Direct Recognition vs Non-Direct Recognition, which one is better?
Which one do you want? When an insurance company issues a contract they agree to assume certain risks on behalf of the policyholder in exchange for a premium.
One of the risks they have to assume is the risk associated with providing loans to policyholders who want to leverage their death benefit to take a policy loan.
1. They can force ALL policyholders to assume the risk associated when someone takes a policy loan against their policy. (this is called non-direct recognition)
2. They can give everyone who doesn’t have an outstanding policy loan against their policy a greater share of dividends declared. (This is called direct recognition)
To read about life insurance go here: https://www.life-benefits.com/life-insurance/
To listen to a Podcast on Direct vs Non-Direct Recognition Life Insurance go here: https://www.life-benefits.com/podcasts/life-insurance-lingo-made-easy/
To watch a video on How Life Insurance Works go here: https://www.youtube.com/watch?v=q7QmPQvRIgE
Contact info: https://www.life-benefits.com/contact/
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