Dividend, Non - Forfeiture and Settlement Options in Life Insurance Plans

Dividend options in life insurance policies:

• Dividend is paid in the form of cash paid to the policy owner, usually on the anniversary date of the policy.
• Instead of paying cash, dividend can be paid in the form of reduction in premium payable during the next year.
• Dividends are added to form a 'corpus' which accumulated interest and can be withdrawn at any time.
• Dividend amount can be used to purchase additional sum - insured or paid - up amounts.

Non -forfeiture options in life insurance policies:

• In the event that the insured discontinues the current policy, then the policy can be surrendered and cash value equal to the surrender  is paid to the insured.
• The surrender value can be used to purchase another policy with a reduced sum- insured.
• The cash value can used to extend the policy as a limited term policy.

Settlement options in life insurance policies

• The policy benefits payable are retained by the insured, who periodically pays the stipulated interest to the beneficiary.
• The benefits can be paid periodically to the beneficiary in fixed periods.
• The benefits can be periodically paid in lump sum as a fixed amount.