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Top 10 Best Mutual Life Insurance Companies

Fact Checked by Jason Herring & Barry Brooksby
Licensed Agents & Life Insurance Experts.
Insurance and Estates, a strategic life insurance provider composed of life insurance professionals, is committed to integrity in our editorial standards and transparency in how we receive compensation from our insurance partners.
Mutual Life Insurance Companies

In the following article we will touch on the benefits of a mutual insurance company vs a stock insurance company, while also providing our picks for the best mutual life insurance companies.

Mutual insurance companies are a rare breed nowadays. Most companies that were once mutual have switched to stock insurance companies through “demutualization,” such as MetLife and more recently, Ohio National.

The following list of the top 10 mutual insurance companies focuses on the companies which currently provide the best dividend paying whole life insurance. If you would like to learn more about each individual mutual insurer, please click on the company’s name below.

Best Mutual Life Insurance Companies

Mutual CompanyA.M. Best Rating
Penn MutualA+
American United LifeA+
Lafayette LifeA+
Guardian LifeA++
Minnesota LifeA+
Mutual of OmahaA+
New York LifeA++
Northwestern MutualA++

Mutual Life Insurance Pros and Cons

Of all the benefits of choosing life insurance from a mutual insurance company, in our estimation the greatest benefit is that a mutual company operates for the sole benefit of its policyholders.

…the greatest benefit is that a mutual company operates for the sole benefit of its policyholders.

You see, a stock insurance company focuses on maximizing shareholder value. And what is good for a shareholder might not always be good for a policyholder.

Another benefit of a mutual company is that your mutual life insurance is not connected to Wall Street. For many of us that is a relief, as we are constantly inundated with the idea that we should give Wall Street all of our money and just hope and pray it all works out.

Mutual life insurance, particularly dividend paying whole life insurance, provides an option outside of the confines of Wall Street to earn a consistent and guaranteed return. Check out our video below for more information on stock vs mutual insurance companies.

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One of the only cons of mutual life insurance is if you choose a company that has under-performed its peers. That is why it is important to work with a seasoned professional who can align you with the best company, taking into account the company’s historic performance, while also balancing it with the company’s current performance and future prospects.

Best Mutual Life Insurance

Policy design is a huge factor in maximizing your mutual life insurance policy. A policy can be structured in a myriad of ways. The two main focuses of mutual life insurance is on either the death benefit or cash value growth.

Due to the financial strength of most mutual insurance companies, whether you want a policy designed for death benefit protection or cash value growth, choosing a mutual company that focuses on maximizing policyholder value vs stockholder value is a good route to take.

So the best mutual life insurance would be from a company with a solid history of performance, mixed with a strong financial rating.

About Mutual Insurance Companies

Mutual life insurance companies, AKA “Mutuals”, have no shareholders. Contrast mutual insurance companies vs stock companies, where the company’s focus may be split or may focus more on shareholders, than policyholders.

The mutual company’s policy owners are the corporation’s members, controlling the mutual insurer and giving them rights of membership.

Mutual company policyholder’s membership rights include:

  • Membership rights that are contractual, such as company dividends declared by the board of directors
  • The option to participate in corporate governance, typically by voting for the company’s directors
  • Receipt of any outstanding value in case of liquidation or demutualization of the corporation
  • Members can expect that the corporation’s main objective will be to operate in the best interests of the policyholders
  • Ability to launch legal action against the company’s directors and officers if they violate their fiduciary duties
  • Profits earned by a mutual insurance company must be either kept within the company or distributed to policyholders as dividend distributions or reductions to future premiums.

Mutual Insurance Company vs Stocks Insurance Company

The primary difference between the two types of companies is how they plan for the future. A stock company is looking to maximize shareholder value, so the focus is going to be more tailored to the “what have you done for me lately” operating style. This focus on short term profits may lead the stock company to taking on more risk in the investments it chooses.

In contrast, mutual companies are not critiqued on a quarterly basis, so the focus can be on long term planning, with an emphasis on solid long term investments that have a lower risk profile than those a stock company may choose.

You see, with a stock company, the profits pass on to the shareholders. However, with a mutual insurance company, the profits pass on to the policyholders, such as life insurance dividends.

Life Insurance Dividends

Mutual insurance companies that offer participating life insurance have a long history of paying annual dividends. Life insurance dividends are beneficial to policyholders and can be used in a variety of ways.

Dividend Payments Can Be Used For:

  • Cash
  • Premium Payments
  • Paid Up Additions
  • Earn Interest with the Insurance Company
  • Repay Existing Loans

When seeking out the best performing mutual life insurance, it is important to know which companies allow you to use your dividend to purchase paid up additions, so that your policy death benefit and cash value continues to grow.

Direct Vs Non Direct Recognition

Among the various mutual life insurance companies one way they differentiate themselves is through direct vs non direct recognition of outstanding life insurance loans.

Non recognition companies pay the same dividend rate, whether or not you have an outstanding loan against your cash surrender value.

Direct recognition companies pay a different dividend rate (not necessarily less) on the portion of the cash value that is currently borrowed against.

So which type is best?

When you look at the long term growth of a policy that focuses on direct vs non direct recognition there is little difference long term. And while whole life “purists” may advocate only for non direct recognition companies, we have found that there are some great companies, with fantastic policy design options, from the direct recognition companies.


In the end, the best way to be sure that you are going with the best mutual life insurance company offering the best life insurance policy is to connect with a life insurance professional who can help point you to the current crop of the best mutual life insurance companies.

Our team of seasoned professionals will be able to match you to the right company and policy that meets your need, tailored to your specific goals and objectives. So what are you waiting for? Give us a call today and experience the I&E difference.

8 comments… add one
  • Miles Forsberg January 18, 2021, 12:52 pm

    My mother has an insurance policy: Group paid-up life insurance certificate.
    Can you tell me more?

    • Insurance&Estates January 21, 2021, 11:05 am

      Miles, people sometimes confuse us for their life insurance company because we write a lot of articles. You’ll need to go back and make sure you have the website for the policy in question.

      Best, Steve Gibbs, for I&E

  • han August 13, 2021, 10:57 am

    My question is, Can i take out money from my 401k without any penalties and invest into one of your avenues you speak of ?

    thank you

    • Insurance&Estates August 17, 2021, 4:26 pm

      Hello Han, penalties would apply; however, sometimes these make sense due to future projections.

      To learn more, you might connect with Barry Brooksby by e-mailing him directly at barry@insuranceandestates.com.


      Steve Gibbs for I&E

  • MW December 7, 2021, 7:30 am

    Are there any plans for converting a portion of my term life insurance to whole life with adding PUA rider? The current insurer does not sell whole life insurance. Another agent I talked to will says that I cannot add any riders. I am 60 yrs. old.

    • Insurance&Estates December 7, 2021, 10:55 am

      Hello, you may be able to exchange this policy for a replacement and the best place to get this information is with a trained expert. You can request a call by emailing Barry Brooksby at barry@insuranceandestates.com.

      Best, Steve Gibbs for I&E

  • al hunley July 31, 2023, 1:43 pm

    want more info on whole life

    • Steven Gibbs August 1, 2023, 7:43 am

      Hello Al, we forwarded your request to our Whole Life expert, Pro Client Guide Denise Boisvert so please watch for an email from her, or you can reach out to her to request a call at denise@insuranceandestates.com.

      Best, I&E Pro Team

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