MR. WATSON: Let's say you paid in a thousand dollars a year for a life insurance policy for ten years, now, what if the insurance company gave you $2,000 back?

INSURANCE BUYER: I'd be stoked!

(Laughter.)

MR. WATSON: How much does the insurance actually cost her? $8,000. Oye. If you paid in a thousand dollars a year, how much is that? $10,000. And I give you $2,000 back, how much does it cost you? $8,000. No matter what you do, you have been given back $2,000. Do you agree?

ALL: Yes.

MR. WATSON: So how much is your cost?

ALL: $8,000.

MR. WATSON: So what's your gain?

ALL: $7,000. And that would be taxed.

MR. WATSON: Finally. Dividends are a what?

ALL: Return of premiums.

MR. WATSON: What's wrong?

WOMAN: I put the $2,000 onto the gain.

MR. WATSON: Can't do that. You've got to subtract your dividends because it's what? Policy dividend. What's the definition? It's a refund. It's change.