What is a Mutual Life Insurance Company?

 
Many of our readers have contacted us wanting to know what a mutual life insurance company is. Essentially, a mutual life insurance company is an insurance carrier that is wholly owned by it’s policyholders as opposed to stockholders. Since the company is owned by its policyholders, in theory, all profits at the end of the year are divided up among those who actually own the policies.

History of Mutual Life Insurance

A while back, whenever a company was organized, it was set up as a mutual life insurance company. The driving force behind this is the thought that the policyholders will all be placed in the best possible light when they take their individual considerations into view.

Recently, the mutual life insurance company has become much more of a rarity. One of the biggest drawbacks to the mutual structure is the fact that it is difficult to raise up additional capital to drive growth since so much of the profit is allocated among the policyholders. As a result, a large number of companies have undergone demutualization recently, and have completed in IPO in order to raise up additional money to invest in the growth of the business. Typically, when a mutual life insurance company goes through the process of demutualization, they start to trade on one of the major exchanges just as any other large corporation does.

Current List of Mutual Life Insurance Companies

There are still a number of mutual life insurance companies around. Many of them are household names, and truly pride themselves for remaining to be solely on the side of their policyholders. Here is the most current list available as of 2010.

Acacia Life Insurance Company
American Family Insurance
Amica
Ameritas Life Insurance Company
Auto-Owners Insurance
Boston Mutual
CAMICO Mutual Insurance Company
COUNTRY Financial
COUNTRY Insurance & Financial Services
CUNA Mutual Group
FM Global
Guardian Life[7]
Hastings Mutual Insurance Company
HCSC – Blue Cross Plans of IL, NM, OK and TX
Illinois Mutual
Liberty Mutual
Massachusetts Mutual Life Insurance Company
Missouri Employers Mutual
MTL Insurance Company
Mutual of America
Mutual of Omaha
Nationwide Mutual Insurance Company
New York Life
North Carolina Mutual
Northwestern Mutual Life
Ohio National Life Insurance Company
Pacific Life Insurance Company
PEMCO
Penn Mutual
Physicians Mutual
SBLI USA Mutual Life
Security Mutual of NY
Sentry Insurance
Shelter Insurance
State Farm Insurance
UNIFI Companies
Union Central Life Insurance Company
United Services Automobile Association (USAA)
Western Mutual Insurance Group
Western & Southern
Old Missouri Mutual Insurance Company

Other Mutual Life Insurance Company Key Differences

There are a few other details that you should keep in mind when discussing the difference between a mutual life insurance company, and others in the marketplace. Most of the time, the only policies that have mutual ownership rights are permanent life insurance plans, usually whole life insurance. If a company is a mutual company, it will usually pay the policyholder a dividend, as opposed to the interest that is paid from a stock company. More often than not, the dividends paid by mutual life insurance companies are higher than you could hope to receive from a non mutual company.

Please contact us if you have any other questions, or if you would like to get a quote from a mutual life insurance company.