Nonparticipating life insurance policy

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Nonparticipating life insurance policy

Life insurance policy whose policyholders do not receive dividends, because they are not participants in the interest, dividends, and capital gains earned by the insurer on premiums paid.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Nonparticipating Life Insurance Policy

A life insurance policy in which the policyholder does not have the right to receive a portion of the investments that the insurance company makes with the policyholder's premiums. That is, in a nonparticipating life insurance policy, the policyholder makes his/her premiums and, in exchange, the beneficiary receives a lump sum upon the policyholder's death. This sum will not increase or decrease depending on the performance of the insurance company's portfolio.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
In the case of nonparticipating policies, all elements -- premiums, death benefits, and the schedule of cash values -- are guaranteed and fixed.
In the case of nonparticipating policies, all elements--premiums, death benefits, and the schedule of cash values--are guaranteed and fixed.
The law as written restricts shareholders of a life insurance company to 7.5% of the profits in both participating and nonparticipating policies.
Clients with old nonparticipating policies (which don't earn dividends) that don't reflect updated mortality experience may benefit by replacing them with policies with lower premiums or higher death benefits.
Again, it may be necessary to replace only nonparticipating policies that have not been upgraded.
Since there are no dividends on nonparticipating policies, the net cost of these policies is equal to the total premiums paid.