Participating Life Insurance
Participating life insurance is one of the types of permanent life insurance. Not all insurance companies offer this type of life insurance as the insurance company needs to be setup with a dividend structure in order to provide this type of insurance. If the insurance company providing the participating life policy has extra cash in their coffers, meaning premiums coming in, outweigh the death benefits paid out to families, as well as the companies operating expenses, than each holder of a participating life policy will receive dividends. You develop a cash account within the policy, which is a tax-advantaged savings component within your insurance policy. The dividends within the policy can go towards increasing your policies death benefit, or towards decreasing your monthly / yearly premium payments.
Who would be interested in participating life?
- Someone looking for insurance in which premiums remain level, and have enough of a budget for permanent insurance.
- Someone looking for an investment component within their life insurance product as a tax friendly method of saving.
- Someone looking for level premiums on their insurance policy, with the potential of growing their death benefit over time.
- Someone looking to diversify and find unique methods for retirement savings.
- Someone looking for estate planning in order to protect their estate.