Question $1$:Richard, age $35,$ owns an ordinary life insurance policy in the amount of $$250,000.$ The policy is a participating policy that pays dividends. Richard has a number of financial goals and objectives. For each of the following situations, identify a dividend option that could be used to meet Richards goals. Treat each situation separately.$($a$)$ Richard would like to have a paid$-$up policy at the time of retirement.$($b$)$ Richard has substantial earned income that places him in a high marginal income$-$tax bracket. He wants the insurer to retain the dividends, but he does not want to pay income tax on the investment earnings.

Choose from these options:

$1.$ Take the cash

$2.$ Reduce the next premium coming due

$3.$ Let the dividends accumulate at interest and withdraw later

$4.$ Apply towards the purchase of paid up whole life insurance under paid up addition option

$5.$ Apply toward the purchase of term insurance

$6.$ Convert to a paid up contact

$7.$ Mature a policy as an endowment