Advantages of Selecting the Paid-Up Additions Dividend Option in a Life

question 37

Multiple Choice

Advantages of selecting the paid-up additions dividend option in a life insurance policy include which of the following?
I.Evidence of insurability is not required to purchase additional insurance.
II.The additions are purchased at net rates without loading for expenses.

• A)I only
• B)II only
• C)both I and II
• D)neither I nor II

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Definitions:

Significant Influence

The capacity of an investor to participate in the financial and operating policy decisions of an investee but not control those policies.

Equity Method

An accounting technique used by firms to assess the profits earned from their investments in other companies by reporting these profits as income.

Fair Value Method

An accounting approach that assesses assets and liabilities at their current market value rather than historical cost.

Equity Method

An accounting technique used by firms to assess the profits earned through their investments in other companies, recognizing income in proportion to ownership.