A participating insurance policy may do which of the following?

A participating insurance policy may do which of the following?

a. require 80% participation

b. pay dividends to the policy owner

c. provide group coverage

d. pay dividends to the stockholder

Answer: b. pay dividends to the policy owner

As far as a taking-part insurance policy is a policy that assures the policyholder to receive a dividend from an insurance company’s revenue. Thus, these dividends are distributed directly to those who own the policy whether it is the people who have insurance policies with them or the stockholder of the convincing corporations.

By virtue of participating policies being issued by the mutual insurance companies, owning by the policyholders themselves rather than the stockholders, the dividends are paid to them. The insurance company’s profitable year-end balances can also be divided into their owners in the form of dividends.

One of the key dividends from this policy is that it can be used to purchase extra insurance protection, make future premiums payments or give it the policy owner as a cash dole out. These policies are built with a unique feature of insuring the policyholders besides offering them with the potential profit capacity.