New York State Life Insurance Exam Questions Practice Question
A policyowner may choose to have his/her life insurance policy dividends do all of the following EXCEPT
Correct Answer: B
Rationale: Dividends from a life insurance policy can be utilized in several beneficial ways. Reducing the policy premium (A) lowers future costs, while cash payments (C) provide immediate financial benefit. Purchasing additional insurance (D) enhances coverage through paid-up additions. However, accumulating dividends without interest (B) is not a typical option, as most policies allow dividends to earn interest when left with the insurer. Therefore, option B is incorrect, as it does not align with common practices regarding dividend management in life insurance policies.
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