Definition - What does Dividend Illustration mean?
A dividend illustration, in the context of insurance, refers to the year-by-year dividends that an individual who decides to purchase the policy can expect to receive based on a set of predetermined factors.
Insuranceopedia explains Dividend Illustration
A dividend illustration helps potential clients see the benefits of an insurance policy in terms of dividend returns. It shows the dividends that will be paid to the insured as long as there are no future changes to the factors the insurance company considered when it calculated the dividends. An actuary is tasked with the responsibility of making sure that the dividend illustration reflects the true financial state of the company.