A participating policy
A)has no incontestability clause.
B)is a form of endowment insurance.
C)may pay dividends.
D)requires a savings function.
E)contains no tax benefits.

Question

Quizplus · Accepted Answer

A participating policy refers to a policy where the policyholder is entitled to receive a share of the insurance company's profits in the form of dividends. Therefore, choice C stating that participating policies may pay dividends is the best fit. The other options are incorrect. Incontestability clause is a provision that limits the time within which an insurer can dispute claims made under the policy. Endowment insurance is a type of life insurance policy that pays a lump sum at the end of the policy term or upon the death of the insured. A savings function is not a requirement for a participating policy. Participating policies may have tax benefits, but this is not expressly stated in the question.

A Participating Policy