What term best describes an insured receiving an annual life insurance dividend check?

The term that best describes an insured receiving an annual life insurance dividend check is the cash option. This option allows policyholders to receive their dividends in cash instead of applying them to their premium payments or utilizing them for other purposes within the policy. By choosing the cash option, the insured can directly benefit from the dividends as a financial return on their policy, providing immediate liquidity that they can use as they wish.

In contrast, premium reduction refers to applying dividends to reduce future premium payments, while paid-up additions involve using dividends to purchase additional coverage, increasing the death benefit without requiring additional premiums. A policy loan is a method where the insured borrows against the cash value of the policy, which is distinct from receiving a dividend check. Each of these alternatives serves different needs and functionality within a life insurance policy, but the cash option specifically highlights the receipt of a dividend check directly.