New Jersey Life Insurance Exam Practice Question
Which of the following dividend options will increase the death benefit?
Correct Answer: C
Rationale: C: Paid-Up Additions increase the death benefit because they are additional life insurance purchased using dividends, thus enhancing the policy's overall value.
A: Guaranteed Insurability allows for future increases in coverage without medical underwriting, but it does not directly increase the current death benefit.
B: Reduction of Premium involves using dividends to lower premium payments, which does not affect the death benefit amount.
D: Spouse Term Rider provides coverage for a spouse but does not increase the primary insured's death benefit; it is a separate policy feature.
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