Question

All of the following are dividend options EXCEPT

a)Fixed-period installments.
b)Accumulated at interest
c)Reduction of premium.
d)Paid-up additions.

Answer 1

Dividend options include fixed-period installments, accumulated at interest, and reduction of premium. Paid-up additions are not a dividend option, but refer to additional shares or units of a life insurance policy purchased with dividend payments.

Step-by-step explanation:

Dividend options are ways in which a company can distribute its profits to its shareholders. The options listed are:

1. Fixed-period installments: This option allows shareholders to receive regular, predetermined payments over a fixed period of time.
2. Accumulated at interest: In this option, the dividend payments are held by the company and accumulate interest over time before being paid out to shareholders.
3. Reduction of premium: This option allows shareholders to use their dividend payments to reduce the premiums they pay for their insurance policies.

Paid-up additions is not a dividend option. Instead, it refers to additional shares or units of a life insurance policy that are purchased using the dividend payments received by policyholders.