What distinguishes non-participating insurance from participating insurance?

Non-participating insurance is distinguished by the fact that it does not pay dividends to policyholders. This type of insurance is typically issued by stock insurance companies, which operate for profit and do not share surplus earnings with policyholders. In contrast, participating insurance is offered by mutual insurance companies, which provide dividends to policyholders based on the company's performance.

The distinction between participating and non-participating insurance is primarily linked to dividend distribution and the type of company issuing the policy. Non-participating policies are structured to provide a fixed benefit without sharing profits, making them more predictable but lacking the potential for additional returns via dividends. This aspect is what clearly separates it from participating insurance, where policyholders have the opportunity for dividends based on the insurer's financial success. Nonetheless, the key characteristic of non-participating insurance lies in its relationship with stock insurance companies and their structure regarding profit distribution.