Life Insurance Policy Provisions, Options, and Riders
What does the one-year term dividend option buy with the declared dividend?
Answer and explanation
Answer: D. The dividend is used as a single premium for one year of term insurance on the insured, renewed each year a dividend is declared, which is why it is sometimes called the fifth dividend option. It buys neither permanent insurance nor a disability benefit.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, one-year term dividend option
More life insurance policy provisions, options, and riders questions
- How does the interest only settlement option work?
- How does the reduction of premium dividend option work?
- How does waiver of cost of insurance differ in effect from waiver of premium on a fixed whole life policy?
- How is a children's term rider ordinarily priced and applied?
- How is the amount of cover under a family term rider usually expressed?
- How is the interest credited under the accumulation at interest dividend option treated for tax?
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