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
Average interest earned by an insurer on its investments after investment expense, but before federal income tax. ...
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Individual who retains title to property that is being transferred on a temporary basis to the care, custody, and/or control of another. ...
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Amendment to a will that adds or modifies clauses in that will, such as adding an additional beneficiary or piece of property. ...
Bureau insurer that files its statistical and underwriting experience with a rating bureau. ...
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