Mass Mutual announces $1.35 billion dividend

Massachusetts Mutual Life Insurance Co. today approved a dividend payment of $1.35 billion to its policyholders for next year. That total payout for 2009 reflects a dividend interest rate of 7.6% on new eligible participating life insurance policies. The dividend announcement comes at a time when cash-strapped companies have begun cutting back their payouts to protect their balance sheets and shore up capital. A number of insurers have already announced that they would cancel their dividends for the rest of this year, including Aegon NV of The Hague, Netherlands, and ING Groep NV of Amsterdam, Netherlands. Because MassMutual of Springfield isn’t owned by stockholders and functions as a mutual, customers who buy certain products from the insurer receive a share of its divisible surplus as a dividend. Those dividends come from investment results, mortality savings and savings on expenses. Dividends also vary according to the policy series, issue age, policy duration, changes in mortality experience and policy loan rate.