New York Life and Northwestern Mutual are two of the largest and oldest life insurance companies in the United States. Both offer a wide range of life insurance policies along with other financial products and services.
But there are some key differences between these insurance giants that policyholders should understand.
A Brief Comparison Table
| Category | New York Life | Northwestern Mutual |
| Year Founded | 1845 | 1857 |
| Company Type | Mutual | Mutual |
| Financial Strength Ratings | A++ (Superior) from A.M. Best | A++ (Superior) from A.M. Best |
| Total Assets | Over $600 billion | Over $300 billion |
| Life Insurance Products | Broader selection of participating and non-participating permanent policies; term to age 95 | Streamlined selection of permanent and term policies; term to age 80 |
| IUL Performance | Multiple index options, higher caps for greater upside | One S&P 500 index option, lower caps, chronic illness rider |
| Policy Riders & Features | More riders and guaranteed benefits as standard | Fewer riders available for added cost |
| Underwriting | More flexible with health conditions | Non-medical underwriting available |
| Policy Pricing | Lower cost on term in some cases | Competitive permanent pricing |
| Customer Service | Highly rated for helpful agents and efficient claims | Excellent reputation for service and fast claims payment |
Company Backgrounds
New York Life was founded in 1845 and is currently the 3rd largest life insurance company in the United States. It is a mutual company, which means it is owned by its policyholders rather than shareholders. New York Life has paid dividends to eligible policyholders every year since 1854.
Northwestern Mutual was founded in 1857 and is the 4th largest U.S. life insurer today. Like New York Life, Northwestern Mutual is a mutual company with no shareholders. It has paid dividends to policyholders every year for over 150 years.
So, both companies have long and stable histories with strong financial strength ratings from independent agencies like A.M. Best. New York Life has consistently maintained the highest ratings for financial strength.
Life Insurance Products
New York Life and Northwestern Mutual offer standard permanent life insurance policies like whole life and universal life. They also offer term life insurance, which provides death benefit coverage for a set period of time.
Some key differences in their life insurance product offerings:
- New York Life has a broader selection of permanent policies like interest-sensitive whole life, traditional whole life, and universal life. They offer term policies with level premiums up to age 95.
- Northwestern Mutual’s life insurance lineup is more streamlined with just whole life, universal life, and term insurance. Their term coverage goes up to age 80.
- New York Life may have more flexibility in permanent policy customization through various riders and options. Northwestern Mutual’s policies offer fewer bells and whistles.
- Premiums can vary significantly between the two for the same type of policy, age, and coverage amount. Getting quotes from both is the best way to compare costs.
Financial Strength & Ratings
As mentioned previously, both New York Life and Northwestern Mutual have exceptional financial strength as mutual companies. They have paid out dividends and claims through wars, depressions, recessions, and other challenging times.
Some key ratings and figures:
- New York Life has over $600 billion in assets under management. Northwestern Mutual manages over $300 billion in assets.
- New York Life has the highest ratings for financial strength from A.M. Best (A++), Moody’s (Aaa), Standard & Poor’s (AA+), and Fitch (AAA).
- Northwestern Mutual also holds top ratings from the major agencies but slightly below New York Life. (A.M. Best A++, Moody’s Aaa, Standard & Poor’s AA+)
- Both companies have been in business for over 150 years, demonstrating exceptional long-term financial stability.
The takeaway is that policyholders can feel very confident in the financial backing of these insurance giants. New York Life does appear to maintain a slight edge in financial strength ratings.
Also Read: Differnces Between New York Life And Transamerica.
Indexed Universal Life Performance
Indexed universal life (IUL) insurance is a popular permanent life insurance policy where interest earnings are tied to stock market performance. Both New York Life and Northwestern Mutual offer strong IUL options.
Some differences in their IUL products:
- New York Life offers a wide array of IUL policies to fit different needs and risk tolerances. Their index account options include S&P 500, Russell 2000, EURO STOXX 50, and more.
- Northwestern Mutual has just one IUL policy tied to the S&P 500 index. But the minimum premium is lower at $25k Vs. $50k for NYL’s base IUL.
- New York Life may offer greater upside potential through more index options and a higher cap rate on earnings. Northwestern Mutual’s returns appear more conservative.
- Northwestern also offers a chronic illness rider on its IUL policy at no added cost, which provides access to death benefit while living if certain conditions are met.
