What is the difference between participating and non-participating policy?

  • Life Insurance Articles

When you go shopping, you compare different options, choose the best out of the lot and then negotiate for the right price. So why not compare two different types of policies—participating and non-participating policies—while buying life insurance? This will enable you to make an appropriate choice according to your needs.

Highlighted below are some differences between both the types of insurance policies:

Participating policy

Non-participating policy


A participating policy enables you as a policy holder to share the profits of the insurance company. These profits are shared in the form of bonuses or dividends. It is also known as a with-profit policy.

In non-participating policies the profits are not shared and no dividends are paid to the policyholders. This type of policy is also known as a without-profit or non-par policy.


The bonus that is given in this policy is not guaranteed. It is based on the performance of the insurance company.

In case of a non-participating policy, there is no bonus or dividend paid to the policyholder.

Payment guarantee

The bonuses or dividends are usually paid out annually.

There are no payments in non-participating policies because the profits are not shared.


The most important benefit of participating policies is that it not only provides protection, but also provides returns in the form of a bonus.

The premiums are a little lesser than participating policies.


ULIPs or Unit Linked Insurance Plans that pay bonuses or dividends can be classified as participating policies.

A term insurance or permanent life insurance policy is a non-participating policy.

Trending Articles

Popular Articles
View All

Term Products

ABSLI Life Shield Plan

A term insurance plan that offers you the flexibility of plan options suitable for your family's non- negotiable goals and ensure they need not compromise on their lifestyle. UIN: 109N109V04

  • Choice of 8 plan options
  • Cover your spouse under the same policy
  • Longer Life cover till age 85

ABSLI DigiShield Plan

PROTECTING multiple life needs with one plan is now possible. UIN 109N108V05

  • 10 Plan Options to suit your varied protection needs
  • Flexible death benefit pay-out options
  • Life insurance cover for 1 year or till age 100 yrs

ABSLI Saral Jeevan Bima

A simple plan to protect your family’s financial future (UIN 109N128V01)

  • Simple & affordable plan
  • Flexible premium paying terms
  • Enhance insurance cover with rider

Need help with life insurance?

I agree to the Terms of Usage and Privacy Policy and authorize Aditya Birla Sun Life Insurance Company Limited and its associates to call/SMS/Email/WhatsApp me.

Thank you for your details. We will reach out to you shortly.

1800-270-7000 or reach out to us on this number.

Thank you for your details. Currently we are facing issue in our system.

1800-270-7000 or reach out to us on this number.