Participating or Non Participating Life Insurance?

Policies may be offered as participating or non participating in the investment experience of the insurance company.

Participating policies show guaranteed values and premiums as well as non-guaranteed values. The non-guaranteed values are generated by regularly [usually annually] reviewing the results of investment, mortality and administration costs and crediting a portion [if not all] of that profit to the policyholders as a policy dividend.

It is fair to say that the participating policies illustrate their guaranteed values on a prospective basis and then adjust the values of a policy up on a retrospective basis to reflect their actual experience.