What is meant by dividend policy?

Question

What is meant by dividend policy?

Answer 1

Dividends in insurance policies are not the same as dividends in investments.

Dividends in insurance policies are where you have overpaid your premiums and the insurance company refunds it back to you as a dividend. This is most common in variable universal life policies.

Dividends in investments is where company has earn profits and shares those profits to its shareholders.

Answer 2

your question is cool but i dont now sorry

Answer 3

It depends what the dividends go towards.

I used to have a whole life policy that built cash value and also paid dividends separately.  Depending upon what you decided, the dividends could be used to buy more insurance, pay part of premiums, or maybe eventually pay up the insurance (no more premiums).

But since my 401(k) was building up and cash value was going to build more slowly due to insurance cost for my age, I cashed out (surrendered) the policy to pay some bills and start a Roth IRA.

Note that insurance dividends are not taxed (return of premiums), but interest on accumulated dividends is taxed.