Question

What is the main difference between participating and non-participating insurance policies?

a.

Participating policies have higher premiums but lower guaranteed benefits compared to non-participating policies.

b.

Non-participating policies offer bonuses while participating policies do not.

c.

Participating policies allow policyholders to share in the insurer's profits, while non-participating policies do not.

d.

Non-participating policies have fixed premiums and benefits, while participating policies do not.

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (c).Participating policies allow policyholders to share in the insurer's profits, while non-participating policies do not. Explanation:Participating policies allow policyholders to share in the profits of the insurance company through bonuses or dividends, while non-participating policies do not offer this feature.

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Q. What is the main difference between participating and non-participating insurance policies?
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