Northwestern Mutual Bad option?

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N10sive
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Northwestern Mutual Bad option?

Post by N10sive » Thu May 05, 2016 6:27 pm

Hello,

I am pretty new to financial planning and was recently referred by a friend to use Northwestern Mutual as my financial planner. They have been super nice and responsive. I have since opened a 500k insurance policy 420k of it term and 80k of it whole life. I have also started a disability plan along with opening a Roth.

My company doesn't do any matching and my current 401k is with principal which NWM said they charge high fees every quarter( i do see the charges). I have done some reading and it seems NWM is not though of as the greatest company to go with. Is this true?

As for people saying I pry don't need disability since my company offers it, it is not too much for the policy and I do a lot of the more "extreme" sport activities which could always leave me unfit to do my job.

Thanks for the help,

N10sive

Elbowman
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Re: Northwestern Mutual Bad option?

Post by Elbowman » Thu May 05, 2016 7:18 pm

Yes, for investing it is a bad option. Whole life is a bad option from anyone. Stop working with the NWM financial planner (for investing at least), they already have and will presumably continue to steer you towards bad investments that make them the most money.

The fees from a 401k have to be really bad to outweigh the tax benefits. If you post the details here you can get an unbiased (and frankly more knowledgeable) opinion. Its best if you fill out this template: viewtopic.php?f=1&t=6212 . It may be a hassle to get some of the 401k information (expense ratios are key!) but it will be worth it.

OakPhilliesFan
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Re: Northwestern Mutual Bad option?

Post by OakPhilliesFan » Thu May 05, 2016 7:35 pm

Agreed that you don't need whole life. Not sure what you're paying for term life, but you can check term4sale to compare prices.

I recently investigated Northwestern Mutual for disability insurance and was not very impressed by their offerings. As far as I can tell, the best providers are Principal, Guardian, Standard, MetLife, and Ameritas. If you find an independent agent, they can compare for you.

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LowER
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Re: Northwestern Mutual Bad option?

Post by LowER » Thu May 05, 2016 8:08 pm

I am not trying to be snarky, at all. Please search this site for many dozens of poor souls trying to emancipate themselves from NWM. You might find a few replies by me that nearly mirror your experience with a very nice and charming and well dressed NWM salesman and absolutely horrific fees, for me at least. That experience catapulted me into many hundreds of hours of reading books and delving into this site and other resources. Luckily I was circumspect going in (by dumb luck at the time) and didn't have huge losses, but the fees were outrageous, for me at least.

I remain grateful for the NWM experience.

The whole life policy may need to be racked up to tuition in the school of hard knocks. This sounds inappropriate for anything other than lining your nice NWM salesman's pockets.

You are not alone, but you are in the right place. This site provides almost universally altruistic, knowledgeable, and unbiased advice. Many more will chime in with more specifics.

One suggestion: check out firecalc.com and play with the "fees" variable which will illustrate how much the NWM fees will delay your retirement compared to Vanguard or Fidelity Spartan or Schwab, or..... For me it was eye opening, very, very eye opening.

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Taylor Larimore
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"Debunking the myths of whole life insurance"

Post by Taylor Larimore » Thu May 05, 2016 8:20 pm

N10sive:

This article by the highly regarded White Coat Investor may be helpful:

Debunking the myths of whole life insurance

Best wishes.
Taylor
"Simplicity is the master key to financial success." -- Jack Bogle

gwrvmd
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Re: Northwestern Mutual Bad option?

Post by gwrvmd » Thu May 05, 2016 8:32 pm

My, my, my. Northwest Mutual Insurance says Principal Insurance charges high fees. I think I vaguely remember something about a pot calling a kettle black......Gordon
Go to insurance companies for insurance not investments or you will get insurance that they call investments
Disciple of John Neff

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White Coat Investor
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Re: Northwestern Mutual Bad option?

Post by White Coat Investor » Thu May 05, 2016 11:37 pm

N10sive wrote:Hello,

I am pretty new to financial planning and was recently referred by a friend to use Northwestern Mutual as my financial planner. They have been super nice and responsive. I have since opened a 500k insurance policy 420k of it term and 80k of it whole life. I have also started a disability plan along with opening a Roth.

My company doesn't do any matching and my current 401k is with principal which NWM said they charge high fees every quarter( i do see the charges). I have done some reading and it seems NWM is not though of as the greatest company to go with. Is this true?

As for people saying I pry don't need disability since my company offers it, it is not too much for the policy and I do a lot of the more "extreme" sport activities which could always leave me unfit to do my job.

Thanks for the help,

N10sive
Another day another investor who has mistaken a NML insurance agent for a financial advisor. I sure like it better when they come here and ask for help BEFORE purchasing a life insurance policy that might work out okay if held for their entire life.

Here's the worst part- even the term policy is lousy. You paid too much for term, they sold you a policy you almost surely don't need (the whole life) and they didn't even give you any good advice like max out a Roth IRA at Vanguard.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

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LowER
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Re: Northwestern Mutual Bad option?

