Life insurance policies that pay dividends are known as participating policies. These policies act like a form of permanent life insurance, but with the added benefit of dividend distributions from the insurance company.
Participating policies have a number of benefits that make them an attractive option. Firstly, they offer cash value growth on a tax-deferred basis. This means that policyholders can benefit from their policy cash value without paying taxes until they make a withdrawal or a policy loan. In addition, these policies offer death benefit protection, which can help provide financial security for families in the event of the policyholder’s death.
Finally, participating policies may also pay dividends to the policyholder. These dividends are based on the insurer’s financial performance and can be paid out yearly or periodically, depending on the insurer. The amount of dividends paid to the policyholder is not guaranteed and can vary depending on the insurer’s performance.
If you are interested in learning more about life insurance policies with dividends, you can speak to your insurance broker or financial advisor for more information. Additionally, you can find further information about participating policies here: [INSERT LINK].