Dividend Option
Definition of "Dividend option"
Methods of handling policyholder dividends. In a participating life insurance policy, dividends are paid to the policy owner according to which of the following options is selected:
- applied to reduce premiums;
- paid in cash;
- purchase increments of paid-up life insurance;
- left on deposit with the insurance company to accumulate at interest;
- purchase extended term life insurance for one year in the amount a dividend can buy (Fifth Dividend Option). Some health and property insurance policies have dividend options.
Popular Insurance Terms
Type of surety bond that is either a fiduciary or a court bond. Fiduciary Bond guarantees that individuals in a position of trust will safeguard assets belonging to others placed under ...
Individual retirement account established under the tax reform act of 1986, for a spouse who has unearned income. The maximum annual combined contribution into the worker's and spouse's IRA ...
Payment of insurance proceeds for a claim resulting from a loss to insured mortgaged property. ...
INSURANCE tax that exhibits direct impact on the book income preference. Beginning with the year 1990, the book income preference became equal to 75% of the excess of current adjusted ...
Policy provision that provides coverage for continuing payroll expense of all employees of an insured business (except for officers and executives) for the first specified number of days of ...
Loan under which the owner of a home receives the equity in the form of a series of monthly income payments for life. Upon the owner's death, the lender institution (usually a bank) gains ...
Defined contribution pension plan in which employer contributions are set under a collective bargaining agreement. It usually covers the employees of a number of firms and is administered ...
Retirement plan offered by public employers and tax-exempt organizations. Under Section 403(b) of the Internal Revenue Code, certain tax-exempt organizations such as public school systems ...
Type of guaranteed investments contract in which the interest credited is adjusted on a periodic basis to reflect the investment earnings of the underlying assets of the contract. ...
Have a question or comment?
We're here to help.