sites. Reference to another site is for informational purposes only. Please review this site carefully, some services offered at this site charge a fee. Northwestern Mutual receives no remuneration for the website link in this article.

Submit a Waiver of Premium Claim

If you have been disabled for at least six months due to an accident or illness, and you purchased the waiver of premium benefit on any of your life insurance or annuity policies, you may be able to suspend payment of your premiums on these policies.

To notify Northwestern Mutual of a disability,

  • Complete the File a Disability Claim form
    or
  • Call Northwestern Mutual at 800-748-9493, ext. 6612016, 7:00 AM to 5:30 PM CT, Monday through Friday

We will mail you a personalized claim kit within two business days of receiving your notification of disability. The kit contains forms and instructions you will need to file your claim.

If you also have disability policies, one notification begins the claim process for both your disability income insurance and the waiver of premium benefit.

Premiums Payments During the Claim Process
In order to protect your policy rights, you should continue to pay premiums on all of your Northwestern Mutual policies until your disability claim is approved.

After your claim has been approved, we will refund any premiums paid on any insurance policies with the waiver benefit back to the date of disability as determined during the review of your claim.

These premiums will be refunded to the premium payer.

Surrender a Policy

When you surrender a policy, you agree to receive the accumulated value of the policy. You can either receive it in one lump sum or in regularly scheduled payments over a specific period of time. The frequency and amount of the payments are determined by the settlement plan you select.

Surrendering a policy could have tax or financial implications. Consult your Northwestern Mutual representative or tax adviser to determine if surrendering a policy is right for your financial situation.

Some policies will incur a surrender charge to cover administrative costs. See your policy provisions for details.

Also see: Settlement Plans

Contact Northwestern Mutual

  • Personal Insurance & Investments:

    1-866-950-4644

  • Business Insurance:

    1-888-244-2295

We are available 7:00 am to 6:00 pm, central time, Monday through Friday (excluding holidays).