Terminal Dividend
Additional policy dividend paid to a life insurance policyholder when a policy terminates. A mutual insurance company is owned by its policyholders and writes participating policies, which pay annual policy dividends to policyholders. (Some stock insurance companies pay dividends on some policies as well.) In addition to the annual dividend, many policies pay a terminal dividend when the policy terminates after a minimum period in force usually 10 to 20 years. This represents a realm to the policyholder of an equitable portion of the overall increase in the insurer's surplus over this period. Some companies pay this dividend no matter how a policy is terminated; others pay it only under certain conditions.
Popular Insurance Terms
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LIFE INSURANCE: specification by each state regarding the minimum assumptions that must be used in reserve calculations as theypertain to the maximum interest rate that can be assumed; ...
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Membership organization of state insurance commissioners. One of its goals is to promote uniformity of state regulation and legislation as it concerns the insurance industry. The NAIC ...
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Demand without foundation, such as a claim submitted to an insurance company by an insured who caused a loss, or for a loss that never occurred. ...
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