Type of Insurance Policies


 
 
Concept Explanation
 

Type Of Insurance Policies

With Profit and Without Profit Policies

With Profit Policies:   The With profit policies are also called Participating policies as they entitled to bonuses, which are declared after actuarial assumptions (especially future liabilities and anticipated investment returns), as well as marketing considerations. .  The premium of these policies are slightly higher as it provides the right to participate in the progress of the insurer. With profit policies are popular because the bonuses are expected to be more than the extra premium paid. In the With profit policies, the premium is payable for a limited period, but will continue to participate even after the premiums have ceased.

Without Profit Policies:   The Without profit policies are also called Non- participating policies as they are not entitled to bonuses, which are declared after actuarial valuations.  The premium of these policies are slightly less as it does not provide the right to participate in the progress of the insurer. In the Without profit policies, the premium is payable till the end of the policy.

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