What Is A Dividend From A Life Insurance Policy? 
When you see a dividend payment on your life insurance policy it means your life insurance company is a mutual company . This means as a policyholder you are considered an `` owner '' of the insurance company , kind of like a stockholder in a company . The dividends are profits repaid to the policyholders in a form of reducing your premiums when the company makes excess profits for the year . Depending on the type of policy you have , dividends can have options to be paid in cash , reduce loans or increase policy cash value . Common mutual life insurance companies include New York Life and Northwestern Mutual . 