Dividend insurance refers to the life insurance products that the insurance company distributes the surplus of actual operation and production to the insured in a certain proportion while obtaining life insurance. The dividend of dividend insurance comes from the "three differences in income" of life insurance companies, namely, the difference in death, the difference in profit and the difference in expenses. Dividend distribution methods mainly include cash dividend method and incremental dividend method. The cash dividend method draws dividends through cash, deducts the next premium and controls cash dividends. For the insured, the choice of cash dividend is more flexible, and the full dividend insurance meets the various needs of customers. Incremental dividend method distributes dividends in the form of increasing the existing insurance amount of the policy. Because there is no cash dividend outflow and the delay of dividend increase the investable assets of life insurance companies, there is no pressure of dividend cash outflow, life insurance companies can increase the investment proportion of long-term assets, greatly increase the investment income of dividend funds and enhance the dividend income of policy holders.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.