Long-term care encompasses a variety of services that may be necessary for people who have disabilities or debilitating health conditions. The need for it can arise for anyone at any time. Long-term care is different from other kinds of healthcare in that it can involve assistance with aspects of what’s known as custodial care, which includes help with bathing, using the bathroom, eating, getting dressed and more. It involves a much wider and more personal level of daily care than other kinds of healthcare a person might receive from a general or even specialized medical practitioner. There are three basic categories of long-term care: home care, assisted living and skilled nursing. The latter two typically take place in a purpose-built facility.
When considering long-term care, one of the biggest questions becomes how to pay for it. That’s where long-term care insurance (often called LTC insurance) comes in. Companies such as Northwestern Mutual, MassMutual and others provide insurance that typically covers services that don’t fall under the scope of other kinds of health insurance. These services can include the activities of daily living (ADLs) listed above. Some policies also cover services and care related to chronic conditions, certain diseases or impairments from unexpected accidents.
Affording a long-term care insurance policy can be relatively expensive, especially if you don’t have enough saved beforehand. Many companies encourage looking into it and paying for a policy as early as possible, before certain health issues could disqualify you from coverage approval. Insurance costs will depend on various factors, such as age, gender, types of benefits, durations of benefits, policy types (traditional or hybrid) and even existing health conditions. Regular health insurance, disability insurance and Medicare are not designed to cover long-term care costs. Some ways to make up the costs include getting support from Medicaid, using a 1035 exchange plan, certain state partnership programs, various tax deductions or using an HRA to withdraw premiums.
While it could be a good idea to seek the services of a financial professional to see if long-term care insurance is right for you, it’s also important to shop around and learn more about the different policies that are out there. According to the Long Term Care Insurance Price Indexes produced by the American Association for Long-Term Care Insurance, rates for virtually identical coverage can vary by over 110%.
Given all the types of long-term care insurance that are available, it may help to consult an experienced financial advisor as you make a decision.
Overview of Northwestern Mutual
In 1857, Northwestern Mutual was founded as the Mutual Life Insurance Company of the State of Wisconsin. By the mid-1860s, it expanded services throughout the Midwest and along the East Coast, which prompted the name change to The Northwestern Mutual Life Insurance Company.
In its earlier years, the company focused on life insurance. It later added disability insurance in 1969, retirement annuities in the 1970s and long-term care insurance in the 1990s. This wider range of offerings prompted another name change in 2000 to simply Northwestern Mutual.
The company has more than 7,100 employees, according to a 2021 fact sheet on its website. Its headquarters are located in Milwaukee, Wisconsin. The company is a private, mutual company, which means it distributes part of its earnings to eligible policyholders as yearly dividends. Company assets total $309 billion, with the expected 2021 total dividend payout being $6.2 billion.
The company has a number of subsidiaries that offer its products and services. Customers can obtain long-term care insurance through Northwestern Long Term Care Insurance Company.
The financial strength of the company is very strong. According to December 2020 figures listed on its website, Northwestern Mutual received the following grades:
- “A++ (Superior)” rating from A.M. Best Co. (highest possible)
- “AAA” rating from Fitch Ratings (highest possible)
- “Aaa” rating from Moody’s Investors Service (highest possible)
- “AA+” rating from S&P (2nd-highest possible)
Northwestern Mutual Long-Term Care Policy Features & Riders
In 1998, Northwestern Long Term Care Insurance Company, the underwriter of Northwestern Mutual policies, introduced its QuietCare product. This is a traditional long-term care insurance policy. The company does not offer any hybrid (i.e. long-term care insurance plus life insurance) policies.
Over the years, various enhancements have been made, including adding caregiver training, adding a hospice care benefit, offering an exchange program for existing policyowners, and adding a companion discount in approved states, to name a few. Care received in Canada is also covered by the company alongside care received in the U.S.
Benefit periods at Northwestern Mutual are either three or six years. Note that this may not present enough options for customers who are seeking periods of a different length, which certain other policies might offer. The company also provides some inflation protection options the customers can choose.
Premium costs are another factor to keep in mind. They’re affected by length and type of coverage, age, gender and other factors. It’s important to remember that the later you apply for LTC insurance, the higher the premiums.
Additionally, premiums often increase over time. Northwestern Mutual has a general statement on its website that once a customer’s state insurance regulator completes a review and gives permission for a premium rate to increase on a policy, the company will send a letter with specific details on increase amount and timing. At that time, your options include maintaining existing coverage and paying the premium increase, modifying existing coverage or stopping making premium payments and keeping a reduced policy in place based on what has already been paid.
While there doesn’t seem to be any way to get quotes from Northwestern Mutual’s website itself, it does provide an online calculator that helps estimate cost of your eventual care by state. Here are some examples:
Estimated annual costs for a 49-year-old person in Illinois who requires long-term care for one year, with the long-term-care event occurring in that same year:
- Home healthcare: $73,000
- Assisted living: $56,100
- Nursing facility: $101,298
Estimated total costs for a 62-year-old person in New Mexico who requires long term care for five years, with the long-term-care event occurring later, when the person is 75:
- Home healthcare: $698,249
- Assisted living: $546,147
- Nursing facility: $1,073,304
Estimated total costs for a 28-year-old person in Delaware who requires long term care for 10 years, with the long-term-care event occurring in that same year:
- Home healthcare: $927,373
- Assisted living: $1,099,564
- Nursing facility: $1,476,397
For someone who needs financial support based on these estimates, it may be a good idea to look into a number of insurance policies. Internet resources can be a good place to start. The American Association for Long-Term Care Insurance (AALTCI), as one example, provides three “snapshots” of some common situations and how much QuietCare would cost in those situations.
Northwestern Mutual’s Customer Satisfaction
The National Association of Insurance Commissioners (NAIC) has a complaint index report for Northwestern Long Term Care Insurance Co. There were no complaints about the company’s long-term care policies in 2020, 2019 or 2018 – an indication that its customers are comparatively pleased with its services. Only closed, confirmed complaints provided by state insurance departments are used in this NAIC report.
While the Better Business Bureau (BBB) does not categorize information about complaints, its website shows that Northwestern Mutual receives an “A+” rating. The company is not accredited by the BBB. As of the time of this writing, an average of six customer reviews on the page yield a rating of 2 out of 5 stars. There were 21 complaints closed within the last three years, the majority of them reporting a problem with a product or service.
How to Contact Northwestern Mutual
To contact Northwestern Mutual and find out where there might be a physical location near you, you can call their customer service line at (866) 950-4644 or visit the company’s website at northwesternmutual.com.
Long-term care might be necessary for anyone, whether it is someone in older age who requires assistance, or someone of any age who suffers from an injury or chronic illness that prevents them from independently managing their daily needs. When thinking about how to pay for this care, it’s important to shop around and learn more about the different policies that are out there. Northwestern Mutual may be one of the various options you consider before making a decision.
Tips for Planning Your Long-Term Financial Goals
- If you’re feeling overwhelmed with planning long-term care for you or a loved one, consider consulting a financial advisor. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors in your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- During the long-term care planning phase, it might help to familiarize yourself with what kinds of facilities are available. Check out SmartAsset’s guide to long-term care facilities to learn more.
Photo credit: ©iStock.com/Maksim Labkouski, ©iStock.com/designer491, ©iStock.com/SDI Productions