[D067]

dividend option

In some life insurance policies, insureds may select from specified options for the method best suited to that insured, with respect to the handling of the dividends earned by the policy. Some of the most common options available are reduced premiums on continuing coverage, payment to the policyholder in cash, the ability to purchase paid-up additions of whole life insurance, to leave the dividends on deposit to accumulate at compound interest, or to apply the dividends to the purchase of extended term insurance.