How does life insurance dividends work?

How does life insurance dividends work?

INSURANCE
Life insurance dividends can put extra cash in your pocket, lower your premiums or beef up your coverage. However, not all life insurance companies pay dividends, and those that do can calculate them differently and offer different ways to use them. What are life insurance dividends? A life insurance dividend is a return on your life insurance premiums. It's generally based on how your insurer performs for the year. If the company does well financially — meaning it had successful returns on its investments, paid out less in claims and had lower operational costs than expected — then it may return some of the overpaid premiums to you in the form of dividends. These payouts are not guaranteed. The insurance company's board of directors decides annually if and how it…
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What are life insurance exclusions?

What are life insurance exclusions?

INSURANCE
As you get older, having a life insurance policy in place may allow you to leave money to your loved ones if you pass away. However, not everyone knows that there are certain exclusions that might prevent your beneficiaries from claiming your death benefit. If you have a life insurance policiesit's important to know what those exclusions are so your loved ones can avoid any surprises following your death.Common life insurance policy exclusionsA life insurance exclusion is a situation or circumstance that prevents your beneficiaries from receiving it death benefit. Essentially, it means that certain causes of death are not covered by the policy. Life insurance exclusions are regulated at the state level, but insurance companies can decide which of those exclusions they include in their policies. Exclusions will be…
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Can I buy a life insurance policy for my parents?

Can I buy a life insurance policy for my parents?

INSURANCE
If you're an adult child, you may carry a financial burden when your parents pass away or require extensive care. By taking out life insurance on a parent, you can get the money you need to cover final expenses, outstanding debts and lost income. While an uncomfortable topic, having a thoughtful discussion with your parents about life insurance can help protect their legacy. Can you buy life insurance for your parents? You can buy life insurance for your parents, but you need to have an “insurable interest” in their lives. This means you stand to suffer financially from their death. “Insurable interest can exist based on family relationships or for others that may have a financial loss when someone dies,” said Keith Wallace, senior benefits business development manager at PCF…
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