Northwest Mutual pays dividends to their policyholders each year, in the way of reduced annual premiums.
I'd like to find out what the actual amount (or %) the company has paid each year, over the past 5 years.
Can anyone help me with that?
Arthur

I'd be interested too....as I've been told that NWML is one of the most expensive LTC plans out there. Maybe "money back with your purchase" is part of the gig.

Yankee,
It is part of the sales presentation. I'm dealing with a couple 57 & 61 who's looking at NWM. They're considering a 6 yr. benefitt period @ $250/day, 5% Cmp and a 90-day EP and they were quoted $11,000/yr.

They can get the same from a number of other top-rated carriers in NY at $3,000-$5,000 less. NWM offers a "good" policy, not great.

When they asked their NWM agent how much of a dividend their policyholders received last year, he hedged and wouldn't (or couldn't) answer the question.

I did some research and found out that NWM has been selling LTCI since 2002 and 2007 was the first year that LTC policyholders received a dividend.

Hopefully, someone out there has the information.
Arthur

Northwest Mutual Life said that it expects to pay a record dividend of $4.27 billion to policyholders in 2006, a $360 million increase compared with the year before.

The board of trustees of the Milwaukee-based insurance and financial services firm approved the dividend payout Monday. The company will also continue to pay a dividend interest rate of 7.5 percent on unborrowed funds on most permanent life insurance policies for the second straight year.

"Sharing the company's surplus and gains with policyowners is a fundamental element of being a mutual company," said Edward Zore, president and CEO of Northwestern Mutual.

About 98 percent of the company's 3.9 million participating permanent life insurance policies that received a dividend in 2005 are expected to receive a larger dividend in 2006.

The 2006 dividend payout also includes a $96 million in individual disability insurance dividends, up $23 million compared with 2005, and $23.6 million in dividends on individual term life insurance policies issued from 1983 to 1995.

The company credits excellent operating fundamentals, including 96 percent persistency rate, and outstanding investment performance for enabling the record payout. Persistency is the rate of policyholders who maintain their business.

"In addition to strong operating fundamentals, the company's long-term investment strategy and portfolio diversification with a greater allocation to equities than others in the U.S. industry continue to benefit the company and policyowners in the current low interest rate environment," Zore said.

Sounds to me like all the dividends go to the life insurance owners.

As a mutual company, Northwestern can pay dividends and started that in 2007. Dividends totaled $3.9 million in 2007 and will increase to $6 million this year. About half of the company's long-term care insurance customers are eligible for the dividend, which reduces their premium payments by 8 percent to 25 percent, Holahan said.

Wonder which half gets the dividend?

Yankee,
This was part of an article from the Business Journal of Milwaukee:

NORTHWESTERN MUTUAL LONG TERM CARE INSURANCE

Headquarters: Milwaukee
Policyholders: 77,000
Direct premiums earned 2007: $150 million
New long-term care premiums 2007: $36 million
Assets 2006: $217.1 million
Liabilities 2006: $158.8 million
Dividends paid 2007: $3.9 million
Dividends to be paid 2008*: $6 million
* Projected figures
Source: Northwestern Mutual and National Association of Insurance Commissioners

Now, I'm not a math wizard, but if you look at the numbers, you come up with the following:

1) 77,000 policyholders in 2007
2) Dividends paid in 2007 to LTC policyholders: $3.9 million

My calculations come up with an average dividend per policyholder of $50.60. If they have 100,000 policyholders at the end of 2008 (and that may be a stretch) $6.0 million of dividends works out to $60.00 per policyholder.

I have no idea where they come up with a dividend that reduces a policyholder's premium by 8%-25%.

I also read that their average LTC premium was $1,560. At 8%-25%, that works out to $124.80- $390.00 per policyholder.

Either way, that's a far cry from justifying an $11,000 premium for a couple who could purchase a better policy at $3,000-$5,000 less.

Any NWM agents out there have have anything to say on this?
Arthur

I may be wrong, but I am guessing the ultimate lack of response will speak volumes.

NWML will likely be the last one able to say they have never raised their rates because they charge so much in the first place they will never have to...and if push comes to shove, they will just cut the dividend to make up for it.

11/03/2008 - Massachusetts Mutual Life Insurance Company (MassMutual) today announced it has approved the payment of approximately $1.35 billion in dividends to eligible participating policyholders in 2009. The total approved payout for 2009 reflects a dividend interest rate of 7.60 percent on new eligible participating life insurance policies(1).

I saw no mention of anything going to LTC policy holders in this announcement. Maybe there is a separate pool?