With-Profits Policy

Definition

• An insurance policy that pays to the policyholder a share of the profits earned by an insurance company. Profits are distributed usually in the form of annual or monthly dividends, but a final or terminal payment at maturity is also common. Depending on the policy, a guaranteed dividend amount may be included. With-profits policies, also known as "participating policies", are typically life insurance contracts.

Synonyms
participating insurance policy, participating policy, with-profits life insurance policy, with-profits insurance policy, participating life insurance policy

Related Terms and Acronyms

• Death Benefit (DB) — Acronym, Very Important,
  • A payment or series of payments made to the beneficiaries of a life insurance policy.
  ➥ An amount paid to a beneficiary in a life linsurance policy.
• Dividend — Definition,
  • Distribution of earnings to shareholders. In credit unions, it's the money paid to members for deposits, similar to the interest banks pay to their customers for deposits.
• Insurance Policy — Definition,
  • A legal contract between an insurer and entity that specifies what the insurer is required to cover and any benefits the insured entity is entitled to.
• Paid-up Additional Insurance — Definition,
  • The option for a policyholder to purchase additional insurance coverage with additional premiums or policy dividends.
• Permanent Life Insurance — Definition,
  • A class of life insurance policies, which include both universal and whole life insurance, with guaranteed death benefits at the end of their terms.
• Policyholder Dividend Ratio — Definition,
  • A ratio comparing the dividends paid to policyholders to net premiums earned by the insurer.
• Premium — Definition,
  • A payment made to an insurance company for insurance coverage.
• Stock Insurance Company — Definition,
  • An insurance company with multiple stockholders each owning shares in the corporation.
• Vanishing Premium Policy — Definition,
  • A life insurance policy where policy dividends are used to pay the policy's premiums.
• Whole Life Insurance — Definition,
  • Permanent life insurance with level premiums for the policyholder's entire lifetime.