Policy dividends paid on participating policies are a return of unused premium based upon the claims experience of the mutual insurance company.

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Policy dividends paid on participating policies are a return of unused premium based upon the claims experience of the mutual insurance company. They are distributed to policyholders and are not guaranteed but depend on the company's financial performance. Therefore, policy dividends are considered a true return of premium and not taxable income.

Policy Dividends Paid on Participating Policies Are a Return of Unused