What typically happens with the profits from a non-participating insurance company?

In a non-participating insurance company, the profits generated do not go back to policyholders in the form of dividends. Instead, these profits are distributed to stockholders as stock dividends. This structure is typical for non-participating policies since policyholders do not share in the profits of the company; rather, the company is set up to operate for the benefit of its shareholders.

This distribution mechanism is different from participating companies, where policyowners would receive dividends based on the company's performance. In a non-participating scenario, policyholders are generally only entitled to the benefits stipulated in their individual policies and do not partake in the operational profits of the insurer. This distinction highlights the orientation of non-participating insurance companies towards stockholder returns rather than policyholder profit-sharing.