Question

What is the primary purpose of participating contracts in insurance?

a.

To provide cash dividends to policyholders

b.

To reduce the premium amount payable by the policyholder

c.

To encourage policyholders to participate in investment decisions

d.

To provide a good return on investment to policyholders

Posted under IC 92 Actuarial Aspects of Product Development

Answer: (d).To provide a good return on investment to policyholders Explanation:The primary purpose of participating contracts in insurance is to provide a good return on investment to policyholders by allowing them to share in the profits of the insurance company through bonuses or dividends.

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Q. What is the primary purpose of participating contracts in insurance?
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