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Show Q. I overheard someone talking about dividends on his insurance policy at a party I went to last night. I didn't know the person speaking, so didn't want to ask, but could you explain this to me? A. Certainly. A life insurance insur-ance policy dividend is part of the premium returned to you after the company pays for benefits and expenses and sets aside reserves for future benefit payments. Dividends are only paid out on what are called participating policies, usually after the policy has been in effect a few years. There's no guarantee that the company will always pay these dividends, and these policies often call for higher premium payments. |