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

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