Richard CanfieldPodcast Host and IBC Advisor, Ascendant Financial · Authorized Infinite Banking Practitioner | Author of 4 Books

Cash Dividends vs Paid-Up Additions: The Hidden Trade-Off

30 Jan 2026 · 1 min

Watch on YouTube

0:50

Richard Canfield explains why using life insurance dividends to buy paid-up additions grows your death benefit faster than taking cash. Taking cash reduces future death benefit growth and can eventually trigger taxes on the policy.

Chapters

If you have your policy structured in a way where a portion of your premium, which is optional, is purchasing a paid up addition to the death benefit, if you receive the dividend in cash, whereas I would elect to have my dividend go back in as a paid up addition, then if we had the very same insurance contract, all things being equal, then your addition to your death benefit would be lower because you received that dividend in cash. And it would get to a point in the policy where, whether you're in the United States or Canada, it would get to the point where the dividend being paid out in cash to you would trigger a taxable event. And so those are the two that come to my mind immediately if I was contemplating taking a dividend in cash.