Life Insurance - Dividends Options

Question 1

Cash

Answer 1

Clients receive the money and can use it or invest it as they wish

Question 2

Accumulate at Interest

Answer 2

Company invests the dividends and they are tax free up to the client’s basis in the policy. Interest paid on the dividends are taxable

Question 3

Reduce Premiums

Answer 3

Decreases the out-of-pocket expense for premiums

Question 4

Paid-up Additions

Answer 4

Purchases additional insurance each year for insured regardless of health or occupation

Question 5

One-year Term

Answer 5

Adds term insurance each year to the policy face amount equal to cash value of the policy