Question 1 of 20
Walk through this scenario as if you were explaining it to a client or examiner: An owner of a participating whole life policy asks whether the policy’s stated dividend scale should be treated like a guaranteed cash value. What is the best response? Explain the controlling whole life rule, the decisive fact, and why common alternatives would be wrong.
Strong Interview Answer
Participating life policies may pay dividends from divisible surplus, but future dividends are not guaranteed. Guaranteed policy values and illustrated/projected dividends are different concepts. Georgia law permits cash and other policy-provided dividend options for participating policies.
What to Listen For
- Whole Life Policy Structure
- Dividends from Divisible Surplus
- Projected Dividend Definitions
- Dividends vs Guaranteed Values
Caution
Require an explanation of the trigger, timing, and consequence. Do not accept a label-only answer or a rule imported from another state.