What must be communicated regarding dividends?

Dividends in the context of life insurance policies are considered a share of the insurer's profits and are typically not guaranteed. This means that policyholders should be made aware that while dividends may be declared based on the insurer's performance, there is no certainty regarding their payment each year. Factors such as the insurer's investment returns, mortality rates, and operating expenses affect the distribution of dividends, which is why it is important for policyholders to understand that they may receive dividends in some years, while in others, they may not receive anything at all.

Understanding that dividends are not guaranteed helps consumers set realistic expectations and prepares them for potential fluctuations in their policy benefits. This communication is crucial for making informed financial decisions when selecting life insurance products.