Dividend option that endows the policy earlier?

• A. Cash
• B. Premium reductions
• C. Endow the policy earlier
• D. Paid up addition

Answer: (C)

Dividends from a participating policy can be applied in several ways, and one of the ways is to endow the policy earlier. Using this endowment option accelerates the policy’s maturity: if the insured is alive at the endowment date, the policy pays out the face amount and ends. If death occurs before that date, the usual death benefit is paid. This option specifically creates an earlier endowment of the policy, unlike cash payments, premium reductions, or paid-up additions, which either provide cash now, reduce future premiums, or increase the death benefit and cash value, respectively. So the dividend option that endows the policy earlier is the endowment option.