Northwestern Mutual Disability Insurance is a popular choice for coverage for physicians and medical professionals.
While not one of the Big Five providers that offer a true own-occupation definition for disability, many experts give Northwestern Mutual very high ranks and have dubbed it a “Big Six” provider.
Northwestern Mutual Disability Insurance: Overview
Founded in Milwaukee, Wisc. in 1857 as Northwestern Mutual Life Insurance Company, Northwestern Mutual is one of the country’s oldest and largest insurance providers and is known for its integrity and financial strength.
Since 1872, Northwestern Mutual has paid annual dividends to its shareholders, including a record-breaking $6.8 billion in 2023 alone.
Although Northwestern Mutual has top marks for its reputation as a company, expert reviews for its disability products are mixed.
- CEO: John Schlifske
- Year founded: 1872
- BBB score: A- (third highest of 9 rating levels)
- A.M. Best rating: A++
- Phone number: 1 (866) 950-4644 or 1 (414) 271-1444
- Services offered: Retirement planning, college savings planning, private wealth management, estate planning, long-term care, business services, life insurance (whole, universal, variable universal, term), individual disability, disability for doctors and dentists
Northwestern Mutual: Fast Facts
- Disability insurance products: Medical-own occupation disability for physicians and medical professionals, any-occupation disability,”own-occupation, not working” disability, true own-occupation
- Eligibility requirements: 15 to 20 percent loss of income (depending on the plan) and meet the required definition of eligibility.
- Benefit periods: Five (5) years, 10 years, or until age 67 or 70.
- Maximum benefits: Uncapped with uncapped benefits rider.
- Elimination periods: 90 to 180 days.
- Discounts: May be possible when combined with other Northwestern Mutual insurance products.
Northwestern Mutual: Definition of Disability
Northwestern Mutual offers two different definitions of disability for doctors and dentists: true own occupation and medical own occupation.
True Own-Occupation
If you are unable to perform all the material duties of your current occupation, you are able to collect your full monthly benefits. You can receive these disability payments even if you are gainfully employed in another field of medicine or a different occupation.
While Northwestern Mutual categorizes this total disability as true own-occupation, the other Big Five carriers have a more lenient definition for this term.
Guardian Insurance, for example, defines a true own-occupation disability as being unable to perform any part of your job.
Medical Own-Occupation
Under this definition, you must be deemed “totally disabled” to receive benefits. The insured party is considered disabled when they are unable to perform the principal duties of their regular occupation, and cannot be “gainfully employed” in any other role or occupation.
You would need to be unable to complete your regular work and would need to stay unemployed to receive benefits.
Northwestern Mutual Disability Insurance: Built-in Benefits
Northwestern Mutual’s disability insurance comes with a number of built-in benefits to enhance coverage.
Survivor Benefit
With the Survivorship Benefit TT.LTC.SB.(1010), surviving family members may be entitled to a portion of your monthly disability payments up until age 70.
COBRA Premium Benefit
In the event of job loss, this benefit will pay your COBRA premiums so that you can maintain your current health insurance plan.
Good Health Benefit
With this benefit, your elimination period is reduced for every year that you remain in good health and do not receive any disability benefits.
Family Care Benefit
You can receive disability coverage if you need to limit or stop working in order to care for a critically ill or injured family member.
Supplemental Health Benefit
If you are disabled due to certain conditions, such as stroke, cancer, or renal failure, you may receive an additional lump-sum benefit. This one-time-only payment is set at a multiplier of your maximum monthly benefit (i.e. six times your monthly maximum).
Non-disabling Injury Benefit Benefit
This benefit may provide reimbursement for medical costs associated with a non-disabling illness or injury.
Rehabilitation Benefit
Beyond rehabilitative physical therapy, this benefit will provide additional assistance for worksite accessibility and any workstation modifications.
Serious Illness Supplemental Endorsement
In the event of disability due to cancer, stroke, or other qualifying medical conditions, this supplemental endorsement will pay an additional percentage of benefits over an extended period of time.
Waiver of Elimination Period
For certain qualifying conditions or medical procedures (i.e., transplant surgery), the typical elimination period of 90 to 180 days may be waived.
