What Does Dividend Addition Mean?

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What does Dividend Addition mean? Read on to discover the definition & meaning of the term Dividend Addition - to help you better understand the language used in insurance policies.

Dividend Addition

Dividend Addition

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.

We hope the you have a better understanding of the meaning of Dividend Addition.

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