One of the most valuable benefits of a participating whole life insurance policy is the opportunity to earn dividends. Although dividends are not guaranteed, they are an important part of a Whole Life policy. While your policy's guarantees provide you with a minimum death benefit and cash value, dividends give you the opportunity to receive an enhanced death benefit and cash value growth.

Dividends are a way for the company to share part of its favorable results with policyholders. When you purchase a participating policy, it is expected that you will receive dividends after the second policy year — but they are not guaranteed. Dividends, if left in the policy, can provide an offset (and more) to the eroding effects of inflation on your coverage amount.

The Dividend Pie

The three basic factors that make up dividends are Interest, Mortality and Expenses. A good way to visualize these components is through a "dividend pie."

Interest . . .
Usually makes up the largest piece of the dividend pie, but it is not the same interest rate credited on a bank savings account or C.D. The dividend interest rate represents an average of the company's rates of return from a portfolio of long-term, conservative investments.

Mortality . . .
Refers to our claims experience — the amount of death claim payments the Company makes during a given year.

Expenses . . .
Refers to the cost of doing business, such as operating expenses and payment of taxes. The factors in the "dividend pie" are interdependent. It is the net effect of interest, mortality and expenses each year that determines if overall dividends will increase, decrease or stay the same the following year.

The MetLife Portfolio

The assets that are used to determine the amount of dividends are part of MetLife’s general account portfolio. The majority of these assets are high quality, long-term investments that have low volatility. This asset mix will best safeguard MetLife’s financial strength now and in the future—since our financial obligation to our life insurance policyowners is a long-term commitment.