For those interested in cash value life insurance, reviewing illustrations for both companies’ IUL policies can show potential differences in long-term performance.
Insurance Riders & Features
Riders that provide additional benefits or flexibility are common add-ons to permanent life insurance policies. Here are some key differences in the riders offered by New York Life and Northwestern Mutual:
- New York Life offers a wider selection of riders like accidental death, disability, waiver of premium, terminal illness accelerated benefit, and more. Many come standard on their universal life policies.
- Northwestern Mutual has fewer riders to choose from but some unique options like their chronic illness rider on IUL policies. Most riders must be added for an additional premium.
- New York Life provides more standard features on their permanent policies, including guaranteed cash values and dividends (on participating whole life policies).
Reviewing policy illustrations and speaking with an agent are the best ways to understand the riders and benefits available from each insurer.
Policy Pricing & Underwriting
Premiums and underwriting requirements can vary significantly between providers. Here are some key considerations when comparing New York Life and Northwestern Mutual:
- New York Life may be more competitive for impaired risk policies based on independent agent feedback. They seem more flexible for health conditions and family history.
- Northwestern Mutual offers non-medical underwriting up to $1 million in coverage for those who qualify through its accelerated process. This allows purchasing a policy without labs or medical exams.
- Term policies tend to be lower cost from New York Life based on sample quotes. Permanent policy pricing is quite variable depending on product and options selected.
- Getting quotes for your specific age, health class, and coverage amount is the best way to compare pricing. An independent agent can provide quotes from both companies.
Overall, New York Life appears to have an edge for underwriting applicants with health issues. Northwestern Mutual may be very competitive for healthy individuals seeking streamlined purchases.
Customer & Claims Service
Both New York Life and Northwestern Mutual have positive reputations for customer service based on policyholder feedback and reviews:
- New York Life gets high marks for friendly agents and smooth application processes. Their claims process is efficient with quick payouts.
- Northwestern Mutual is praised for excellent customer service and fast claims payments. Their agents and support teams are responsive and helpful.
- When problems occur, policyholders with both providers report issues getting resolved promptly by contacting the insurer directly.
Overall, there are minimal differences reported in customer service. Both companies aim to provide a quality experience with helpful agents and efficient support.
Also Read: Choose Between AIG And Pacific Life Insurance.
Frequently Asked Questions (FAQ)
Based on their long histories, financial strength, variety of policies, and customer service, New York Life and Northwestern Mutual are both great choices. New York Life ranks slightly higher in financial ratings and variety of products. But for some, Northwestern Mutual’s more streamlined selection and certain policy features may be preferable. There is no clear-cut “better” option since personal needs and priorities differ.
Yes, Northwestern Mutual has an excellent reputation, high financial strength ratings, competitive pricing, and quality term and permanent life insurance policies.
As a mutual company with over 150 years of history, they have paid dividends to policyholders through all economic cycles. Their simplified selection of policies and strong customer service make them a leading life insurance provider.
New York Life is likely Northwestern Mutual’s biggest competitor when it comes to life insurance. Both are highly-rated mutual companies with over 150 years in business. New York Life has the edge in financial strength and variety of policies offered.
But Northwestern Mutual remains competitive with its quality products, reputable service, and streamlined selection for a great insurance value.
New York Life ranks among the top life insurers in almost every category. They are the 3rd largest life insurance company in the U.S. and have the highest financial strength ratings. Their wide range of term and permanent policies provide options to fit most needs and budgets.
Positive customer feedback and efficient claims processes further demonstrate their leadership in the insurance industry. For overall quality, financial stability, and service, New York Life ranks as one of the best.
Also Read: Comparison Between Transamerica and Fidelity
Also watch the video!
Conclusion
Given their exceptional financial strength, stellar reputations, variety of policies, and customer service, New York Life and Northwestern Mutual are both excellent choices for life insurance:
- New York Life stands out for its superior financial ratings, competitive pricing, variety of permanent and term policies, and positive customer feedback.
- Northwestern Mutual is attractive for its strong dividend-paying history, streamlined selection of policies, chronic illness rider, and reputation for great service.
There are compelling reasons to consider either insurance provider. Working with an independent agent to compare policies and quotes can determine which may be a better fit and value based on your specific needs and budget.
