Dividend Option

Definition - What does Dividend Option mean?

A dividend option, in the context of insurance, refers to the choices an insured has to decide how they wish to receive the dividends under a participating life insurance policy.

Insuranceopedia explains Dividend Option

Not all life insurance policies pay out dividends. However, for those that do, the insured is given different dividend options to decide how to use them. An insured may have any of the following method of collections: cash dividends; dividends to apply against the premium; dividends to accumulate interest; dividends to pay for additional coverage; or dividends to buy term insurance.

This definition was written in the context of insurance
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