Definition of "Interest option"

Del  McDaniel real estate agent

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Del McDanielelite badge icon

Coldwell Banker Residential Brokerage

Use of a life insurance policy dividend by the owner of a participating policy. Here the policy dividend is left with the insurance company to accumulate at a guaranteed minimum interest rate. Also, an interest option is a choice a beneficiary can make by leaving death proceeds with the insurance company to accumulate at interest. Interest earned under either option is subject to federal and state income taxes.

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