Which dividend option should a policyowner choose for limited current outlay of funds?

Choosing the reduction of premium payment as a dividend option is ideal for policyowners seeking to minimize their current outlay of funds. This option allows policyowners to use their dividends to offset their premium costs, effectively reducing the amount they need to pay out-of-pocket for their insurance policy. By choosing this option, policyowners can ensure continued coverage without placing additional financial strain on their budgets.

In contrast, the cash payout option would require the policyowner to handle their premiums in full, as they receive their dividends in cash rather than applied to their premiums. Accumulating dividends at interest does not reduce current premiums and instead adds a layer of complexity, as funds would compound over time but would not assist with immediate financial obligations. Purchasing paid-up additions also involves a commitment of funds towards increasing the death benefit or cash value, rather than relieving the current burden of premium payments.

Thus, selecting the reduction of premium payment option aligns with the goal of maintaining insurance coverage while minimizing out-of-pocket expenses.