Accumulation option, Financial Management

It is a policy feature of permanent life insurance that permits policyholders to left any dividends obtained with the insurer, where the dividends can gain interest. Accumulation options are the variety of options holders of participating life insurance policies can create with the dividends they get. Some types of insurance give dividends to their policyholders every year when the insurance company does better than expected. It is also known as an "accumulation option," "dividends on accumulation" or "accumulation at interest option".

Common options offered to participating permanent life insurance policyholders are to use their dividends to buy more insurance, or to pay a part of their existing premiums. They can also choose to receive their dividends instantly as cash, or to leave them on deposit with the insurance company to gain interest.

Posted Date: 7/27/2012 8:03:44 AM | Location : United States







Related Discussions:- Accumulation option, Assignment Help, Ask Question on Accumulation option, Get Answer, Expert's Help, Accumulation option Discussions

Write discussion on Accumulation option
Your posts are moderated
Related Questions
You've just won a huge $100 million lottery.  You've decided to invest your winnings in the following way:  $30 million in real estate,  $30 million in  corporate bonds and $40 mil

What is Rationale and behind profitability maximisation Rationale & behind profitability maximisation, as a guide to financial decision making, is simple. Profit is a test of e

XYZ Energy Solutions plc (XYZ) has spent €12m designing and developing a new generation of domestic air source heat pumps. These new domestic heat pumps can easily be fitted to exi

Explain why accounting profits and cash flows are not the same thing. Stock worth depends on future cash flows, their riskiness and their timing.  Profit calculations don't con

QUESTION (a) (i) Describe briefly two potential E-Banking risks that may have an adverse impact on banks. (ii) Outline some measures to control these two risks. (b) Outli

What is triangular arbitrage?  What is a condition that will give increase to a triangular arbitrage opportunity? Answer:  Triangular arbitrage is the method of trading out of th

Explain how exchange rate fluctuations influence the return from a foreign market measured in dollar terms. Discuss the empirical proof on the effect of exchange rate doubt on the

What is capital rationing?  Should a firm practice capital rationing?  Why? The term Capital rationing is the practice of setting dollar limits on what will be invested in new ca

Q. Advantage of Profitability Index method? Advantage of PI method:- (i) Similar to the other DCF techniques the PI method as well takes into account the time value of money

Given the following information, find the Weighted Average Cost of Capital (WACC).  Assume the corporate tax rate is 35%, and give an answer based on market values of debt and equi