Paid-Up Additions are additional whole life coverage that a policyholder purchases using the policy's dividends instead of premiums.

• A. Paid-Up Additions
• B. Extra Term
• C. Cash Value
• D. Reduced Paid-Up

Answer: (A)

Paid-Up Additions are dividend-funded extra life insurance within a participating whole life policy. The policy’s dividends are used to purchase these additions, and each addition is fully paid for, so no additional premium is required for that extra coverage. These additions increase both the death benefit and the policy’s cash value, and they participate in future dividends like the base policy. This is different from using dividends for extra term insurance, or simply increasing the cash value on its own, or converting the policy to a reduced paid-up option.