Adjustable Complife vs. Annuity

Adjustable Complife and an annuity are both products offered by life insurance companies. Beside this fact, they are significantly different and should be viewed differently for use in personal financial planning.


Annuities are tax-deferred savings products offered by many life-insurance companies. Adjustable Complife is a specific, hybrid life-insurance contract available from Northwestern Mutual Life Insurance Co.


Annuity deposits earn a fixed rate of interest. Earnings are tax deferred until a payout is selected at retirement age. Upon retirement, an annuity can pay an income for life, a set period of time or withdrawn in a lump sum.


Adjustable Complife is a combination of participating, permanent, whole-life insurance and term insurance. The whole-life portion pays annual dividends, which are used to purchase additional permanent insurance to replace the term insurance.


Life insurance, such as Adjustable Complife, is purchased to pay a lump sum death benefit in the event of the death of the insured. Annuities are long-term savings vehicles with no death benefit besides the current account value.


Permanent, participating life-insurance policies like Adjustable Complife can accumulate a cash value; however, the primary purpose of life insurance is to pay the death benefit if the insured dies.


Adjustable Complife will require monthly or annual premium payments until the policy matures at age 90 or the insured dies. Annuities usually just have a single lump sum deposit when the policy is purchased.