Life Policy ProvisionsQuestion 165 of 315
Which dividend option uses the dividend to purchase a small amount of additional permanent life insurance with its own cash value, increasing both the death benefit and the cash value?
a.Paid-up additions
b.Reduce premium
c.Cash
d.Accumulate at interest
Explanation
The paid-up additions (PUA) dividend option uses each dividend as a single premium to buy a small block of additional, fully paid-up permanent insurance. Each PUA carries its own death benefit and cash value, increasing the policy's total values over time.
Law Reference: Cal. Ins. Code §10172Practice all 315 questions free — no signup required.
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