What Are Life Insurance Dividends? 
What are life insurance dividends ? Dividends are a part of working with a mutual life company and by IRS code are considered a return of overpaid premium to the policy holder and are not taxed as income . The dividends are made up of savings from operations overhead , a surplus left from death benefit reserves and the company investment portfolio returns . Dividends are not guaranteed as all three of these main components can be projected , but not `` known '' in advance . 