Recurrent Disability Benefit
For longer successive periods of any recurrent disability, you can receive more benefits and a shorter elimination period. This is for a recurring recognized disability for which you have already received disability payments.
Riders
Northwestern Mutual offers a variety of optional benefits, called riders, that you can add to your policy to add coverage.
Riders can customize a plan that meets your specific needs but will increase the cost of your insurance premiums.
Student Loan
With this rider, the policyholder will receive additional benefits specifically to cover their student loan payments.
Retirement Protection
This protection enables you to continue saving for retirement in the event of a disability. Beyond receiving your regular disability benefits, you would receive additional funds as well to replace some to all of the funds you or your employer would have contributed.
Uncapped Benefits
This gives you the option to have benefits high enough to meet your full monthly salary, whereas most policies have a monthly benefit cap of $15K to $30K.
Future Benefits Increase
The Future Benefits Increase rider enables you to increase your benefits based on inflation and the Consumer Price Index. Other plans may refer to it as a Cost-of-Living-Adjustment or COLA rider.
Enhanced Residual
For a residual disability (a recurring condition where you have already collected disability benefits), you can choose enhanced coverage. Here, benefits will kick in with a 15 percent loss of income instead of the typical 20 percent.
Partial Disability
This rider will pay your benefits in full, up to 100 percent, during the first year of any partial disability.
Recovery Benefit
An additional benefit that you can add to your residual rider. It will extend your recovery benefits beyond 12 months.
Catastrophic Disability
With the catastrophic disability rider, you will receive higher payouts in the event of a catastrophic disability which includes severe conditions like total blindness, quadriplegia, end-of-life renal disease, or Amyotrophic lateral sclerosis (ALS).
Cost-of-Living Adjustment (COLA) Catch Up
The COLA rider is a catch-up rider that will increase your benefits after a disability ends to catch up with cost-of-living increases.
Additional Purchase Benefit
This rider enables the policyholder to add additional coverage if needed, and this additional coverage will increase your premiums.
This “benefit” rider is a bit of a misnomer. While most other carriers will just amend your existing policy to add coverage, Northwestern Mutual will create an entirely new policy for you with new rates, new terms, and conditions. New coverage could potentially be much less favorable.
Premiums
Northwestern Mutual is notoriously and deliberately opaque when it comes to sharing information about premium rates – everything is a push to talk to a sales rep – but our data shows premiums are likely 1 to 5% of your annual salary.
This is based on reviews from financial experts and physician forums, stating that Northwestern Mutual’s rates are in line with what the Big Five insurance carriers charge. The rate will ultimately vary based on age, sex, medical specialty, geographic location, health condition, and desired amount of coverage.
On their website, Northwestern Mutual does state the cost for a disability insurance policy is “less than a daily cup of coffee” and in fine print states that they base this claim on monthly coffee costs of $72.52. This figure feels deliberately evasive and is frustratingly unhelpful.
Additionally, in the footnote of this same page, Northwestern Mutual states, “A $2,000 monthly benefit costs males $25.63/month and females $36.68/month.” However, a $2,000 benefit would be commensurate with a monthly salary of $2.4K to $2.9K, well below a physician’s earnings.
Expect to shell out as much for a Mutual Disability plan as you would for any alternate physician-provider plan, and to have to talk to a sales agent directly in order to get a detailed quote.
Northwestern Mutual Disability Insurance Alternatives
Guardian
Founded in 1860, Guardian has a solid reputation and impressive financial strength. It boasts the most comprehensive definition of “total disability” where the carrier would provide coverage if you were disabled and chose to work in a different medical specialty.
Principal
Principal is known for its fair underwriting and outstanding customer service. Offering three definitions of disability, including own-occupation, not working; any-occupation; or true own-occupation. Policies are non-cancelable and renewable, provided you pay the premiums.
More expensive than many other insurance carriers, Principal offers exceptional coverage and very comprehensive policy add-ons. Additionally, Principal has outstanding transparency when providing online quotes.
Mass Mutual
MassMutual is another Big Five provider that offers own-occupation disability insurance for physicians and medical professionals. Doctors can choose from two different disability policies, and customize either option for a bespoke plan.
