About Mutuality
What mutuality means to you
A mutual life insurance company differs significantly from a stock life insurance company. A stock company is owned by stockholders who share in the company’s profits. In contrast, a mutual company is operated for the benefit of its member policyowners. Participating policyowners share in the results of the company's performance through policy dividends.*
Our mutual beginnings
Northwestern Mutual’s founders saw distinct advantages for policyowners in the mutual form. An early company publication noted, “Each policyowner holds the same position to the company. Voting power cannot become concentrated in the hands of a few.” These founders also pointed to the advantage inherent in a governing structure in which the only motive was the policyowners’ best interests. They maintained that life insurance policy values are sacred and should not be subjected to special interests. Policyowner security could be affected adversely if their money were transferred from “surplus” to “capital stock.”
Of all the reasons policyowners and clients value Northwestern Mutual as their partner on the path to financial security, one is paramount. Read why it is called “Our Mutual Advantage.”
Equitability for all
This fervent belief in mutuality was the foundation of a Northwestern Mutual tradition: equitability for all policyowners. Inequitable treatment of policyowners became commonplace elsewhere in life insurance. Many companies tried to attract new customers by offering special or improved benefits not available to current policyowners. This is not the case at Northwestern Mutual, where mutuality extends to our practice of operating on our policyowners’ behalf in very tangible ways - including pricing, underwriting, claims, service and more.
New benefits for “old” customers
One practical example is our approach to “retroactivity.” As new and enhanced benefits to Northwestern Mutual life insurance products become available, existing policyowners are given the opportunity to acquire them, whenever possible and practical. In recent years, several “Update” programs provided dramatic evidence of Northwestern's mutuality. In one program alone, “Update 80,” Northwestern made available to existing policyowners a potential of $4.5 billion of additional insurance at no increase in premium.
* The dividend scale and the underlying interest rates are reviewed annually and are subject to change. Future dividends are not guaranteed, although Northwestern Mutual has paid a dividend every year since 1872.
