As an investor who
is interested in the insurance circle, you might be contemplating forming an
insurance company solely on your own or you might want to form the insurance
company in form of a mutual insurance company.
The first option, to
solely form an insurance company, by this you own the insurance company and
control all it day to day running of the company. Over time you can grant
privilege to other investors wanting to buy into your insurance company as a
shareholders and policy holders, at that point in time you are also allowing
others to own part of your insurance company, but not to run the company. You
run and own the company yourself, other policyholder only own the company and
not run it.
The second option,
you can also decide not to start up a fresh insurance company but opt to buy
into an existing insurance company, with this option you own the insurance
company and not run the company. That is
how a Mutual Life Insurance Company Works.
Mutual Insurance Company is owned by its policyholders.
A mutual insurance
company is owned by its policyholders.
Meaning that you have more than one person as shareholder of the
company, and all of them all own the mutual insurance company but don’t run it
by their self. Therefore, if you wish to own an insurance company but not run
it by yourself then you can buy into a mutual insurance company.
Mutual insurance policyholders, are entitled to share in the
company's profitability.
You as a policyholder of a mutual insurance company, you are
entitled to the companies net profit which will be giving out in form of
dividend, that is one of your benefits and ROI from been part of a Mutual
insurance company.
The dividend is
distributed in a proprietary manner based on length of time the policy is
inforce, underwriting classification, cash values, etc.
There are instant when members can vote on officers who actually run the
company.
Lastly, I want you to note this: if you decide to venture into mutual
insurance company, it like you owning a stock in a company.
Remember, when you own STOCK, you own a share of ownership
in that company but you don’t run it.
