Life Insurance Basics
What is the difference between a mutual and stock life insurance company?
A mutual life insurance company is owned by its policyholders. Profits are returned to policyholders as dividends. A stock life insurance company is owned by shareholders. Profits are returned to shareholders as dividends. Mutual companies typically offer participating policies; stock companies typically offer non-participating policies.
Key Points
- Mutual company: owned by policyholders
- Stock company: owned by shareholders
- Mutual company profits: returned to policyholders as dividends
- Stock company profits: returned to shareholders
- An independent agent can help you compare mutual vs. stock company products