Best Life Insurance Companies That Offer Policies That Pay Dividends (2022)

Most life insurance companies that offer policies that pay dividends will offer participating whole life insurance. The best dividend-paying whole life insurance companies will have consistent returns and flexible dividend usage. Companies such as Mass Mutual, Foresters, and New York Life offer life insurance policies, including dividend-paying whole life insurance.

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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UPDATED: Nov 26, 2021

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Overview

  • The life insurance companies that pay dividends will have whole life insurance policies
  • Term and universal life insurance policies don’t have dividends even if they have cash value
  • The life insurance companies that offer policies that pay dividends may have restrictions when using your dividends

If you’re shopping for life insurance, there’s a good chance you’ve had some sort of insurance advice. For example, you may or may not have heard about life insurance companies that offer policies that pay dividends.

It can get confusing trying to understand all of the life insurance policy types. We’ll help break things down while simplifying life insurance dividends, policy options, and more.

Excited to learn more about life insurance companies that offer policies that pay dividends? Keep scrolling to learn more, or take advantage of our free quote tool below to get instant rates from top insurers near you.

Life Insurance Companies That Offer Policies That Pay Dividends

There are many life insurance companies with policies that pay dividends of some sort. Realistically, it comes down to which companies offer permanent life insurance options.

Life insurance dividend options are very limited since whole life insurance tends to be the only policy type that includes dividends. The life insurance companies that don’t offer policies that pay dividends won’t offer whole life insurance.

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What is dividend-paying whole life insurance?

Whole life insurance policies are structured in different ways. According to the National Association of Insurance Commissioners, whole life insurance companies can be participating or non-participating.

Like many other permanent life insurance options, some whole life policies accrue typical interest on the cash value. These are non-participating, while those that earn dividends are participating.

In short, the insurance company invests a portion of your policy premium into stocks. Dividend-paying life insurance policies are fairly safe as long as the market is in decent shape.

Your insurer’s stock shares earn dividends just as you would if you had invested in a specific stock yourself. When the stock outperforms expectations, your insurer will provide you the dividends.

What are dividends? Dividends are cash or stock shares given to shareholders when a company performs well. In a sense, dividends are small rewards for investing in a company.

What are the best dividend-paying whole life insurance companies?

It’s difficult to guarantee which life insurance provider will be the absolute best for dividend-paying whole life insurance. This is because performance history can vary greatly from year to year.

There are some reputable companies that do offer an assortment of strong life insurance policies, including dividend-paying whole life insurance. These include MassMutual, Foresters, and New York Life.

These companies are each considered strong competitors in the insurance industry and should be safe options for a whole life insurance policy.

Use our free quote tool below to get instant rates from top insurers near you.

How do I know which whole life insurance policy is best?

With participating whole life policies, the first step would be to determine how you can use your policy’s dividends. Using policy dividends often varies from company to company.

This means there might be restrictions on what you can do with any accrued cash value your dividends generate. Almost all companies will add dividends to your cash value or allow you to contribute it to your monthly payment.

Other companies, like MassMutual and Foresters, might allow you to add it to the death benefit, be left to accrue interest, or even be paid out in cash.

Beyond understanding the access you’ll have to dividends, you’ll also want to compare whole life insurance quotes online.

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Whole life insurance pricing is much different than term life insurance. You’ll typically have consistent monthly rates as you would with term life, but your cash value accrual can change your price drastically.

Foresters 20-Year Term vs. Whole Life Insurance Rates for $250,000 Policy Coverage
AgeTerm - MaleTerm - FemaleWhole - MaleWhole - Female
25$13.78$11.59$178.68$156.80
30$14.00$12.91$216.52$188.96
35$15.53$14.00$267.05$230.52
40$20.56$18.59$326.33$277.99
45$31.94$25.81$401.58$349.30
50$46.59$36.97$499.36$429.14
55$72.41$54.69$629.30$549.89
60$118.13$88.38$802.33$700.83
65$219.63$150.06$1,043.61 $912.58
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Sample whole life insurance rates are hard to come by, but above you’ll see how drastic the difference is between whole and term life insurance rates. Term life insurance is almost always more affordable.

With dividend-paying whole life insurance, there can be further variance in your rates, cash value, and so on, depending on the performance of your insurance company’s investments.

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How is my policy’s dividend determined?

The insurance company’s investment choices, and the market’s performance, will determine your dividends. If your insurer happened to invest in Amazon for your portfolio, you could have had major returns from dividends.

Are dividends guaranteed? Thankfully, if your insurance company’s investments don’t perform well, you won’t lose anything. Instead, you’ll be given small dividends or none at all.

This is why life insurance companies that offer policies that pay dividends can be so desirable. There’s little risk but plenty of potential for growth.

Life Insurance Companies That Pay Dividends: The Bottom Line

If you’re looking for a life insurance company that pays dividends, you’ll need to look into whole life insurance. Companies like MassMutual and Foresters are great options to start with.

By now, you should know more about life insurance companies that offer policies that pay dividends. Before you go, don’t forget to use our free quote tool to get instant rates from top insurers near you.

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