What is participating and nonparticipating Whole Life insurance?
Frank
Tempe, AZ.
Frank,
Whole life policies can be issued as participating, or nonparticipating.
Participating policies typically cost more but may return annual dividends if the insurer has a good financial year. Dividends are never guaranteed. Nonparticipating whole life insurance offers no dividends. Buyers of whole life insurance like the certainty of fixed premiums with a known death benefit for life. They also appreciate the forced savings component and watching their cash value account build up.
Great Question.