Tammy owns a participating whole life insurance policy for which she has elected the paid-up additions option. If the insurer declares a dividend of $500 in the current year, how will this amount be used with this dividend option?
A) The insurer adds a paid-up unit of whole life insurance with a cash value that is equal to $500.
B) The insurer adds a paid-up unit of whole life insurance with a $500 face amount to Tammy's base policy.
C) The insurer adds $500 to the face amount of Tammy's base policy.
D) The insured uses the $500 as if it were a single premium to purchase a unit of paid-up whole life insurance based on Tammy's attained age."
Ans: D) The insured uses the $500 as if it were a single premium to purchase a unit of paid-up whole life insurance based on Tammy's attained age."
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