More insurance confusion – dividends?
yellowhummin217 asked:
Dividends can be used to purchase paid-up additions. “The dividend is taken by the company and used to purchase permanent insurance of the same type. The insurance is in effect a small single premium whole life policy…To achieve its maximum value, it requires a relatively long period of time.”
Dividends can be used to purchase paid-up additions. “The dividend is taken by the company and used to purchase permanent insurance of the same type. The insurance is in effect a small single premium whole life policy…To achieve its maximum value, it requires a relatively long period of time.”
Okay, it sounds to me like these dividends actually purchase another POLICY, rather than adding to the existing policy. Is this correct? Will somebody translate this into a dumbed-down form for me?
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