Dividend addition is an option regarding payment of dividends to insureds that is offered by some life insurers, particularly mutual companies.
Dividend addition is an option regarding payment of dividends to insureds that is offered by some life insurers, particularly mutual companies.
There are a number of alternative ways dividends may be paid, such as in cash, as an increase to the policy's cash value, or as a paid-up addition. Under this alternative, the dividend is used to purchase a paid-up single premium increase in the policy's face value, thereby increasing the death benefits.