When the owner of a participating whole life policy uses the dividend to provide more life insurance coverage, which of the following dividend options is being used?

A. Reduce the premium
B. Paid-up additions
C. Reduced paid-up
D. Fixed amount



Answer :

Final answer:

The paid-up additions dividend option allows owners of participating whole life policies to acquire more life insurance coverage using dividends.


Explanation:

When an owner of a participating whole life policy uses the dividend to acquire more life insurance coverage, they are utilizing the paid-up additions dividend option. This option allows the owner to purchase additional fully paid-up life insurance coverage with the dividend received, increasing the overall death benefit.


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