A 'participating' whole life policy is one that:
Explanation
A participating policy is eligible to receive dividends, which represent a return of a portion of the premium when the insurer's experience is favorable; such policies are traditionally issued by mutual insurers. Non-participating policies (often issued by stock insurers) do not pay dividends. There is no guaranteed high fixed return, since dividends are never guaranteed. And like all whole life, a participating policy does build cash value. Dividends are the defining feature of a participating policy.
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Related questions on this topic
- Annual renewable term lets the policyowner continue coverage each year without new evidence of insurability, but:
- Term insurance costs less than whole life for the same face amount primarily because term insurance:
- In a traditional whole life policy, the cash value:
- Compared with traditional whole life, a distinguishing feature of universal life is that the policyowner can:
- An endowment policy pays its face amount:
- The three primary factors an insurer uses to calculate a life insurance premium are:
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