Accident Sickness Insurance

Reducing subsequent premiums - the policy owner can choose to have the insurer automatically (and at no charge) apply any dividends to reduce future premiums. As dividends increase, the policy owner’s required premium payments decrease. If the insurer’s investments perform very well, at some point the premiums can equal and even exceed the amount of the premiums. Therefore, if the dividends were high enough to offset future premiums totally and, with any remaining excess dividends, another option would be selected.

Leaving the dividends with the insurer at interest - a policy owner can choose to leave the dividend to be retained by the insurer, accumulating and earning interest. The interest rate payable on the policy owner’s accumulated account is guaranteed to equal or exceed a specified minimum. Cash can be withdrawn from the dividend accumulation account at any time. When the insured dies or the policy is surrendered, the policy pays the face value or the net cash surrender value plus the value of this account. Interest earned on accumulated and retainer dividends is fully taxable to the policy owner as soon as the policy owner has the right to withdraw it, even if the policy owner elects not to withdraw it. If the policy owner can only withdraw the interest on a specific date, the interest is taxable in the policy owner’s taxable year with which the date falls.

Buying paid up additional insurance - this option allows policy owner to use dividends to purchase small amounts completely paid-up (i.e. single premium) additional insurance coverage of the same type as the basic policy. The insurer will add the additional amount of coverage that the dividend can purchase at the insured’s attained age. This is purchased at net rates with no commission paid. There is no extra premium. This requires no further evidence of insurability. These paid up additions can generate dividends of their own.

Buying additional one year term insurance - this option allow using the dividends to purchase as much additional one year term life insurance coverage as possible as allowed based on the insured’s age.