dividends
On participating policies, a
non-guaranteed return of part of the premium intended to reflect a
company’s favorable operating experience. Dividends are usually
expressed as dollars per $1,000 of coverage. The size of a dividend
reflects a company’s expense, mortality, and investment experience.
Dividends are not taxed when they are paid because the Internal Revenue
Service considers them refunds of previous overpayments of premiums.
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