If you choose to receive cash, you can receive cash directly with dividends. If you choose to accumulate interest, the dividend will increase with compound interest according to the interest rate stipulated by the insurance company. If you choose to pay the premium and use the bonus to pay the premium, you can prepare a little less cash for the policy every year. If you choose to purchase the paid insurance, you will take the bonus as the premium and increase the insured amount according to the same contract conditions.
Fund dividend means that the fund company distributes part of the fund income to investors as a return on investment. In the long run, insurance companies will pay dividends in time, but this part of the funds can not be effectively used, which will reduce investment assets. The annual dividend will also constitute the cash flow pressure of insurance companies, reduce the investment ratio of long-term assets, affect the total investment benefit to a certain extent, and ultimately affect customers to get dividends.
Dividends are distributed on the basis of the insured amount, and the current dividends are increased to the existing insured amount of the policy, so that the insured can meet their growing demand for protection without underwriting and applying for increasing the insured amount during the protection period, and to some extent, the depreciation of protection that may be brought about by inflation can be alleviated.
Fund dividend reinvestment means that when a fund pays a cash dividend, the fund holder directly purchases the fund with the cash obtained from the dividend and converts the dividend into the fund share held. For fund managers, there is no cash outflow from dividend reinvestment, so dividend reinvestment usually does not charge subscription fees.
If the fund reinvests in dividends, how much share to increase is calculated according to the net value on the day of dividends. Bonus/net worth = increased share. Although the subscription before dividends can get dividends and be converted into fund shares, the subscription after dividends can buy more fund shares with the same subscription amount due to the decline in the net value of the fund. Fund dividend means that the fund company distributes part of the fund income to investors as a return on investment. Cash dividend method is a dividend method in which fund companies distribute part of fund income to fund investors in cash. Dividend reinvestment is a way for fund investors to reinvest the cash dividends obtained from dividends in the fund to obtain fund shares. If it is a short-term investment, it is recommended to pay dividends in cash. If it is a long-term fixed investment, it is recommended to turn dividends.