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.
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.