Question

An insured has a life insurance policy from a participating company and receives quarterly dividends. He has instructed the company to apply the policy dividends to increase the death benefit. The dividend option that the insured has chosen is called ______.1. one-year term purchase

2. accumulation at interest
3. reduction of premiums
4. paid-up additions

Answer 1

2. accumulation at interest

Step-by-step explanation:

Based on the information provided within the question it seems that the insured has chosen the option known as accumulation at interest. This is an option in a permanent life insurance policy in which all the dividends that are received quarterly are reinvested back into the insurance policy in order to earn interest and increase the death benefit. Which is exactly what the insurer has chosen to do in this scenario.