Difference between a Stock and a Mutual Insurance Company

The main difference between a Stock Insurance Company and a Mutual Insurance Company is that the Stock owned company is responsible for making money for the stock holders where as a Mutually owned company is responsible for making money for the Policy Holders, which would be YOU.

A stock owned insurance company must keep their stock holders happy. There are no stock holders in a mutually owned life insurance company. Why does that matter? The stock insurance companies have incentive to take risks, they are therefore vulnerable to the pressures of maximizing short term quarterly profits in order to please stock holders. Oh and any dividend gains the stock holders receive are of course taxed.

The executives of a Mutually Owned Insurance Company have a totally different mind-set though. They answer to their shareholders who are their policy holders. Their focus is to guarantee maximum benefits to the policy holders and are not pressured to take risks to maximize short term profits. This allows management to always have in mind the long term safety, security and return for YOU the policy owner & shareholder.

The policy holders actually own a share of the company and so partake in the profits of the company as well. Any dividend gains the policy holders receive are tax free because they are considered a return of premium. A return of an overpayment of premium. The stock company policy holders were over charged also, but to the benefit of the stock holders not the policy owners.

These facts alone show exactly why the safest place to park and grow your money is in a Mutual Insurance Company.

In December of 2008 FORBES magazine wrote an article, a portion of which can be seen below. It depicts the contrast and consequences between management working for stock holders and working for policy holders stating: “With their survival on the line , publicly traded insurers are scrambling for cash by cutting dividends, and issuing new shares (diluting existing investors) begging regulators for a relaxation of capital requirements and lobbying Washington for a cut of the $700 billion wall street bailout. Their Mutually owned rivals haven’t asked for a dime. Their statutory surpluses (the regulatory counterpart to book value) have held steady or even increased. Some are announcing plans to pay out near record dividends to policy holders. This might explain why Mutually Owned  Insurance Companies have paid out dividends  every year , year after year for over 100 and some over 150 years even during the depression.”

To understand further, the value of being a part owner in a Mutual Life Insurance Company please read best selling author Nelson Nash’s book, ‘Becoming Your Own Banker’. Also, along with Nelson’s book you must also read ‘How Privatized Banking Really Works’.

So if you are looking for a safe place to not just park your money but to flow your money through, beware, there are over 2000 insurance companies in the USA but only 38 are Mutually owned. Of all these insurance companies only one has fully embraced the concepts depicted and described in these books. And the type of policy necessary to properly function like a private banking reserve system must be structured in a way that best suits the clients goals. Only a qualified, experienced, professional agent who has been trained by Nelson and his top trainers and who work in close relationship with this particular Mutual Company can satisfy all these requirements.

So, do you want your insurance company working for YOU or working for who knows who? Do you want a return of your premiums over time so your insurance really ends up costing you nothing, or do you want to just keep paying for insurance that is funding someone else’s pocket?

Call me today so we can set up an appointment to get you started on your educational process of understanding how permanent insurance can be set up and used as your own private banking reserve system, as described in the two books above.

Jennifer Hansen 845-649-7487 or jennifer @ debtdiagnosis.com

If you haven’t yet purchased Becoming Your Own Banker by Nelson Nash, do so now.

 

                                                                     

 

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September 20, 2010 · Jennifer · 6 Comments
Tags: , , , , , , , , , , ,  · Posted in: FINANCIAL EDUCATION 101, STOCK vs MUTUAL Insurance Co's, Stock vs Mutual Insurance Companies

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