Accumulation option,

Definition of Accumulation option:

1. Life insurance policy provision which allows policy dividends to accumulate with the insurer for accruing interest. Also called accumulation At interest option.

2. Accumulation options are available to participating permanent life insurance policyholders. The interest earned is taxable to the policy owner annually. The total dividend balance is payable in addition to the face amount of the whole life policy as a death benefit, as well as, being included with the whole life policy guaranteed cash value upon the surrender of the policy.

3. An accumulation option is a policy feature of permanent life insurance that reinvests dividends back into the policy, where it can earn interest. Some types of insurance pay dividends to their policyholders each year when the insurance company performs better than estimated. Accumulation options are one of several options policyholders have for what to do with the dividends they receive. An accumulation option is also known as an "accumulation at interest dividend option," "accumulation at interest option" or "dividends on accumulation.".