What is a dividend in life insurance? “The dividend is a portion of the insurance company’s profits paid to policyholders as if you were an investor or stockholder,” writes Frank Addessi. The short and simple is that a dividend is a payout of the company’s profits. These dividends can be relatively large in terms of the payout. However, the payout size directly correlates to the company’s profit and financial status. In a recent email, Mutual Trust said: “Mutual Trust Life Insurance company will increase its dividend payout in 2020. This announcement by the Organization’s Board of Directors is based on Mutual Trust’s solid financial position and dedication to its policyholders.”
What policies are eligible to receive dividends?
As many of you already know, generally, whole-life policies are the only policies eligible for dividends. This scenario can be a good selling point for any agent trying to get more involved in the life and financial markets. Most people don’t know about products or companies like this one. Of course, many consumers look for the best price for the best product.
How can my client use this dividend?
There are several options out there. For starters, they can get the dividend as a cash payout at the end of every year. Additionally, they could use the dividend to grow the policy’s cash value. This action saves money and allows it to gain interest with the insurance company. Another option might be a premium reduction. You can suggest they use the dividend to reduce the premium for their coverage. They can also purchase more insurance. This decision is good for growing the death benefit and leaving more money for their beneficiaries after the policyholder has passed.
When is the dividend effective for Mutual Trust?
Mutual Trust will push its new dividend payouts on February 1, 2020. You can speak to our agent about this policy. Give us a call, and we would love to help you better understand the inner workings of dividends and how they work to benefit your client’s policy. Just ask to speak to the Life and Financial Department. 1-888-539 1633. With that said, this is a tremendous opportunity to help your client and dip your toes into the life and financial aspects of insurance. These policies tend to be easier to sell since there is an extra benefit included. Remember, not all insurance companies offer dividends on their policies.
2020 Illustrations
As an added note Mutual Trust had this to say in their email “To help you run illustrations for new business sales, our century II illustrations software, version 5.98, will reflect the 2020 dividend payouts. Version 5.98 will be available for download from the agent website on December 2, 2019.”
Agents
We hope that this information on dividends is useful to you.
Empower Brokerage is dedicated to helping you make informed decisions about your health and finances. Whether it’s through webinar training, one-on-one calls, seminars, or marketing plans, we want you to be successful!
Give us a call at 888-539-1633 or leave a comment below if you have any questions.
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