Policy dividends paid on participating policies reflect the difference between the premiums that are charged and the amount of premium necessary to fund the actual mortality experience of the company.

Question

Quizplus · Accepted Answer

Policy dividends paid on participating policies are determined by the performance of the insurance company, and policyholders receive a share of the company's profits in the form of a dividend. This dividend reflects the difference between the premiums charged and the amount needed to fund the claims and expenses of the company, including the mortality experience of the policyholders. Therefore, the statement is true.

Policy Dividends Paid on Participating Policies Reflect the Difference Between