How is the dividend scale actually decided?
A board of directors declares it, once a year, on the advice of the appointed actuary. Three drivers feed the advice: how the participating account's assets performed, how mortality claims compared with what pricing assumed, and what the block cost to run. A declaration is a distribution of a completed year's surplus among the contracts that produced it, decided after the fact rather than promised in advance.
What kind of answer this is
- Claim type: Contract fact
- Jurisdiction: Canada wide
The declaration mechanism is common to Canadian participating insurers. The weighting of the three drivers in any given year is the insurer's own and is not published contract by contract.
How it works
Premiums from participating contracts are pooled and managed apart from the rest of the company. Each year the actuary measures what that pool earned, paid in claims and cost to run, against the assumptions used at pricing. Where reality was kinder, a surplus exists and the board decides what to release.
The cost or the catch
Two things follow. The figure describes a year already finished, so it cannot be promised ahead and no contract pretends otherwise. And a board with a poor year behind it may declare less, or nothing, which is why the same board can print rising values without owing anything beyond the guaranteed row.
Where this answer may not apply
- The account belongs to one insurer, so nothing about one company's declaration says anything about another's.
- How much of the declared amount reaches your own contract depends on your design, your issue year and the option in force on it.
- A contract without participating features receives none of this and the whole question passes it by.
- Nothing here is a statement that any amount will be declared. A board may declare nothing.
What to verify in your own contract
- Which dividend option is recorded on your contract today, and when it was last changed.
- The amount credited to your own contract in each of the last five years, from your annual statements.
- The insurer's published scale announcement for the current year and the one before it.
- The insurer's financial strength ratings and the Assuris limits that would apply to your contract.
Continue to the full explanation
Continue to the next question in this stage.
Sources
- Insurer annual reports and published participating account disclosure, verified 2026-08-30
- Office of the Superintendent of Financial Institutions, list of federally regulated insurers, verified 2026-08-30
Accountability and disclosure
- Written by
- José Salloum
- Professional capacity
- Financial security advisor, Canadian Wealth Creation Centre Inc., operating as IBC Financial
- Reviewed by
- Insurance and contract education tier, reviewed under a licensed insurance professional's own authority
- Jurisdiction
- Canada wide
- Last reviewed
- 2026-08-30
- Version
- 1.0
- Compensation disclosure
- Canadian Wealth Creation Centre Inc., operating as IBC Financial, may receive insurer paid compensation if a policy is purchased. It takes the form of first year compensation followed by renewal compensation, and the amount varies by insurer, product, age, premium, contract design, riders and the arrangement with the managing general agency. No single figure would describe every contract honestly, and none is published here.
- Report a correction
- Info@ibcfinancial.com. Write without a policy number, medical information or account details.
Last reviewed 2026-08-30. By Jose Salloum, Financial Security Advisor.