Other than basic insurance protection, you can also receive yearly dividends. When you purchase your insurance policy, the premiums you have paid are deposited into a participating account and invested. The dividends are a portion of the surplus or excess cash from this account. The participating account is affected by main factors: returns on investments, mortality, lapsed policies, expenditures and taxes. Dividends are calculated yearly by the insurance company, and the amount for distribution can vary based on the actual and expected experience. In general, the dividend scale interest rate increases the longer you keep your policy and pay premiums. Even though there is no guarantee that the insurance provider will pay dividends, they have never failed to be credited to their policy owners over 172 years in Canada despite today’s low-interest rate environment.