I heard whole life pays dividends — but what does that really mean?

This question comes up constantly when we talk with business owners and high-earning professionals about Privatized Banking. And honestly, I get it.

The world of whole life insurance dividends can feel a little murky. Confusing. 

https://youtu.be/AwW0cKHR-sA

So we brought in someone who knows this stuff inside and out: Perry Miller, former Regional VP of Lafayette Life Insurance Company. Perry spent decades in the trenches, helping advisors and families navigate the complexities of whole life insurance.

So if you want to see how dividends work, understand how they will impact your policy in the future, and make the best decision when starting your Privatized Banking policy now, so you'll get the most use out of your money later, tune in below!

Quick Highlights

In this article, you'll discover:

What whole life dividends actually are (and why they're completely different from stock dividends)

The 4 biggest myths about dividend rates 

Why comparing dividend rates between companies is almost meaningless

How to use dividends strategically to build generational wealth

The track record of mutual companies paying dividends for 150+ years through every economic crisis

What's guaranteed vs. what's not in your whole life policy

Where Whole Life Insurance Fits Into the Bigger Picture

Privatized Banking with whole life insurance is just one part of the bigger journey.

That’s why we’ve developed the 3-step Cash Flow System. It’s your roadmap to go from just surviving to a life of significance, purpose, and financial freedom. 

The first stage is the foundation. You first keep more of the money you make by fixing money leaks, becoming more efficient, and profitable. 

Then, you protect your money with insurance, legal protection, and privatized banking. 

Finally, you put your money to work, increasing your income with cash-flowing assets.

Table of contentsWhere Whole Life Insurance Fits Into the Bigger PictureWhat Are Whole Life Dividends?The Guarantees of Whole Life InsuranceHow Dividends Are CalculatedDividend Payment Options ExplainedPaid-Up AdditionsTaking CashPremium OffsetAccumulate at InterestWhy Dividends Actually MatterYour Money Compounds FasterYour Family Gets Better ProtectionYou Get More Financial Scope4 Myths of the Whole Life Insurance Dividend1. The highest declared dividend means you’ll get more growth in the long term.2. Dividend rates mean the same thing from one company to another.3. Today’s dividend rate on the illustration means guaranteed dividend rates in future years.4. Everyone gets the declared dividend.Direct Recognition vs. Non-DirectHistorical Reliability and Future OutlookLooking Deeper than Whole Life Insurance DividendsWho is Perry Miller?

What Are Whole Life Dividends?

There is some confusion in the marketplace equating whole life insurance dividends with stock dividends; however, they’re not the same. 

So, does whole life insurance pay dividends?

Yes. But here's what they actually are: returns of excess premium from mutual insurance companies to their policyholders.

These dividends are a calculation of a few factors, including expense and interest rate forecasts, portfolio performance, and mortality rates.

If they do better than expected on any of those fronts, they share some of that "extra" with you. That's your dividend.

In short, stock dividends come from profits from investments. Dividend insurance comes from the insurance company's operational performance.

The Guarantees of Whole Life Insurance

Your whole life policy guarantees three things, period:

Your premium (it won't go up)

Your death benefit (it won't go down)

Your cash value growth (it will happen)

Everything else? Including dividends? NOT guaranteed.

Dividends are the icing on the cake. By charter and by law, insurance companies must pay contractual guarantees.