Participating Policies

Insurance contracts that pay the policyholder dividends over time.

Participating Policies

Usually paid out annually over the life of the policy, participating policy dividends come from the profits of the insurance company that sold the plan. Most include a final or terminal payment paid out when the contract matures, and some include a guaranteed dividend amount determined at the time of purchase.

If you buy one of many participating policies, you may either choose to apply dividends to your premiums, hold them in an interest-bearing account, or take them out as a cash payment.

 

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