What statement regarding dividends must be included in a whole life policy that offers a choice of dividend options?

In the context of a whole life policy that provides options for dividend distribution, the statement that dividends are not guaranteed is essential. Whole life insurance is designed to provide a death benefit and a cash value accumulation, where dividends may be declared based on the insurer's financial performance, including mortality experience, investment returns, and expense ratios.

Dividends in whole life policies are not promises; rather, they are a distribution of surplus profits, and their declaration depends on subjective factors related to the insurer's success. This understanding is crucial for policyholders, as it sets realistic expectations regarding the financial benefits they might receive.

Emphasizing that dividends are not guaranteed helps ensure transparency and clarity in the policy terms, allowing insured individuals to make informed decisions regarding their insurance products. This disclosure is integral to consumer protection, ensuring that policyholders are aware of the potential variability in dividends and can plan accordingly.