Of note, Mass Mutual has an exceptionally generous COLA benefit (an optional ride) that guarantees a yearly benefit increase. By your sixth year as a policyholder, that rider increases your benefit by 16 percent.
Ameritas
Initially founded as a term life insurance company, Ameritas has been a trusted name for disability, life, and health insurance for over a century. Ameritas also offers retirement planning and investment services.
Ameritas is also a Big Five provider, meaning that it has a true-own occupation definition of disability which is the most financially generous and consumer-friendly.
The Standard
Originally founded as the Oregon Life Insurance Company in 1906, The Standard has grown into one of the country’s largest and most trusted providers of short-term and long-term disability insurance. It also offers health insurance, dental insurance, and annuities.
The Standard’s Platinum Advantage plan is built to meet the needs of medical doctors, dentists, and other healthcare specialists You must add an own-occupation rider to make it a true own-occupation policy though.
Pros and Cons
There are pros and cons to disability insurance, here you can compare to see if it is best for your financial needs.
Pros
- Structure: Pros and cons should be the same ones bulleted in the summary at the beginning of the post but can be expanded upon with a sentence or two, structured like so.
- Financial strength. Northwestern Mutual has an A++ (highest of 13 rating levels) with A.M. Best and an S&P Global 500 index rating of A++ (second highest 20 rating levels).
- Uncapped benefits. There’s no cap on your monthly disability payments. Similar carrier plans, by contrast, have a monthly cap at $15K or $30K.
- User-friendly claims submission process. The process is broken down into retail, resource videos, and numerous help articles.
- Policies are eligible for dividend distribution. Northwestern Mutual pays billions of dollars in dividends every year to policyholders. Your dividend is generally a percentage of your total policy’s accumulated value.
Cons
- Difficult to amend an existing policy. To increase coverage or make changes, a whole new policy is created with different terms. There’s no real way to truly amend an existing policy.
- Limited geographic accessibility. Some of the riders are geographically restricted and may exclude certain states.
- Limited online capabilities. Many policy details are vague and there’s no ability to get an online quote. Everything is geared to getting prospective clients to talk directly to a sales rep.
Frequently Asked Questions
How Trustworthy is Northwestern Mutual?
As an organization, Northwestern Mutual is very trustworthy. It has high marks for industry reputation and financial stability, with an A.M. Best Score of A++ and a 150-year history of paying annual dividends to its policyholders.
However, Northwestern Mutual is not transparent about pricing for individual disability insurance plans and shares example pricing for a worker earning $30K a year. This seems disingenuous, given how unlikely it’d be for a consumer at that salary to be shopping for coverage options.
Who is Northwestern Mutual’s Biggest Competitor?
In terms of all insurance and financial product offerings, Northwestern Mutual’s largest competitors are MassMutual, Morgan Stanley, and Edwards Jones.
But when looking strictly at disability insurance for physicians, Northwestern’s largest competitors are Ameritas, The Standard, Guardian, Principal, and MassMutual.
Is Northwestern Mutual Better Than New York Life?
By many measures, yes. Northwestern Mutual outperforms New York Life when it comes to customer support and general satisfaction with product offerings and coverage.
New York Life has a B- rating on the Better Business Bureau (BBB) and 108 complaints closed in the last 12 months. Northwestern Mutual, by contrast, has an A- rating with the BBB and 18 complaints closed in the past 12 months.
Both providers have comparable financial strength, with each receiving the highest marks possible from A.M. Best, Moody’s Investor Service, and Comdex.
How Much Do Most People Pay for Disability Insurance?
For disability insurance, most people pay premiums of 1 to 3 percent of their total yearly salary, but with specific coverage that is favorable to medical doctors and related professionals, premiums could run as high as 5 to 6 percent. The definition of ability, your current age and health, and the optional riders you select will determine the ultimate price.
Bottom Line
Northwestern Mutual is a financially strong and reputable insurance company that offers a range of financial and insurance products to its nearly 5 million customers.
But when it comes to disability insurance designed for physicians, you are likely best off going with one of the Big Five providers: Ameritas, Guardian, Mass Mutual, Principal, or The Standard.
These disability insurance companies offer a more comprehensive definition of disability and some offer far greater transparency with pricing.
