MassMutual Announces $1.33 Billion Dividend Payout for Policyholders

SPRINGFIELD, Mass., Oct. 31, 2011 /PRNewswire/ -- Massachusetts Mutual Life Insurance Company (MassMutual) announced today it has approved payment of an estimated $1.33 billion in dividends to eligible participating policyholders in 2012, an increase of $105.5 million over the prior year, representing an 8.6 percent increase.  The annual dividend, which MassMutual has paid to policyholders consistently since the 1860's, is one of the key benefits of purchasing a participating policy from a mutual company that is operated for the benefit of its policyholders.

"In a continuing unstable economic environment, consumers are seeking security with financially strong, stable companies that truly have their best interests in mind," said Roger Crandall, Chairman, President and CEO, MassMutual.  "The value of doing business with a mutual company has never been more abundantly clear, and MassMutual is proud to deliver on that enduring value by continuing our legacy of strong dividend payouts.  Our increased dividend payout in 2012 demonstrates our longstanding commitment to mutuality, financial strength, and those who matter most to us, our policyholders."

The total dividends for 2012, approved by MassMutual's Board of Directors, include a dividend interest rate of 7.0 percent on all eligible participating life insurance policies(1).  This announcement comes at a time when MassMutual maintains among the highest financial strength ratings(2) in its industry and is reporting record levels of surplus(3) ($11.2 billion as of 9/30/11) and total adjusted capital ($13.4 billion as of 9/30/11), which are key indicators of the company's overall financial strength.  Over the past 50 years, the company has paid more than $25 billion in dividends to eligible participating policyholders.

"The celebration of our 160th anniversary this year reminds us that the hallmarks that have made MassMutual successful – our financial strength, our integrity, and our commitment to our policyholders – are as clear and as steadfast as they were when we first opened for business in 1851," Mr. Crandall continued.  "More than a century and a half after we were founded, we are still providing the strength and stability people have come to expect from us, and we look forward to continuing to make doing business with MassMutual a good decision."

Customers who purchase eligible participating products from MassMutual receive an equitable share of the company's divisible surplus in the form of dividends as approved by MassMutual's Board of Directors each year.  Dividends, which are not guaranteed, are primarily the combined result of investment earnings, mortality and expense experience.  The 2012 increased dividend payout is primarily due to the increase in the investment return on assets backing the company's participating product portfolio, which was driven largely by the company's long-term investment strategy.

Dividends for a given policy are influenced by such factors as policy series, issue age, gender, underwriting class, policy year and policy loan rate, as well as changes in experience.  Of the total $1.33 billion dividend payout, an estimated $1.31 billion has been approved for eligible participating policyholders who have purchased whole life insurance, the company's core product.

"Whole life insurance is versatile, flexible and provides a sense of stability that remains very compelling in this environment," said Michael Fanning, Executive Vice President and head of MassMutual's U.S. Insurance Group.  "Along with a guaranteed death benefit, cash value and premiums, the potential to receive dividends is one of the many benefits of whole life insurance.  That is especially important during these turbulent economic times, when people are looking for an option with benefits that do not fluctuate with the rise and fall of the stock market."  

Policyholders can use dividends for a broad range of purposes.  Options include 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 10/30/2011 and are subject to change.

(3) Surplus is the amount the company has on hand after setting aside reserves to meet projected future obligations.

Founded in 1851, MassMutual is a leading mutual life insurance company that is run for the benefit of its members and participating policyholders. 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 policyholders every year 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.

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Mark Cybulski
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SOURCE MassMutual