Life · Chapter 5 · Dividends

Dividend Options (CRAPPO)

Definition

Cash · Reduction of premium · Accumulate at interest · Paid-up additions · Paid-up policy · One-year term. Only participating policies pay dividends.

Exam tip

Accumulate at interest: the dividend stays tax-exempt but the interest earned is taxable each year.

Easy to confuse with

These are what this term gets tested against — if you can't tell them apart cold, drill the contrast.