Which type of whole life insurance offers dividends to policy owners?

Participating whole life insurance is designed to share its profits with policyholders in the form of dividends. These dividends are typically based on the insurer's financial performance and include factors such as mortality rates, investment returns, and expense management. Unlike non-participating whole life policies, which do not pay dividends and rely solely on fixed premiums and guaranteed benefits, participating policies allow policyholders to benefit from the company's success.

Dividends from participating whole life policies can be used in various ways, such as to reduce premiums, purchase additional insurance, or be taken as cash. This feature makes participating whole life an attractive option for individuals seeking not only permanent coverage but also the potential for additional financial benefits over time.

In contrast, universal life is a flexible premium policy without guaranteed dividends, while term life provides coverage for a specified period without cash value accumulation or dividend opportunities. Therefore, the emphasis on sharing profits with policyholders is what specifically makes participating whole life insurance distinct.