Participating Life Insurance
There are various types of whole life insurance policies to choose from; among them is non-participating and participating life insurance. With participating life insurance, you will receive profits of the shares in the company. This option is more like an investment; the better the company is doing financially, the more your insurance policy’s cash value will increase.
Benefits of a Participating Life Insurance Policy
You can check with your insurance agent or broker about the benefits of a participating life insurance policy. Investing your premiums in a life insurance company may be wise, especially since the Actuaries (who determines the risk levels of people applying for a policy) in the company are very skilled at what they do and make accurate assumptions with their estimates.
With the non-participating life insurance option, it is not flexible at all. No changes can be made after the policy has been issued. Everything is determined at the beginning – the cash value for the insured’s death, the premium rate and the surrender value. After all papers have been signed and the policy is in effect, the insurance plan is made permanent.
Participating Life Insurance Application Process
The Actuaries in the insurance company will go over your application to determine what level of risk you are to the company. If they somehow underestimate their findings, the insurance company could end up losing money to pay for the difference. If the estimates given by the Actuaries are higher than expected, the insurance company will make profits, which will then be shared with you – if you have a participating life insurance plan.
If you are looking to make an investment in your life insurance policy, you may want to consider getting participating life insurance.
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