Independent Review of Northwestern Mutual Variable Annuity Account C
What we will be covering in this annuity review:
In this review, we will be covering the following details on the Pacific Life Core Protect Advantage Variable annuity:
- Product type
- Current rates
- Realistic long-term return expectations
- How it is used
- How it is most poorly used
Annuities can be complex. That’s where having an Annuity Investigator who loves math comes in.
We make the complex, simple.
If you have been considering the purchase of a variable annuity because you want to grow your savings tax-deferred, while at the same time have the ability to attain market-related returns, then the Northwestern Mutual Variable Annuity Account C may be a wise choice.
But depending on your current financial situation, even if you purchased this product several years ago, today your situation may have changed, rendering this annuity no longer needed or wanted for what you are hoping to accomplish.
What you will likely notice about this annuity is that, just like any other financial or insurance product, there are areas where it may perform quite well, and then there are other areas where it doesn’t perform very well at all.
In order to really know whether or not the Variable Annuity Account C from Northwestern Mutual is the right one for you, it may be necessary to read over a myriad of “small print” in the prospectus and/or other written materials. Unfortunately for most people, even though this is important, it can be about as fun as getting a root canal.
This is where the Annuity Gator comes in!
Annuity and Retirement Income Planning Information You Can Actually Trust
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Although you may have noticed other similar websites on your quest for annuity information on the Internet, we’ve actually been offering annuity product reviews for many years – far longer than most of the other copycat sites. (Although, it has been said that imitation is the highest form of flattery).
It is possible that your present insurance or financial advisor has offered you the Prudential Premier Advisor Variable Annuity (or some other similar financial product that can help you to save for retirement, as well as to attain an ongoing income in the future). You may also have recently attended an annuity seminar where, in return for a free lunch or dinner, you listened to a presentation about this annuity.
Yet, even though you may feel like the presenter left you “well informed,” it is still extremely important that you know more about the entire picture – which includes the good, the bad and the ugly – before you commit what will likely be a large chunk of your retirement savings.
In researching annuities online, you may have come across other annuity websites – many of which tout some pretty bold claims about the annuities they offer, such as:
- Highest income payouts
- Low fees
- Top-rated annuity carriers
But unfortunately, rather than present you with all of the pertinent details about the annuities that they’re marketing, these websites would rather just highlight the good features, in order to get you to provide your contact information (and in turn, bombard you with endless emails).
Yet, as appealing as some of these annuity-related claims may be, you absolutely, positively need to know both sides of the story when it comes to annuities. This means understanding that, while the Prudential Premier Advisor Variable Annuity definitely has some positive features, there are also some areas where this annuity will have some big disadvantages.
This is where we come in!
Our annuity reviews offer you a wide array of details so that you can measure the pros and the cons, and from there you can make a determination as to whether or not this is the best annuity product for you.
So, if you are ready to get started, let’s dive in!
The Northwestern Mutual Flexible Payment Variable Annuity Account A at a Glance
|Product Name||Flexible Payment Variable Annuity Account A|
|Type of Product||Variable Annuity|
|Phone Number||(866) 950-4644|
Opening Thoughts on the Northwestern Mutual Flexible Payment Variable Annuity Account C
Northwestern Mutual has more than 160 years of experience in the insurance arena, making it one of the oldest financial and insurance entities in the U.S. Over 4.4 million people are clients of this company – and roughly 96% of the company’s clients remain with Northwestern Mutual for over one year.
As a mutual insurance company, certain policyholders are eligible for dividends from Northwestern Mutual (although dividends are not guaranteed). This insurer has been consistently been named as one of the World’s Most Admired Companies by Fortune Magazine, and it is ranked in the Fortune 100 Company list. Given its strong financial footing, the company has extremely high ratings from all of the insurer rating agencies, including a(n):
- A++ from A.M. Best Company
- AAA from Fitch Ratings
- Aaa from Moody’s Investors Service
- AA+ from S&P
While variable annuities have taken somewhat of a back seat to other, safer, alternatives like fixed and fixed indexed annuities over the past decade, there is a definite niche for these products – particularly with those who are seeking the opportunity for a higher rate of return, as well as the tax-deferred growth of assets.
