All statements concerning dividends are true EXCEPT which one?

Dividends in the context of life insurance policies are often associated with mutual insurance companies, where they are paid to policyholders based on the company's performance. The correct answer emphasizes the nature of dividends as not being guaranteed, which is an essential aspect of understanding how they work.

While lower costs, favorable underwriting experience, and positive investment results all contribute to the potential for higher dividends, the amount of dividends a policyholder receives can fluctuate based on the overall performance of the company. This means that dividends are not guaranteed, as they depend on various factors such as claims experience and investment performance.

Therefore, saying that dividend amounts are guaranteed misrepresents the nature of dividends, as they are essentially a return of excess premiums or profits, and can vary from year to year. This distinction is crucial for anyone studying life insurance practices, as it highlights the importance of understanding the risks and uncertainties involved in the financial aspects of life insurance policies.