What Is A Mutual Life Insurance Company? 
Mutual life insurance companies are owned by the companys policy holders , in contrast to stock life insurance companies , who are owned by their stock holders . Mutual life insurance companies maintain a board of directors that declare an annual dividend to their policy holders . A dividend is a return of unused premium . During the early formation of the US , mutual companies were less expensive to capitalize than stock companies , so there was a proliferation of mutual companies . But in recent times there has been a movement in the industry to demutualize to attract more capital . 