Before we get into the gritty details, there are some required legal disclosures here…
This is an independent annuity product review. It is not a recommendation to purchase or to sell an annuity. Northwestern Mutual has not endorsed this review in any way, nor do we receive any type of compensation for providing this review. This annuity review is meant solely to be an independent review at the request of our readers so that they may see our perspective when breaking down the positives and the negatives of this particular annuity. Prior to committing to the purchase of any type of insurance and/or investment vehicle, it is critical that you do your own due diligence, and that you also talk with a properly licensed professional if you have any questions that relate to your specific situation. All of the names, materials, and marks that have been used in compiling this annuity review are the property of their respective owners.
How Northwestern Mutual Describes the Variable Annuity Account C
According to its prospectus, Northwestern Mutual Variable Annuity Account C is an unallocated group combination annuity, which provides retirement benefits for self-employed persons and their eligible employees.
This annuity offers a wide range of equity investment options, as well as a fixed option that offers a guaranteed return for either one, three, or five-year durations. Because this is a variable annuity, you could see fluctuations in the contract value – both up and down. The gain in the contract is allowed to accumulate on a tax-deferred basis, which can allow for compounded growth over time.
Annuitants can choose to receive income from this annuity under either a fixed or variable income plan. Under a variable income plan, the annuitant will take on all of the risks, as there are no investment guarantees made with variable annuities. With that in mind, if you opt for the variable income plan option, the amount of income that is received could feasibly change from month to month – either up or down.
As with many other similar annuities, this one offers a death benefit option. The amount of this benefit, which is paid out to a named beneficiary, will depend in part on when the annuitant passes away. There is also the option to choose an enhanced death benefit (at an added cost).
With this (or any) variable annuity, it is important that you remember that variable annuities are designed for doing two main things. These include growing principal, and producing retirement income. But in reality, these types of annuities are not really all that good at producing income. One reason for this is because of the risk that they present to the investor, as well as to the insurance companies that offer them.
In fact, because the value of a variable annuity can – and typically does – fluctuate so much, the insurance carrier that offers it can really only guarantee a lesser amount of retirement income than that of a “safer” alternative such as a fixed annuity… for the exact same amount of money that you’ve deposited.
It seems a bit silly, then, to endure countless sleepless nights hoping that the market doesn’t “correct” itself when you may not gain any more in an equity-based product than you would with something that’s guaranteed. So, if your primary goal for purchasing an annuity is to use it for producing income in the future, then a variable annuity may not be your best option.
That being said, when it comes to the investment aspect of variable annuities, these financial vehicles can offer you the opportunity for unlimited growth. But here again, this comes with the “tradeoff” of downside risk – and in some cases, it could be a substantial amount of such risk.
In addition, variable annuities are also known for having high fees. These don’t necessarily only include an up-front commission charge, but also annual fees for account management and maintenance, as well as surrender charges if you withdraw more than 10% of the annuity’s value during its surrender period.
Taking all of this into consideration, it can be even more important than ever for you to be sure that the benefits of this – or any – annuity is well worth it. It is also essential that you know what to anticipate with this type of financial vehicle.
How a Financial or Insurance Advisor Might “Pitch” this Annuity
Given its wide array of investment options, it is likely that an insurance or financial advisor would “pitch” the Northwestern Mutual Flexible Payment Variable Annuity Account C as a financial vehicle that offers options and choice, along with the ability to obtain market-related returns. These, in turn, could help your money to keep pace with rising inflation over time – which is something that fixed annuity products are not typically able to do.
There is also the ability to diversify the holdings to best fit your particular needs and risk tolerance. And, with the various investment strategies, you can be as hands-on, or as hands-off, as you want to be. It is also possible that an advisor would tout the lifetime income feature on this annuity.
Yet, while this is all well and good, variable annuities are not necessarily known for being the best alternative for generating lifetime income. While you can obtain a stream of income for life, oftentimes, due to the risk to the insurance company involved, these products end up only generating the same amount of income – or less – than safer options such as fixed annuities.
That being the case, would you really want to endure endless sleepless nights wondering what the market is going to do, and worrying that your hard-earned principal could be lost before you retire?
