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A life insurance policy is "participating" if it pays dividends, which can be considered a return of premium (or profit, depending on semantics).
Typically, dividends are not guaranteed and are payable yearly. They can purchase more insurance or accumulate at interest on whole life plans. They can also be paid in cash and must be approved.
Many older policies have large amounts of accumulated dividends.
A Participating Policy generally refers to whole life insurance policies that distribute dividends at the approval of the board of directors. Dividends are a return of unused premium. And just to cover the new use of the word with participating indexed insurance policies…translation, i.e. participating policy loans.
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Typically, dividends are not guaranteed and are payable yearly. They can purchase more insurance or accumulate at interest on whole life plans. They can also be paid in cash and must be approved.
Many older policies have large amounts of accumulated dividends.
A Participating Policy generally refers to whole life insurance policies that distribute dividends at the approval of the board of directors. Dividends are a return of unused premium. And just to cover the new use of the word with participating indexed insurance policies…translation, i.e. participating policy loans.