What is a Life Insurance Dividend?

What is a Life Insurance Dividend?

A life insurance dividend is a non-guaranteed payment from the insurance company to the policy owner representing profits the company earned during the policy year.  Insurance companies often view dividends as a sharing of the surplus created by their insurance activities among policyholders whose insurance contracts generate profits beyond the insurer’s expectations. A dividend also …

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Is IUL Good for Retirement?

Is IUL Good for Retirement?

Indexed universal life insurance (or IUL) can be good for retirement because it protects your savings from stock market crashes. It also has the potential to earn more than a whole life insurance policy. IUL is able to accomplish this slightly higher return potential because it uses index accounts that are linked to the movement …

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Should you Hire a Fee-Only Insurance Advisor?

Should you Hire a Fee-Only Insurance Advisor?

Fee-only insurance advisors provide advice on insurance-buying decisions free of the potential conflicts posed by commissions.  Fee-only advisors receive compensation through a fee you agree to pay them for their work.  In exchange for their fee, these advisors will review the facts of your specific buying situation, insurance proposals you received from agents, and make …

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How Does the Guaranteed Insurability Rider Work?

How Does the Guaranteed Insurability Rider Work?

The guaranteed insurability riders, also known as the future purchase option, future increase option, guaranteed purchase option, or guaranteed increase option rider, allows the insured of a life or disability insurance policy to purchase additional coverage without going through a new medical exam. This rider can help an insured purchase additional amounts of insurance when …

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A Complete Guide to the Modified Endowment Contract (MEC)

A Complete Guide to the Modified Endowment Contract (MEC)

What is a Modified Endowment Contract? A Modified Endowment Contract (MEC) is a life insurance policy that fails the 7-pay test established by the Tax and Miscellaneous Revenue Act of 1988 (TAMRA). Failure of this test reclassified the life insurance policy, which comes with several changes to the taxation of the insurance contract. It’s important …

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