If dividend option choices are offered on a whole life insurance policy, what must the policy include?

In the context of whole life insurance policies, it is important to understand the nature of dividends associated with such policies. Whole life insurance policies typically offer policyholders options for how to handle dividends, which are not guaranteed. Therefore, it is essential for the policy to include a clause that clearly states that dividends are not guaranteed. This clause ensures transparency and sets realistic expectations for policyholders regarding the potential for receiving dividends from their policies.

While the other options may seem relevant, they do not accurately reflect the specific requirement for whole life insurance policies regarding dividends. For instance, stating dividends are guaranteed would be misleading since they can fluctuate based on the insurer's performance. Similarly, a breakdown of expected dividends is not mandated because actual dividends may vary, and taxation of dividends involves different considerations that are not specifically required to be addressed in the policy itself. Thus, the inclusion of a clause stating that dividends are not guaranteed is crucial for compliance and consumer protection in the life insurance industry.