Illustrated and Realized Policyowner Dividends: An Empirical Analysis

Two yardsticks are present to measure reliability of dividend illustrations as determined by comparing 20-year streams of dividend illustrations and dividend histories. One of these measures shows that, on the average, the present value of the stream of histories was approximately ten percent greater than the present value of the stream of illustrations. The other measure, useful for determining the accuracy of dividend illustrations, shows that, on the average, the discounted value of the 20 policy years of absolute differences between histories and illustrations equaled approximately 24 percent of the discounted value of the 20 policy years of illustrations.