Participating Policies and Dividend Benefits
Protect your loved ones and contribute to your financial growth
Participating Policies and Dividend Benefits
Among the different types of permanent life insurance, the Participating Policy stands out for its unique benefits, including the potential to receive dividends. At einsured.ca, we’re here to help you understand these policies and how they can work for you.
What is a Participating
Life Insurance Policy?
A participating life insurance policy, also known as a “par policy,” offers more than just a death benefit. It allows you to share in the financial success of the insurance company through dividend payments. These policies are designed to not only protect your loved ones but also contribute to your financial growth over time.
Dividend Distribution:
An Attractive Feature
One of the key advantages of participating policies is the opportunity to receive dividends. These are payments made to policyholders from the insurer’s profits and are typically distributed on an annual basis. While dividends are not guaranteed, they are commonly paid by financially strong insurance companies.
Dividend Options
Cash Payout
Receive dividends directly in cash, providing you with immediate funds.
Premium Reduction
Use dividends to lower your insurance premiums, potentially reducing your out-of-pocket expenses.
Paid-Up Additions
Purchase additional coverage without additional premiums, increasing your policy’s death benefit and cash value.
Dividend Accumulation
Leave dividends with the insurance company to accumulate interest, enhancing your policy’s cash value over time.
Loan Repayment
Apply dividends to pay off any outstanding policy loans, reducing your financial liabilities.
Why Choose a Participating Policy?
With the potential for dividends, the benefit of dividend vesting, and the ability to grow cash value, these policies provide a versatile and reliable way to achieve long-term financial goals. Whether you’re focused on building wealth, ensuring family security, or planning for retirement, a participating life insurance policy is a smart choice.
Dividend Vesting: Securing Your Gains
An important feature of participating policies is Dividend Vesting. This means that once a dividend is declared and credited to your policy, it cannot be taken away, even if future dividends are lower or not paid at all. Dividend vesting provides an added layer of security, ensuring that the value built up in your policy is preserved over time.