Post by LowER » Fri May 06, 2016 12:01 am

White Coat Investor wrote:
N10sive wrote:Hello,

I am pretty new to financial planning and was recently referred by a friend to use Northwestern Mutual as my financial planner. They have been super nice and responsive. I have since opened a 500k insurance policy 420k of it term and 80k of it whole life. I have also started a disability plan along with opening a Roth.

My company doesn't do any matching and my current 401k is with principal which NWM said they charge high fees every quarter( i do see the charges). I have done some reading and it seems NWM is not though of as the greatest company to go with. Is this true?

As for people saying I pry don't need disability since my company offers it, it is not too much for the policy and I do a lot of the more "extreme" sport activities which could always leave me unfit to do my job.

Thanks for the help,

N10sive
Another day another investor who has mistaken a NML insurance agent for a financial advisor. I sure like it better when they come here and ask for help BEFORE purchasing a life insurance policy that might work out okay if held for their entire life.

Here's the worst part- even the term policy is lousy. You paid too much for term, they sold you a policy you almost surely don't need (the whole life) and they didn't even give you any good advice like max out a Roth IRA at Vanguard.
The worse my mistakes, the better I learn. This seems like a great mistake early in life. Feel lucky N10sive, and learn. If you are an intensivist, it's time to prove your smarts to yourself, not your rounding team. This is the corollary site of ACCP guidelines for not-for-profit data-backed and evidence-based investing.

N10sive
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Re: Northwestern Mutual Bad option?

Post by N10sive » Fri May 06, 2016 11:15 am

Dave81 wrote:Agreed that you don't need whole life. Not sure what you're paying for term life, but you can check term4sale to compare prices.

I recently investigated Northwestern Mutual for disability insurance and was not very impressed by their offerings. As far as I can tell, the best providers are Principal, Guardian, Standard, MetLife, and Ameritas. If you find an independent agent, they can compare for you.
So I just tried term4sale and for a 500k to 65 guaranteed there are no quotes. I believe that is the policy I have (420k since 80k is whole life). My policy is $16 a month for term, $101 for whole life, and 34 for disability.

I guess the big thing that steered me to whole life was the thought that it acted like a guaranteed savings plan later in life. Ive just finished reading the whitecoatinvestor link and looks like I have a lot more questions!

Anyways for the roth I opened up I can roll that over into another roth yes?

BW1985
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Re: Northwestern Mutual Bad option?

Post by BW1985 » Fri May 06, 2016 11:36 am

I'm so glad I found BH's before the Northwest Mutual Salesman came knocking. Once I told him I wasn't interested in whole life and asked him if he would be willing to act as a fiduciary on my behalf suddenly my phone stopped ringing. :sharebeer
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

N10sive
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Re: Northwestern Mutual Bad option?

Post by N10sive » Fri May 06, 2016 12:00 pm

Also looking into the vtmfx fund which has been highly suggested on this site. Is there a fee if you go with vanguard to manage it? Sorry for the stupid question but I have a scotttrade account and looked it up. You need an investment advisor which i assume will cost fees through scottrade.

Anyways what is the opinion on scottrade helping me with my financial planning? Or should I just look into vangaurd and call it good? Just wondering since I already have an account with scottrade for some individual stock purchases I have been playing around with for the past two months. I just don't like having too many accounts spread everywhere.

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mephistophles
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Re: Northwestern Mutual Bad option?

Post by mephistophles » Fri May 06, 2016 12:30 pm

N10sive wrote:Hello,

I am pretty new to financial planning and was recently referred by a friend to use Northwestern Mutual as my financial planner. They have been super nice and responsive. I have since opened a 500k insurance policy 420k of it term and 80k of it whole life. I have also started a disability plan along with opening a Roth.

My company doesn't do any matching and my current 401k is with principal which NWM said they charge high fees every quarter( i do see the charges). I have done some reading and it seems NWM is not though of as the greatest company to go with. Is this true?

As for people saying I pry don't need disability since my company offers it, it is not too much for the policy and I do a lot of the more "extreme" sport activities which could always leave me unfit to do my job.

Thanks for the help,

N10sive
I would recommend first, that you read the chapters on life insurance and disability insurance in our vetted "Bogleheads Guide to Retirement Planning". Written by bogleheads for bogleheads. You can buy the book inexpensively or view much of it for free by googling it.
ole meph

N10sive
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Re: Northwestern Mutual Bad option?

Post by N10sive » Sun May 08, 2016 3:12 pm

Does anyone know if there are any fees associated with canceling these WL insurance policies? I didn't see any in the fine print. Thanks

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mephistophles
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Re: Northwestern Mutual Bad option?

Post by mephistophles » Sun May 08, 2016 10:36 pm

N10sive wrote:Does anyone know if there are any fees associated with canceling these WL insurance policies? I didn't see any in the fine print. Thanks
The cash surrender value in the first few years is probably zero.

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