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Paid-Up Additions in Insurance Policies

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Questions and Answers

What happens when a dividend is used to buy Paid-Up Additions?

It buys additional paid-up insurance of the same type as the base policy (correct)

The premium rate decreases

The death benefit decreases

The insured's attained age becomes irrelevant

How does the total death benefit change with Paid-Up Additions?

Remains the same regardless of paid-up additions

Increases by the face amount of the policy only

Decreases over time

Equals the face amount of the policy plus the face amounts of the paid-up additions (correct)

How does purchasing Paid-Up Additions affect the policy's total value over time?

Has no effect on the total value

Only enhances the face amount of the policy

Decreases the total value

Can greatly enhance the policy's total value (correct)

What is the main characteristic of the paid-up additions option in life insurance?

It is purchased using dividends. Signup and view all the answers

How does the total death benefit of a policy with paid-up additions differ from a policy without such additions?

It increases by the face amounts of the paid-up additions. Signup and view all the answers

How does purchasing paid-up additions using dividends impact the overall value of a life insurance policy?

It enhances the policy's total value over time. Signup and view all the answers

What determines the premium rate for the paid-up additions option in life insurance?

Insured's attained age at the time of purchase Signup and view all the answers

How does the total death benefit of a policy with paid-up additions differ from a policy without such additions?

It equals the face amount of the policy plus the face amounts of the paid-up additions Signup and view all the answers

How does the cumulative effect of paid-up additions impact a life insurance policy's total value over time?

It can greatly enhance the policy’s total value Signup and view all the answers

Paid-Up Additions in Insurance Policies

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Questions and Answers

What happens when a dividend is used to buy Paid-Up Additions?

How does the total death benefit change with Paid-Up Additions?

How does purchasing Paid-Up Additions affect the policy's total value over time?

What is the main characteristic of the paid-up additions option in life insurance?

How does the total death benefit of a policy with paid-up additions differ from a policy without such additions?

How does purchasing paid-up additions using dividends impact the overall value of a life insurance policy?

What determines the premium rate for the paid-up additions option in life insurance?

How does the total death benefit of a policy with paid-up additions differ from a policy without such additions?

How does the cumulative effect of paid-up additions impact a life insurance policy's total value over time?

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