Which of the following is NOT a dividend option available to policyholders?

To determine why the interest only option is not a dividend option available to policyholders, it's important to understand what dividend options typically entail. In life insurance and certain health insurance policies, dividends are a return of surplus earnings to policyholders, and they usually come with specific options for how that money can be utilized.

The common options available include accumulating dividends with interest, which allows the policyholder to let their dividends earn interest over time. Policyholders can also choose to reduce their next premium payment by applying dividends directly to that cost. Furthermore, one-year term options involve using dividends to purchase additional temporary coverage for one year.

On the other hand, the interest only option, while related to dividends, does not represent a way to utilize the dividend itself. Instead, it implies that a policyholder would choose to take the dividends in cash but only receive the interest accrued on that amount. This option may not enhance the policy or provide an actual dividend benefit, distinguishing it from the typical options that allow for applying those dividends in a meaningful way to the policy or premiums. Thus, it is not considered a standard dividend option in the same context as the others.