Participating Policy

Business / Taxes / Participating Policy: When policyholders have what is called a participating policy from a mutual insurance company, they are eligible to receive dividends based on the company’s financial performance. When claims are low and the company’s investments perform well, dividends tend to rise. On the other hand, when claims are high and investment returns slump, dividends are likely to fall. The dividends on a participating policy aren’t guaranteed, so they may not be paid every year. Unlike the dividends paid to a company’s shareholders, participating policy dividends are considered a return of premium. As a result, the dividends are not taxed as income. Dividends may typically be paid out as cash, as additional insurance coverage, or may be used to reduce policyholders’ premiums or repay policy loans. Rules vary from company to company.

Other Words for Policy

Policy Verb Synonyms: approach, procedure, (game) plan, design, scheme, programme, method, system, management, conduct, behavior, strategy, tactic(s), principle(s), protocol, regulation, rule, custom, way, practice, ways and means, action
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Participating Preferred Stock

Business / Finance / Participating Preferred Stock: Preferred stock that provides the holder with a specified dividend plus the right to additional earnings under specified conditions. MORE

Participating Policy

Business / Taxes / Participating Policy: When policyholders have what is called a participating policy from a mutual insurance company, they are eligible to receive dividends based on the company’s financial performance. When claims are lo MORE

Participating Life Insurance Policies

Business / Finance / Participating Life Insurance Policies: Life insurance that pays dividends to policyholders depending on the company's success as provided by few claims and profitable underwritings and investments. MORE

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