Which of the following statements about dividends is NOT true?

The statement about dividends that is not true is that dividend amounts are guaranteed in the policy. This is correct because dividends are not guaranteed for policyholders; they are typically based on the performance of the insurance company. Dividends depend on various factors such as the company’s investment performance, mortality rates, and administrative expenses.

In contrast, the other statements reflect how dividends are usually determined. Favorable investment results can indeed lead to higher dividends, as an insurance company that performs well financially is likely to distribute some of that profit back to policyholders. Lower costs incurred by the insurance company can also result in higher dividends, as these savings can contribute to the surplus that is available for distribution. Additionally, favorable underwriting experience—meaning fewer claims than expected—contributes to the insurer's profitability, which can subsequently result in dividends for policyholders.