participating life insurance policies

Definition

Life insurance policies that pay dividends to its policy holder based on how well the issuing company is doing. For example, if Sue buys a participating life insurance policy from Acme Insurance and the company does increasingly well each quarter (decreases in the amount of claims filed), the dividends that are paid to Sue will increase. If the company starts to do poorly (surge in the amount of claims that is receives), Sue's dividends will also decline.
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participating insurance participating preferred