(Springfield, MA) – Underscoring its financial strength and stability, as well as its commitment to its policyowners and members, Massachusetts Mutual Life Insurance Company (MassMutual) today announced that its Board of Directors has approved an estimated dividend payout of $1.6 billion for 2015, marking the third consecutive year the company has paid a record dividend to eligible participating policyowners and members. The dividends to be paid in 2015 reflect a dividend interest rate1 of 7.10 percent – maintaining the same rate as 2014 – for eligible participating permanent life and annuity blocks of business.
The approved estimated payout represents an increase of $92 million – or 6.2 percent – over 2014 and reflects updated investment, mortality, expense and other experience, as well as the distribution of other business earnings from the company’s asset management and non-participating businesses. The 2015 MassMutual dividend payout marks the 17th consecutive year that it exceeds $1 billion.
MassMutual has paid more than $21 billion in dividends over the last two decades, and although dividends are not guaranteed, the company has paid dividends to eligible participating policyowners consistently since the 1860s.
The estimated record payout comes at a time when MassMutual maintains among the highest financial strength ratings2 in its industry and is reporting strong levels of surplus of approximately $14 billion and total adjusted capital of $16 billion, both of which are key indicators of the company’s overall financial strength.
“Our enduring financial strength, excellent operating fundamentals, long-term investment strategy, and diverse mix of businesses have all contributed to our long history of paying competitive dividends to our participating policyowners,” said Roger Crandall, Chairman, President and CEO of MassMutual. “At a time when economic growth is slow and consumers need to take greater accountability for their financial future, our policyowners can take comfort knowing that they’ve chosen a company that can help them secure their future and protect the ones they love.”
Of the estimated $1.6 billion dividend payout, an estimated $1.55 billion has been approved for eligible participating policyowners who have purchased whole life insurance. In 2013, MassMutual realized its eighth consecutive year of growth in whole life insurance policy sales3 – $347 million – and demand continues to be strong through the first three quarters of 2014.
“Whole life insurance continues to be a sound choice for consumers as it provides a sense of stability in any economic environment,” said Michael Fanning, Executive Vice President and Head of MassMutual’s U.S. Insurance Group. “In addition to the guaranteed premiums, death benefits and cash values, the potential to receive dividends is yet another of the many benefits of whole life insurance ownership.”
Whole life insurance policyowners may use dividends for a broad range of options, including receiving dividends in cash or using them to pay premiums, purchase paid-up additional insurance coverage, accumulate at interest, or repay policy loans and policy loan interest.
1 The dividend interest rate is not the rate of return on the policy. Dividends consist of an investment component, a mortality component and an expense component. Therefore, dividend interest rates should not be the sole basis for comparing insurers or policy performance.
2 Financial strength ratings for MassMutual and its subsidiaries, C.M. Life Insurance Company and MML Bay State Life Insurance Company are as follows: A.M. Best Company, A++ (Superior); Fitch Ratings, AA+ (Exceptionally Strong); Moody's Investors Service, Aa2 (Excellent); and Standard & Poor's, AA+ (Very Strong). Ratings are as of November 2, 2014 and are subject to change.
3 Sales are classified as weighted sales, which are based on weighted annualized new premium, with single premium payments weighted at 10 percent.
Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyowners. The company has a long history of financial strength and strong performance, and although dividends are not guaranteed, MassMutual has paid dividends to eligible participating policyowners consistently since the 1860s. With whole life insurance as its foundation, MassMutual provides products to help meet the financial needs of clients, such as life insurance, disability income insurance, long term care insurance, retirement/401(k) plan services, and annuities. In addition, the company’s strong and growing network of financial professionals helps clients make good financial decisions for the long-term.
MassMutual Financial Group is a marketing name for Massachusetts Mutual Life Insurance Company (MassMutual) and its affiliated companies and sales representatives. MassMutual is headquartered in Springfield, Massachusetts and its major affiliates include: Babson Capital Management LLC; Baring Asset Management Limited; Cornerstone Real Estate Advisers LLC; The First Mercantile Trust Company; MassMutual International LLC; MML Investors Services, LLC, Member FINRA and SIPC; OppenheimerFunds, Inc.; and The MassMutual Trust Company, FSB.