What Is A Life Insurance Dividend? 
Life insurance policy dividends can be found on policies which `` participate '' in policy holder dividends which is the divisible surplus of the carrier . These policy dividends are most often associated with participating whole life -LRB- par whole life -RRB- and can be issued by mutual or stock insurance companies . All mutuals have par policies but only a few stock companies have par whole life in their portfolios . This `` return of premium '' is made up of excess investment , mortality , expense and persistency . Dividends are never guaranteed and may be less than projected , especially in times like these where interest rates have fallen and stayed at historic lows . 