A large mutual insurer says it will be continuing to pay a divided to policyholders despite the recent investment market slump.

The board of Northwestern Mutual Life Insurance Company, Milwaukee, says it will be paying the holders of its participating insurance policies a total of about $4.6 billion in dividends in 2009.

The company paid about $5 billion in dividends this year.

The company has cut the 2009 dividend rate on unborrowed funds in most permanent life insurance policies to 6.5%, from 7.5% this year.

Northwestern has paid dividends every year since 1872.

Most of the 2009 dividends will go to life insurance policyholders.

Dividend payments will increase to $206 million, from $160 million, for disability insurance policyholders, and to $8.8 million, from $6.1 million, for long term care insurance policyholders.

“The current market turmoil is unprecedented and presents significant challenges to all financial companies,” says Edward Zore, president Northwestern. “Northwestern Mutual is not immune to market changes. But as a mutual company with more than 150 years of experience, we can maintain our focus on the long-term interest of our clients and policyowners.”