Policyholder Dividend (Insurance & Financial Protection) - Definition, Examples, Advice | Bolder Money

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Definition

A refund given to policyholders when the insurer performs better than expected. It rewards you for keeping a low number of claims.

What to consider

Determine the appropriate level of risk to retain.
Ensure you have funds available to cover retained losses.
Review the potential impact on overall risk exposure.

Real world scenarios

A company chose to retain a portion of risk by not purchasing full coverage for minor losses.
An entrepreneur decided to self-insure smaller claims to reduce premium costs.
A business set a risk retention level, agreeing to pay the first $5,000 of any claim.

Related terms

Insurance & Financial Protection

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