Which of the following is true about the dividends from life insurance?

Dividends from life insurance are typically not guaranteed for every policy; instead, they depend on the insurer's performance. While some policies, especially with mutual companies, may have a history of paying dividends, it's important to understand that they are not guaranteed.

The assertion that dividends can reduce future premiums is correct. Policyholders can use their dividends in several ways, one of which is to apply them toward the next premium payment. This allows policyholders to manage their out-of-pocket costs and can be a valuable financial tool.

Dividends are usually not considered taxable income for the policyholder. Instead, they are viewed as a return of the premiums paid and are thus generally not subject to immediate taxation.

Lastly, while dividends can be taken as cash, they are flexible in their use. Policyholders may also choose to use them to pay premiums, purchase additional insurance, or leave them on deposit to earn interest. This flexibility means that stating they can only be taken as cash is incorrect.

By recognizing that dividends can effectively reduce future premiums, policyholders can make informed decisions on how to manage their life insurance policies to maximize benefits.