Compare New York Life vs. Northwestern Mutual Life Insurance

When judging a life insurance carrier's overall offerings we look at the main factors of financial strength, customer experience, policy options, and policy flexibility.

As two of the largest, well-known, and oldest financial firms in the world, Northwestern Mutual and New York Life are fairly evenly matched across most of the factors.

Both companies have identical financial strength ratings (FSR), and similar scores when it comes to customer experience and policy options.

They are also similar in terms of flexibility, as New York Life only offers slightly more robust options for policy riders and optional features.

Interestingly, it's a bit more difficult to ascertain exact policy details Northwestern Mutual offers, this includes things like term lengths, coverage amounts, and age limits.

In terms of reputation and customer experience, both companies have similar reputations with the BBB, although Northwestern Mutual has a remarkably low NAIC complaint ratio given the company's size and market share. 

Financial strength is of the utmost importance when ranking life insurance carriers.

Put simply, term, and particularly whole life insurance policies, are investments that stretch far into the future.

Customers are relying on a guaranteed payout in order to assist their loved ones they are leaving behind.

In the case of term life, policyholders need to be sure the provider will be able to pay the policy value for whatever the selected term is, usually in the neighborhood of 10-30 years.

Customers generally select a time frame that will cover them for the years they are earning income and would be expected to carry the finances of the family.

Whole life insurance is an even longer term investment as it is designed to pay out regardless of time frame. Policyholders also rely on whole life policies for things like estate planning and retirement income. 

Therefore, it is essential to consider the creditworthiness and claims paying ability of a given company. As far as financial strength goes, Northwestern Mutual and New York Life are some of the highest rated companies by Standard and Poor's, Moody's, and A.M. Best, each having identical grades from all three agencies. 

To judge reputation and customer experience of a given life insurance carrier we look at a few factors.

First, we use the National Association of Insurance Commissioners (NAIC) yearly complaint ratio. This is based on information gathered by the NAIC that spans providers in most of the different categories of insurance in the US.

Some of these include life, accident, health, and property & casualty. The individual state insurance departments compile the complaints against any given carrier for the year and voluntarily hand the data over to the NAIC.

The NAIC then gathers and codes the information, making it available to the public through a variety of reports.

The one we use is the closed complaint ratio report. This report compares the company's share of closed complaints by premium type to the company's overall US market share, effectively levelling the playing field and assigning the company a score based on the amount of complaints considering its size.

This is essentially a "complaint share." The scale goes from 0.0-2.0, with 1.0 being the national average for insurance company complaints. 

Northwestern Mutual and New York Life both have a below average complaint ratios for 2017, at .03 and .2 respectively.

This is very good for both companies given their size and significant market share, but Northwestern Mutual in the end has the superior score. 

Both organizations have an A+ score with the Better Business Bureau, but they are both unaccredited as well.

Northwestern Mutual, however, seems to have engaged a bit more with their complaints online, reaching out to the complaint filers and attempting to resolve billing and customer service issues. 

When assessing the breadth of policy offerings for a given life insurance carrier, we look at a set of attributes that describes the types of policies, as well the policy features.

It is important to note here that the life insurance business is rapidly changing. Because of the internet there are many new players that offer an entirely digital process where customers do not have to deal directly with agents or other salespeople.

These companies, however, typically can only offer a straight term policy and lack the customization options and riders of traditional life insurance.

New York Life and Northwestern Mutual are longstanding firms that are going to be able to provide a great deal of options and flexibility when it comes to choosing policies.

Both carriers can provide term life, whole life, and various permutations of universal life. Both also offer features like term to permanent conversions, guaranteed level premiums, and guaranteed renewability.

New York Life is more forthcoming, however, about policy details like term lengths, age limits, and coverage amounts. 

Northwestern Mutual and New York Life are more or less evenly matched when it comes to policy riders.

Each carrier offers useful options like term to permanent conversions, guaranteed level premiums, disability income rider, and child protection rider.