2007-08-09 06:51:04 · 7 answers · asked by Anonymous in Business & Finance ➔ Insurance
Effectively, it's a profit sharing check - the claims for the policy year were lower than they thought they would be, so you get some money back.
Very, very few insurance companies do this any more.
2007-08-09 06:55:26 · answer #1 · answered by Anonymous 7 · 0⤊ 0⤋
1
2016-09-25 20:01:42 · answer #2 · answered by ? 3 · 0⤊ 0⤋
If you own insurance with a Mutual insurance company, you get dividend checks. A mutual insurance company is like a co-op, your membership also gives you a percentage of the business.
When the business makes money, it distributes dividends.
Stock insurance companies issue their dividends to the stockholders instead of the policyholders. It's rarely enough money (if ever) to be a deciding factor in which policy to get.
-->Adam
2007-08-09 06:55:15 · answer #3 · answered by great_and_mighty_adam_levine 4 · 0⤊ 0⤋
A dividend from a mutual company is technically considered an over-charge of premiums. A mutual company is not allowed to retain profits, so they either need to spend it all or send its policy holders a check.
A dividend from a stock, on the other hand, is taxable because it is profit to the share holder.
2007-08-09 07:01:05 · answer #4 · answered by aaron p 5 · 1⤊ 0⤋
clarifying aaron's answer
ANY insurance dividend check is simply a return of overpaid premium. This is an IRS definition. That is why it is not taxable.
They charge u more premium than necessary. If they don't spend it all on claims they give some back to u.
Neat way to run a business.
2007-08-10 03:48:19 · answer #5 · answered by Bill R 7 · 0⤊ 0⤋
Not quite sure how to answer this
2016-07-30 01:03:03 · answer #6 · answered by Anonymous · 0⤊ 0⤋
Hurrah, that's what I was exploring for! Thanks to author of this question.
2016-08-24 11:34:31 · answer #7 · answered by Anonymous · 0⤊ 0⤋