Quality Non Par Whole Life ?

[Robert Barney]

Dividends are NOT guaranteed.

Past dividend performance is no guarantee of future dividend performance.

 

[DHK]

Dividends are NOT guaranteed.

Past dividend performance is no guarantee of future dividend performance.

True... and false.

This is a disclosure statement required because dividends don't HAVE to be declared each year and the scale of these dividends can vary based on the underlying factors:
1. General investment account performance
2. Mortality experience (death claims)
3. New sales and premium - which is based on current underwriting standards.

But as long as the company follows the "recipe", you'll have dividends.
- The GIA can certainly vary depending on overall economy, but these are somewhat stable assets - which is why they are chosen.
- Unless there is an unusually high amount of death claims - which is generally based on underwriting, not an act of war that causes a large issue on the company's balance sheet.
- New sales need to have consistent underwriting standards. Relax the standards, and you introduce a higher mortality risk that adversely affects dividends.

Any major changes to the above will certainly impact dividends.

I obviously won't say that dividends or the dividend scale is guaranteed, but the trend of a mutual company continuing to paying dividends... is highly likely.

 

[WinoBlues]

If we are going to talk Whole Life and dividend non guarantees and include Fraternals. We have to include Maintenance of Reserves

 

[BNTRS]

You're going to ask a life insurer to guarantee a return on a whole life product remotely close to what we'd anticipate from non-guaranteed results through dividends? That's a big ask.