Which option allows a policyholder to reduce future premiums using dividends?

The option that allows a policyholder to reduce future premiums using dividends is the choice of paid-up additions. When dividends are paid to a policyholder, they can be used to purchase additional small amounts of paid-up life insurance, which increases the overall coverage without requiring the insured to provide additional premium payments. This option enhances the policy's value and can lead to a reduction in future premium obligations, either by using the dividends to pay premiums directly or by reducing the amount needed to maintain coverage.

Paid-up additions effectively provide a way for policyholders to leverage their dividends to enhance their life insurance policy's benefits without additional costs, which can help in managing future premiums. This feature allows for flexibility and builds cash value within the policy, contributing to its overall financial growth.