Which option allows the insurer to accumulate dividends at interest and use them for early policy settlement?

The paid-up option is a provision that allows policyholders to use accumulated dividends to purchase additional paid-up insurance, which ultimately increases the death benefit without requiring additional premium payments. By accumulating dividends at interest, the insurer provides a way for policyholders to enhance their policy's value over time without extra cost. This option is beneficial for those who prefer to leverage their dividends towards policy enhancements rather than taking the cash or leaving the dividends retained with the insurer.

In the context of early policy settlement, the policyholder can access these dividends that have been accumulated at interest, utilizing them towards settling the policy early or taking advantage of other benefits offered by the policy. This approach can provide significant flexibility and financial relief, particularly if the policyholder faces unexpected needs or desires to increase their life insurance coverage without incurring additional out-of-pocket expenses.