Insurance Dividend

Money paid to cash value life insurance policyholders with participating policies, usually once a year. Dividend rates are based on the insurance company's mortality experience, administrative expenses, and investment returns. Lower mortality experience (the number of policyholders dying) and expenses, combined with high investment returns, will increase dividends. Technically, dividends are considered a return of the policyholder's premiums, and are thus not considered taxable income by the IRS. Policyholders may choose to take these dividends in cash or may purchase additional life insurance.

Money paid, usually once a year, to Cash Value Life Insurance policyholders with participating policies. Dividend rates are based on the insurance company's mortality experience, administrative expenses, and investment returns. Policyholders may choose to take these dividends in cash or may purchase additional life insurance.