What Are Life Insurance Dividends?

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    Larry GilmorePRO
    Agent Owner, Gilmore Insurance Services, Marysville, Washington State
    What are life insurance dividends?  Dividends are a part of working with a mutual life company and by IRS code are considered a return of overpaid premium to the policy holder and are not taxed as income. The dividends are made up of savings from operations overhead, a surplus left from death benefit reserves and the company investment portfolio returns. Dividends are not guaranteed as all three of these main components can be projected, but not "known" in advance.
    Answered on June 18, 2013
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