Did You Know / January 2025

Finally, Life Insurance Dividends Have Increased: What This Means for Whole Life Policyholders

As we step into 2025, we’re seeing a notable shift in life insurance dividend rates—an increase that marks the largest in two decades.

After years of declining dividend rates due to low-interest environments, several major life insurance carriers have raised their dividend interest rates for 2025:

  • Northwestern Mutual: 5.50% (up from 5.15%)
  • MassMutual: 6.40% (up from 6.10%)
  • Guardian: 6.10% (up from 5.90%)
  • New York Life: 6.20% (up from 6.00%)
  • Penn Mutual: 6.00% (up from 5.75%)

While this increase is a step in the right direction, it’s crucial to remember that dividends are just one factor in the overall performance of your clients’ policies. Other considerations, like mortality and expenses, can also influence policy performance.

If you haven’t reviewed your clients’ life insurance policy in the last 3 years, we strongly recommend a current in-force illustration to ensure the policy is still on track to meet your original funding projections.

WHY?

Policies purchased years ago may have underperformed, leading to unexpected tax implications, higher costs, or even the risk of policy termination.

We understand the importance of making informed decisions about meaningful life insurance policies. With evolving estate tax laws and economic changes, a policy review is essential.

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