Syndicated Financial Columnist, Host of the weekly talk show Steve Savant's Money, the Name of the Game, Scottsdale Arizona
Non participating whole life is a level guaranteed premium to a fixed age to the maturity date of the contract, generally from age 100 to age 121. Non participating means there are no annual or terminal dividends generated by the policy. The crediting method is generally interest rate driven.
Non-parcipitating whole life insurance is insurance under which the insured is not entitled to share in the divisible surplus of the company. Everything is set when a non-participating policy is taken out and nothing can be changed: death benefits, premiums and cash surrender values are all determined when the policy is purchased.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
Non-participating whole life insurance is very straightforward coverage. Your premiums are fixed and guaranteed for life. You pay your premium for the policy and at whatever point in time death occurs, the policy pays out a death benefit. As with any permanent life policy, it does build cash value that you can borrow against, however these policies do not pay any dividends that can normally be used to reduce your premiums, secure paid up additions (increasing your total death benefit), or making a payment to the policyowner. Only participating whole life policies can pay dividends.
I hope the information is helpful - please feel free to contact me for assistance with your life insurance needs, including quotes and policy comparisons, and if you have any other questions. Thanks very much.
That is a great question! Many insurers are regular corporations, and some are mutual or fraternal organizations. As they make money, as in any corporation, there are dividends that may be paid. Mutual insurers are a lot like mutual funds, ( I am simplifying this tremendously) in that they will generally pay those dividends, as each policy holder is a shareholder in the company. The ones that pay are "participating"; the ones that don't are "non-participating." Unfortunately, there are far less participating companies than non-participating. I hope that helps, thanks for asking!
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I hope the information is helpful - please feel free to contact me for assistance with your life insurance needs, including quotes and policy comparisons, and if you have any other questions. Thanks very much.