Custom dividend scales

The Situation:

You're illustrating participating insurance and you want to show projected values based on something other than a flat projected dividend scale.

How to illustrate a custom dividend scale

  • In the Assumptions section, from the Primary dividend scale drop down list, select Custom.
  • Depending on how you want to customize the illustration, for Based on, select either Year or Age.
  • The illustration initially shows a single assumption but you can Add a change up to four times (for a total of five assumption layers). Each assumption layer can include any of the five available options which range from the current dividend scale down to current less 2%.
  • Select the To year or age for each layer. The From year is automatically adjusted to be the year after the previous layer.

The following example shows a scenario that starts with the current dividend scale, reduces over time to Current less 1%, and then comes back up to the Current scale at year 21.

screenshot image

Here are some things to be aware of when you customize the dividend scale.

The illustration always includes 3 scenarios:

The illustration always includes calculations based on 3 different dividend scales.

If you do not customize the dividend scale, the system calculates values based on:

  • the Current scale,
  • the Current scale less 1%, and
  • the Current scale less 2%.

If you customize the dividend scale, the custom scale replaces the Current less 1% scenario. So in this situation the system calculates values based on:

  • the Current scale,
  • your Custom scale, and
  • the Current scale less 2%.

The significance of the Primary dividend scale

Even though the system always calculates based on three different scenarios, the Primary dividend scale is used for the purpose of Solves and Strategies. When you add a Custom scale, it is always considered the Primary scale. So when you use a Custom scale, any Withdrawal or Loan solves will solve based on the values using your Custom scale. And the values from your Custom scale are the values that are used in any Sales Strategy you generate for the illustration.