Annuities can be confusing products – and because of that, it is important that you know what you’re getting into, and you know what questions you should ask before moving forward. With that in mind, if you would like some additional tips on what you need to know before buying an annuity, just simply click here so that you can immediately access our free report on how to shop for an annuity.
What About the Fees on the Annuity?
One of the biggest issues that people tend to have with variable annuities is the fees that are charged. This is because these products charge fees of their own, and there are typically additional fees that come in conjunction with the underlying investments. So, let’s take a look at some of the fees on this particular annuity offering.
First and foremost, there are actually two versions of this annuity available. These include a front-loan contract – where a commission is paid out to the selling agent or broker at the time of purchase – and simplified-load contract. If you opt for the front-loaded version, you could be paying out up to 4.5% of the contribution. In turn, this is an amount that you won’t be generating any returns on going forward.
There are some other fees to be mindful of with this annuity, too. For example, you could pay up t 1% per year for mortality and expense risk fees (which is presently charged 0.65%). There is also an annual contract fee of $150. This, however, may be waived if the contract value equals or exceeds $25,000.
If you instead choose the simplified load contract, a one-time sales charge is assessed. There is currently no stated maximum on how much can be charged here. Presently, there is an installation fee of $750 charged.
There are also some additional fees with the simplified load option, too. Here you will find a maximum mortality and expense risk fee of 1.50% – which is presently standing at 1.25%. Likewise, there is also an annual contract fee with this annuity version of $150, which is waived if the contract value equals or exceeds $25,000.
For an outline of all the fees that are associated with this annuity, you can refer to the product’s prospectus HERE.
The Annuity Gator’s End Take on the Northwestern Mutual Flexible Payment Variable Annuity – Account C
Where this annuity works the best:
- For those who are looking for the opportunity to attain market-related growth
- For those who are seeking lifetime income
- For those who are seeking a way to diversify their assets
- For those who wish to obtain additional tax-deferred growth and have already maxed out their 401(k) and IRA options
Where this annuity works the worst:
- For those who have a low-risk tolerance
- For those who do not intend on using the lifetime income feature
If you’ve been going back and forth with the thought of purchasing a variable annuity – or any annuity, for that matter – but you’ve been hesitant to move forward because you just aren’t sure which annuity might be right for you, it is important that you know all of the ins and the outs of a particular product before you sign on the dotted line.
This is because an annuity should always be considered as a long-term financial commitment – and if you do end up determining that a particular annuity just isn’t for you after you’ve purchased it, it can be fairly expensive to get out of it.
If you’re still leaning towards the purchase of the Northwestern Mutual Flexible Payment Variable Annuity Account C, there are definitely some nice advantages that you could attain. However, this annuity may also fall somewhat short – particularly if you are seeking the safety of your principal.
The only way to know for sure whether or not this is the annuity for you is to have it tested. We would be happy to provide this testing for you, at no cost or obligation. So, just simply contact us here via our secure online contact form now.
Need More Info About this Annuity? Notice Any Mistakes in this Review?
While we realize that this annuity review was a bit lengthy – and we appreciate you sticking with us through it all – we feel that it is much better to “err” on the side of providing “too much” information than not enough. With that in mind, if you felt that this annuity review was helpful, then please feel free to forward it on to anyone else that you think may benefit from it, too.
Also, as humans will often do, we also understand that information about annuities can change quickly. Therefore, if you happened to notice any details in this review that were out of date or that need correction, please let us know that as well, and we will get it fixed quickly.
Are there any other annuities that you would like to also see reviewed?
If you have checked out our list of annuity reviews and there is another annuity (or more than one other annuity) that is not currently in our annuity review database, but that you would like to see reviewed, please let us know the name of the annuity or annuities and our team of annuity “geeks” will get right on it. So, be sure to check back with us soon to see any updates.
The Annuity Gator
P.S If you would like to read more of our Northwestern Mutual annuity reviews here are some links to check out:
- Northwestern Mutual Fee Based Select Deferred Income Annuity
- Northwestern Mutual Select Fixed Annuity
- Northwestern Mutual Flexible Payment Variable Annuity Account A