What are dividends paid from a life insurance policy usually referred to as?

Dividends paid from a life insurance policy are typically referred to as "bonus returns." These are the portions of the surplus earnings that a mutual insurance company returns to its policyholders based on the company’s profitable operations. The concept of dividends in this context revolves around the idea that policyholders are also partial owners of the company, and as such, they may receive a share of the profits.

When an insurer performs well financially, it may declare dividends to its policyholders, reflecting their contribution to the insurer's success. These dividends can be used in a variety of ways, including reducing premium payments, purchasing additional insurance, or receiving the cash value.

Understanding this terminology is important as it helps differentiate between various terms associated with life insurance policies and their financial outcomes for policyholders. "Bonus returns" specifically highlights the idea of profit sharing with policyholders rather than merely refunding premiums or other investment-related terms.