The policyholders own mutual life insurance companies, whereas shareholders own stock life insurance companies.

 

According to Nelson Nash, the reason that mutual companies are preferable is that they focus on keeping the policyholders happy, not stockholders, which makes a lot of sense!  One way this manifests is mutual companies may pay higher dividends to policyholders as a return of premium, versus a stock company that must focus on maximizing profits for stockholders.