Barbara E. Seaman - Page 4




                                        - 4 -                                         
               share of the divisible surplus of the participating                    
               business of the Company as may be apportioned thereto                  
               by the Company.                                                        
               Options.  At the option of the Owner each dividend may                 
               be                                                                     
                    (a) paid in cash, or                                              
                    (b) applied in reduction of any premium then due,                 
               or                                                                     
                    (c) applied to provide a participating paid-up                    
               addition to the Amount of Insurance under this Policy                  
               (hereinafter called life addition), or                                 
                    (d) left to accumulate to the credit of this                      
               Policy with interest, as determined by the Company, at                 
               not less than 2½% per annum, compounded annually (here-                
               inafter called dividend accumulation), or                              
                    (e) applied to purchase a non-participating one                   
               year term insurance addition (hereinafter called term                  
               addition), payable in event that the Insured’s death                   
               occurs within one year from the date on which such                     
               dividend becomes due, but terminating without grace or                 
               notice at the end of one year from the due date of such                
               dividend.                                                              
               Any option may be elected in the application for this                  
               Policy or by written request to the Company at its Home                
               Office and such election will be effective until re-                   
               voked; * * *.  Election of any option or revocation                    
               thereof shall apply only to dividends becoming due                     
               thereafter, except that, at the option of the Owner,                   
               election of any option may be made retroactive to a                    
               dividend due within thirty-one days prior thereto.  If                 
               no dividend option is elected prior to the date a                      
               dividend becomes due or within thirty-one days thereaf-                
               ter, such dividend will be applied by the Company under                
               Option (d) * * *.                                                      
               At any time * * * dividend accumulations * * * may be                  
               withdrawn.  * * *                                                      
          In the application for the USAA policy, Mr. Seaman elected to               
          have dividends accumulate with interest.                                    
               On July 24, 1986, petitioner and Mr. Seaman divorced pursu-            
          ant to an agreed final decree of divorce (petitioner’s divorce              







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