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Canadian Financial, Real Estate and Mortgage Glossary

How often this word is used
50% - Moderately

With-Profits Policy

Synonyms:participating insurance policy, participating life insurance policy, participating policy, with-profits insurance policy, with-profits life insurance policy
Filed Under: estate-management, insurance
Tags: insurance, life insurance

Definition of with-profits policy

with-profits policy
1. 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.

Related Terms and Acronyms:

  • death benefit (DB)   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   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   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   The option for a policyholder to purchase additional insurance coverage with additional premiums or policy dividends.
  • permanent life insurance   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   A ratio comparing the dividends paid to policyholders to net premiums earned by the insurer.
  • premium   A payment made to an insurance company for insurance coverage.
  • stock insurance company   An insurance company with multiple stockholders each owning shares in the corporation.
  • vanishing premium policy   A life insurance policy where policy dividends are used to pay the policy's premiums.
  • whole life insurance   Permanent life insurance with level premiums for the policyholder's entire lifetime.

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