Aflac Has Raised Its Dividend for 43 Straight Years. Here's the Catch Income Investors Need to Watch.
Aflac increased its first-quarter dividend 5.2%, but investors need to watch more than the dividend with this unique insurance company.
Overview
Aflac (NYSE: AFL) is an insurance company, but it sells what is known as supplemental insurance. These policies are meant to be bought alongside other insurance, paying out only in the event of very specific outcomes, like a cancer diagnosis. However, that isn't the biggest issue you need to monitor when you look at Aflac.
Aflac sells its insurance products directly to consumers. A typical policy example is for cancer coverage. A customer will pay Aflac premiums and, if a cancer diagnosis is made, Aflac will pay a set dollar amount to help cover the customer's out-of-pocket expenses. Still, like all insurers, Aflac makes money if it collects more in premiums than it pays out in claims.
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Originally published at www.fool.com.