Which Type Of Life Insurance Pays A Dividend? 
Whole Life policies that are issued by Mutual insurance companies are the ones that participate in Dividends . Stock companies , which are by far the way the majority of insurance companies are set up , are those that have `` gone public '' as to their holdings and have sold their ownership to stock holders in order to raise money . As a result they are primarily answerable to their stock holders , and then secondarily to the policy holders . This effects their investment strategies with regard their general account . Mutual companies are owned by the policy holders and therefore are answerable to the policy holders and not stock holders . As a result a portion of the profits generated by the investments of the Mutual company are paid to the `` participating '' policy holders in the way of dividends . Term policies are not participating and do not have any cash value . 