Dividends

Determination of dividends

Dividends are determined annually according to the financial performance of each participating account’s dividend scale. The scale depends on several factors, such as the return on investment which includes the interest rate, mortality rate and taxes and expenses paid by the insurer.The dividends are not guaranteed and may differ from what is shown in the illustration reports.

The illustration reports demonstrate the changes to the policy values of different scenarios. The software can illustrate 3 scenarios: at the current rate, at the reduced rate (current minus 1%, which appears by default) and at the alternate selected rate. Alternate scenarios can be generated at the current rate -2%, -1.5%, -0.5% and +0.5%. The Summary of Scenarios selected provides an at-a-glance summary of projected values.

Dividend options

The policyowner must choose one of the options available for the dividends received at each policy anniversary. This choice significantly impacts how the policy values will grow.

Options available by product

ProductDividend options available
Estate Enhancer

Accelerated Growth
  • Paid-up additions (PUAs)
  • Enhanced insurance (T1 + PUAs)
  • Annual premium reduction
  • Cash payment
  • Dividends on deposit
5 Pay PAR
  • Enhanced insurance (T1 + PUAs) is the only option offered at the policy issue.
    Over 10 years, the policyowner may choose a different option if the policy remains tax-exempt, except for the annual premium reduction