How does insurance pay dividends?

Buying dividend insurance products now is definitely more cost-effective than traditional insurance products. Dividend insurance products not only have the basic guarantee function of traditional insurance products, but also have the ability to share the actual operating results of insurance companies with customers. So how does insurance pay dividends? Here is a brief introduction.

The dividend of dividend insurance comes from the distributable surplus generated by dead interest, spread and expense interest.

(1) Death profit refers to the surplus generated when the actual risk occurrence rate of an insurance company is lower than the expected risk occurrence rate, that is, the actual number of deaths is less than the expected number of deaths;

(2) Interest spread refers to the surplus generated when the actual investment income of an insurance company is higher than the expected investment income;

(3) Fee difference refers to the surplus generated when the actual operating and management expenses of an insurance company are lower than the expected operating and management expenses.

At present, the dividends of insurance companies in the market mainly include American dividends and British dividends, that is, cash dividends and insured dividends. Cash dividend is a dividend method in which the insurance company distributes the distributable surplus to customers in a certain proportion in the form of cash dividend at the end of the year; Dividend on insurance amount means that the insurance company pays dividends according to the amount of premium and increases the dividend to the existing insurance amount of the policy. Although these two dividend distribution methods can bring benefits to customers in essence, their different characteristics are applicable to different groups of people and each has its own advantages.

From the perspective of short-term income, the income from insured dividends is more advantageous. Because the cash dividend is based on the cash value of the policy, the cash value at the initial stage of insurance is low, the cash dividend at the initial stage is very small, and the short-term income is less than the dividend method based on the insured amount.

From the perspective of liquidity and flexibility, cash dividends are better. The insured dividend can only be obtained when it expires or an accident occurs, while the cash dividend can be kept or withdrawn. As long as you want to receive cash dividends, you can get them. If you don't want to take it, you can accumulate interest or pay premiums.

How does insurance pay dividends? Insurance dividend is a cash dividend or value-added dividend according to a certain proportion, which is characterized by: the insured enjoys the operating results; Customers bear certain investment risks; The final actuarial result is conservative.