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Mutual Life Insurance Participating
Whole Life Insurance Dividends
History
Presented by: Kevin Wenke
Certified Financial Planner
Orlando, Florida 32801
Decision Tree Financial
Guardian Life Insurance Company
MassMutual Life Insurance Company
New York Life Insurance Company
Northwestern Mutual Life Insurance Company
The Dividend Interest Rate (or DIR) is just one component
of a three factor dividend formula that for all mutual
carriers includes:
 Mortality: to the extent mortality experience is better
than guaranteed expectations, the dividend will be
positively impacted
 Expenses: expense results are reviewed annually and
compared to pricing expectations to determine the
amount of expense loading assumed in the dividend
 Dividend Interest Rate: to the extent the investment
experience of the company is better than the
guaranteed interest rate assumed in pricing (generally
4%), the excess interest earnings are included.
What Dictates a Whole Life
Insurance Policy Dividend?
Need to Know
Information Before We Start
Dividends are not guaranteed and are declared
annually subject to Board approval for all mutual
carriers.
The DIR alone will not always indicate which
policy will perform better – internal expenses are a
factor.
Compare policy cash value and death benefit
internal rate of returns for a better indication of
policies’ relative performance.
MassMutual has two separate dividend scales.
One is for policies issued prior to March 1996 and
another for policies issued since March 1996. The
slides that follow illustrate the DIR histories for
policies issued prior to March 1996.
How Did
Whole Life Returns
Perform vs. The Stock
Market?
30 Year Dividend Interest Rate History 1983 - 2012
4.00
6.00
8.00
10.00
12.00
14.00
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012
Guardian Northwestern MassMutual* New York Life
30 Year Average Return: Guardian 8.98% Northwestern 8.69% MassMutual* 9.10% New York Life 8.67%
CAGR of the S&P 500 1983-2012
10.87% (Growth and Dividend Reinvestment)
Why Have
Whole Life Policy Dividends
Been Falling?
For More Information
Visit www.kevinwenke.com
For More Information
Visit www.kevinwenke.com

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Whole life insurance dividend rate of return history

  • 1. Mutual Life Insurance Participating Whole Life Insurance Dividends History Presented by: Kevin Wenke Certified Financial Planner Orlando, Florida 32801 Decision Tree Financial Guardian Life Insurance Company MassMutual Life Insurance Company New York Life Insurance Company Northwestern Mutual Life Insurance Company
  • 2. The Dividend Interest Rate (or DIR) is just one component of a three factor dividend formula that for all mutual carriers includes:  Mortality: to the extent mortality experience is better than guaranteed expectations, the dividend will be positively impacted  Expenses: expense results are reviewed annually and compared to pricing expectations to determine the amount of expense loading assumed in the dividend  Dividend Interest Rate: to the extent the investment experience of the company is better than the guaranteed interest rate assumed in pricing (generally 4%), the excess interest earnings are included. What Dictates a Whole Life Insurance Policy Dividend?
  • 3. Need to Know Information Before We Start Dividends are not guaranteed and are declared annually subject to Board approval for all mutual carriers. The DIR alone will not always indicate which policy will perform better – internal expenses are a factor. Compare policy cash value and death benefit internal rate of returns for a better indication of policies’ relative performance. MassMutual has two separate dividend scales. One is for policies issued prior to March 1996 and another for policies issued since March 1996. The slides that follow illustrate the DIR histories for policies issued prior to March 1996.
  • 4. How Did Whole Life Returns Perform vs. The Stock Market? 30 Year Dividend Interest Rate History 1983 - 2012 4.00 6.00 8.00 10.00 12.00 14.00 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 Guardian Northwestern MassMutual* New York Life 30 Year Average Return: Guardian 8.98% Northwestern 8.69% MassMutual* 9.10% New York Life 8.67% CAGR of the S&P 500 1983-2012 10.87% (Growth and Dividend Reinvestment)
  • 5. Why Have Whole Life Policy Dividends Been Falling?
  • 6. For More Information Visit www.kevinwenke.com
  • 7. For More Information Visit www.kevinwenke.com