What type of policies do mutual insurance companies issue?

Mutual insurance companies primarily issue participating policies. These types of policies allow policyholders to share in the company's profits through dividends or reduced premiums. The structure of mutual companies means that the policyholders are essentially the owners of the company. As a result, any surplus that the mutual insurance company generates can be distributed among the policyholders, thereby enhancing their financial interest in the company's performance.

In contrast, non-participating policies do not provide policyholders with the opportunity to receive dividends; typically, they are issued by stock insurance companies. Accidental policies and commercial policies refer to specific coverage types and are not inherently linked to whether a company is mutual or another type. Therefore, the correct classification of the policies issued by mutual insurance companies is indeed participating policies, wherein the policyholders have a direct stake in the financial outcomes of the company.