Which option is a choice for a participating policy to maximize death benefit?

A participating policy allows policyholders to receive dividends, which can be used in several ways to enhance their insurance coverage. One effective choice to maximize the death benefit in a participating policy is the addition of paid-up additions.

Paid-up additions are a type of small whole life insurance policy that can be purchased using dividends earned on the base policy. When you choose paid-up additions, the additional insurance increases both the death benefit and the cash value of the policy without requiring additional premium payments. This effectively enhances the overall value and benefits provided by the policy, allowing for increased coverage for the beneficiaries.

By opting for paid-up additions, policyholders can leverage the dividends they receive from their participating policy to create a larger death benefit without the need for increased out-of-pocket contributions, making it a strategic choice for maximizing benefits. The result is a more substantial payout upon the insured's death, which can provide better financial support for dependents or beneficiaries.

Each of the other options has its purposes but does not specifically focus on enhancing the death benefit as directly as paid-up additions do. For instance, accelerated death benefits allow for early access to benefits in case of terminal illness but do not enhance the total policy value for long-term beneficiaries. Similarly, a term rider provides additional coverage