Dividends

Dividends refer to a share of the insurance company's profits that may be distributed to policyholders.

While traditional whole life insurance policies often pay dividends, it's important to note that IUL policies typically do not guarantee dividends. Instead, IUL policies allow policyholders to potentially earn interest based on the performance of a specific market index, such as the S&P 500.

The interest credited is not a dividend but is instead determined by the participation rate, cap, and floor set by the insurance company. Policyholders should carefully review the terms of their IUL policy to understand how interest is credited and if any dividends are payable.