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SOFE AFE Exam - Topic 1 Question 119 Discussion

When dividends are left to accumulate at interest, the insurer typically sends a notice to each policyholder showing the amount accumulated at the end of the policy year. The notice also shows the dividend credited and interest earned for that policy year. The dividend left at interest may later be received by or credited to the policyholder in several ways. Which of the following is/are out of those ways?
A) As a cash withdrawal. and B) As premium applied to the purchase by the policyholder of paid-up insurance. and D) As premium to pay up or mature the policy.
C) As marketable securities

SOFE AFE Exam - Topic 1 Question 119 Discussion

Actual exam question for SOFE's AFE exam
Question #: 119
Topic #: 1
[All AFE Questions]

When dividends are left to accumulate at interest, the insurer typically sends a notice to each policyholder showing the amount accumulated at the end of the policy year. The notice also shows the dividend credited and interest earned for that policy year. The dividend left at interest may later be received by or credited to the policyholder in several ways. Which of the following is/are out of those ways?

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Suggested Answer: A, B, D

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Malinda
4 days ago
I practiced a similar question where dividends were used for paid-up insurance, so I feel confident about that option.
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Arletta
9 days ago
I think cash withdrawals and applying dividends to premiums are common methods, but I can't recall if they allow for marketable securities.
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Celestine
14 days ago
I remember studying about how dividends can be used, but I'm not sure if marketable securities are a valid option.
upvoted 0 times
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