I have a 65 Extra Ordinary Life policy with NWML. I assume that sometime before or after I would convert this to an annuity to receive quarterly premiums. Is this correct?

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Jason Goldenzweig
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
When you say NWML, I assume you are referring to Northwestern Mutual Life. Since I'm not a NWML agent, it's hard to comment on the specifics of the carrier's product, but can hopefully provide some general insight for this type of program. These types of policies typically feature a combination structure of part whole life and part term insurance.

Whole life insurance cannot be converted to an annuity, nor can term life insurance. If the policy was surrendered for the cash value of the whole life side of the policy (term life insurance does not build cash value), the monies could be used towards an annuity. Please note, if there is a loan (and any interest on the loan) on the policy, any remaining surrender charges, the dollar amount you receive can be lower than the policy's cash value (think: cash value - loans - interest on loans - surrender charges = amount you actually receive). Also, you may want to verify whether there would be a taxable gain on the policy before surrendering it (the cash value in the policy exceeds the premiums paid into it).

Also, the only way a whole life insurance policy pays a dividend to the policyowner is if the policy is a participating whole life policy (non-participating policies do not offer any dividend structure - only the build-up of cash value).

I hope the information is helpful - please feel free to contact me for help and if you have any other questions. Thanks very much.
Answered on July 23, 2014
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Jim Winkler
CEO/Owner, Winkler Financial Group, Houston, Texas
That is a great question! It's really one that you should ask your agent, because I'm a little hazy on what you are wanting to do. You aren't going to be able to convert your life insurance policy into an annuity, so that part of your question is no, you won't convert it at all. As for the receiving of premiums, Companies pay premiums ( or don't) at their choosing. They determine the amount to be paid, if any, and usually at a set time during their fiscal year they make that payment. I believe NWML pays once a year, but I may be wrong, I've never asked them ( I have policies from them that my Dad bought way back when) I just appreciate seeing them on my yearly statement. Please contact your agent, and have them explain your policy a little better to you. I hope that helps, thanks for asking!
Answered on July 24, 2014
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