On November 19, 2021, the Penn Mutual Board of Trustees approved a $123 million dividend payout to our eligible policyholders, making our dividend history over the last 20 years one of the industry’s most consistent. We’re grateful to our policyholders and financial professionals who have placed their trust in us and allowed us to continue to pay income-tax-free dividends for more than 170 years.*
Life insurance dividends are non-guaranteed payments declared annually by a mutual life insurance company to policyholders of eligible life insurance policies. Dividends are a partial return of premiums paid when the performance of a block of policies is better than what was anticipated when the policies were priced. Consider our dividend record.
- Dividends are the best measure of the performance of a mutual insurance company. We invest the money you trust us with so that we’ll be here for you for the long term — keeping our promises to you. Our investment yield has outperformed the industry average every year over the last 10 years. Plus, our claims experience and operating expenses for whole life policies over the last 10 years have emerged as we expected.
- Dividends indicate a company is financially strong. Penn Mutual is one of only eight life/health insurers to maintain an ‘A’ or higher rating for 93 consecutive years from A.M. Best,** recognized as the benchmark for assessing an insurance company’s financial strength.
- Dividends are a good reason to buy life insurance from a mutual company. As a mutual company, we’re not owned by anonymous stockholders. Instead, we’re owned by our policyholders, and our annual dividend is a great demonstration of how well we serve them. Public or stock companies serve multiple interests. First in line are their shareholders, followed by their policyholders. So, public companies pay dividends to their shareholders. As a mutual company, we pay dividends to our policyholders.
All this adds up to the fact that our dividend action history over the last 20 years remains one of the strongest and most consistent in the industry.
You have great flexibility in using your dividend award. There are four things* you can do with it:
- Take it and spend it. We write you a check and you can do what you want with the money.
- Reduce your premiums. If you’re a long-term policyholder, you could get to the point where the dividend completely pays for your policy’s premiums.
- Let them grow with interest. You can keep the dividends in the policy, which will allow the cash value of your policy to grow even faster.
- Purchase paid-up additional coverage on your policy. This option allows your policy’s death benefit and cash value to grow to meet your needs.
You can change how you want your dividend to work for you whenever you want, depending on where you are in life and what you want to accomplish.
With more than 170 years of paying a dividend award, we’re proud of our record of financial strength, being here for the long term, and always keeping our promises to our policyholders and the financial professionals who serve them. It’s a track record in which our policyholders can take great comfort.
*Past performance is not indicative of future results. Dividends are always tax-free while they remain in the policy. Dividends taken as cash could be taxable under certain circumstances. You should always consult your tax advisor prior to accessing dividends.
**Source: AM Best data and research. Ratings as of March 2021
This post is for informational purposes only and should not be considered as specific financial, legal or tax advice. Depending on your individual circumstances, the strategies discussed in this presentation may not be appropriate for your situation. The information in this material is not intended as tax or legal advice. Always consult your legal or tax professionals for specific information regarding your individual situation.