Question

question 2 of 60 which dividend option is applied to premium payments so the policy is paid off sooner than originally planned? a. paid - up insurance option b. reduction of premium c. acceleration of endowment d. paid - up addition

Explanation:

The reduction - of - premium dividend option uses dividends to reduce the amount of future premium payments. This can lead to the policy being paid off sooner than originally planned as less out - of - pocket money is needed for premiums over time. The paid - up insurance option creates a smaller paid - up policy, the acceleration of endowment is about getting the endowment amount earlier, and paid - up addition adds to the death benefit and cash value but not directly related to paying off the policy sooner by reducing premiums.

Answer:

B. Reduction of premium