Dividend Option

What Does Dividend Option Mean?

In the context of insurance, a dividend option refers to the choices available to the insured for receiving dividends under a participating life insurance policy.

Insuranceopedia Explains Dividend Option

Not all life insurance policies pay dividends, but for those that do, the insured has several dividend options for using them. These options may include receiving cash dividends, applying dividends toward the premium, allowing dividends to accumulate with interest, using dividends to purchase additional coverage, or using dividends to buy term insurance.