Which dividend option allows an insurer to invest the policyowner's money and add interest earnings as dividends accrue?

The correct answer is the Accumulation at Interest Option because this option enables the insurer to keep the dividends as a part of an interest-bearing account. Under this arrangement, policyowners can earn interest on their dividends while leaving them with the insurer. The accumulated dividends can grow over time through the interest earned, providing a potential benefit to the policyowner.

This option is particularly beneficial for policyholders who prefer to let their dividends grow rather than receive them as cash or utilize them for immediate policy benefits. When dividends are accumulated at interest, they remain in the insurance company, which invests those funds and pays interest on them, giving the policyowner a chance to increase their overall policy value.

In contrast, the Paid-up Additions Option allows dividends to purchase additional paid-up insurance, which does not involve the investment of dividends in an interest-generating account. The Cash Payment Option simply pays out the dividends as cash to the policyowner, meaning there is no opportunity for interest accumulation. The Term Insurance Option allows dividends to be used to buy one-year term insurance, rather than accumulating or earning interest.