Whole Life Insurance Dividends: What They Are and How They Work

Do you love the idea of getting whole life insurance dividends, but are stuck comparing one company’s dividend performance to another? Should you go with the company that has the highest dividend rates? What do the dividend rates even mean? How do I consider how dividends will impact my long-term cash value growth? Will the company meet its projections? https://www.youtube.com/watch?v=AwW0cKHR-sA We have welcomed the former Regional VP of Lafayette Life Insurance Company, Perry Miller to talk with us about whole life insurance dividends. So if you want to see how dividends work, understand how they will impact your policy in the future, and make the best decision when starting your Privatized Banking policy now, so you’ll get the most use out of your money later, tune in below! Table of contents* What is a Whole Life Insurance Dividend?* The Guarantees of Whole Life Insurance* 4 Myths of the Whole Life Insurance Dividend* 1. The highest declared dividend means you’ll get more growth in the long term.* 3. Dividend rates mean the same thing from one company to another.* 3. Today's dividend rate on the illustration means guaranteed dividend rates in future years.* 4. Everyone gets the declared dividend.* Direct recognition* Look Deeper than Whole Life Insurance Dividends* Who is Perry Miller?* Ready to Start Your Life Insurance? What is a Whole Life Insurance Dividend? There is some confusion in the marketplace equating whole life insurance dividends with stock dividends, however, they’re not the same. Stock dividends are issued from investing, while mutual companies issue dividends attached to their whole life insurance product. These dividends are a calculation of a few factors, including expense and interest rate forecasts, portfolio performance, and mortality rates. The Guarantees of Whole Life Insurance Premium, death benefit and cash value are guaranteed by mutual insurance companies. Dividends are the icing on the cake. By charter and by law, insurance companies must pay contractual guarantees. If rates, mortality, and expenses change or fluctuate, that can affect the company’s ability to pay those guarantees. So the dividend is like the safety valve. If something doesn’t work out as expected, company's will lower dividends to compensate. On the flip side, if those factors do better than projected, you get to participate in higher rates as well. Most companies can boast that they pay dividends regularly, yet do they meet the projections? Not always. However, that flexibility allows them to meet their guarantees. This mechanism allows the companies to give policy owners the certainty o...