Annual Divident Notification whats that?

[razorxtr]

What is the name of your state? IL

Received an Annual didivent notificaiton

On the sheet it says:
"Up to date statement about the dividents you have earned on your policy. "


And a summary of insurance purchased and total additional insurance purchased on the bottom of the sheet.

Whats all of this mean???

 

[Silverplum]

What is the name of your state? IL

Received an Annual didivent notificaiton

On the sheet it says:
"Up to date statement about the dividents you have earned on your policy. "


And a summary of insurance purchased and total additional insurance purchased on the bottom of the sheet.

Whats all of this mean???

It's like earning interest at a bank. Dividends are like interest.

It's no big deal and of course you're welcome to post, but with questions like this I always wonder, why post here? Why not pick up the phone and call your insurance agent?

 

[xylene]

Whats all of this mean???

I would hazard to guess that you are a policy holder with a mutual insurance company?

Yes.

Ok. Well in a mutual company, YOU, as a policy holder are an owner of the company. Your policy is like a share.

And you are being issued a statement of your dividend as a mutual owner. It is likely that this is just offseting your premium, but some people, like my aunt have paid so much for so long on their life insurance, now they pay no premium, and get a dividend check.

 

[Betty]

It seems from the post they could be using their dividends to buy paid up additions (add'l. ins.) You get a statement showing your dividends + the add'l. amount of ins. they purchased. The amt. will be added to the original face amt. of the policy. You usually have several options as to how you want to use your dividends.

 

[efflandt]

Note that insurance dividends are NOT reported on your income tax (not the same as stock dividends). Although, if insurance dividends accumulate (instead of paying for insurance) and earn interest, the interest is taxable.

If you eventually surrender the policy and get its cash value, they will tell you how much of it is taxable (surrender value minus the amount you paid in exceeding the actual price of insurance).