Life Insurance Policy Provisions, Options, and Riders
Why does the one-year term dividend option produce more death benefit per dividend dollar than paid-up additions?
Answer and explanation
Answer: A. A year of pure protection is far cheaper than a paid-up permanent addition, so the same dividend buys a larger amount, but it builds no cash value and must be bought again each year. Attained age still governs the cost, and no special interest or expense treatment applies.Source: PSI — New York DFS Insurance Candidate Information Bulletin — Outline, one-year term dividend option
More life insurance policy provisions, options, and riders questions
- What is the role of a tertiary beneficiary in the succession of beneficiaries?
- What may an insurer promise about the dividends on a participating policy?
- What need does a children's term rider chiefly meet?
- What notice does section 3230 require in the application for a policy providing accelerated death benefits?
- What problem does the entire contract provision address?
- What problem is the common disaster clause written to solve?
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