Participating Life Insurance Policies

The participating life insurance policies was created more than 100 years ago. The policyholder pays premium into the policy, to be used to pay the death benefits and expenses. The remainder is invested to earn a good rate of return (compared to the yield that the individual policyholders could get on their own). The actuaries were specially trained to treat policyholders fairly and to distribute the surplus fairly in the form of reversionary bonuses.

Much has changed during the recent 20 years. Many insurance companies have been converted into for-profit companies. There is greater competition to get new business, leading to the launching of new series of policies with complicated bonus structures. In this chaotic situation, it is likely that many policyholders will get less than their fair share of the returns.

Many policyholders wonder why their yield on maturity is so low, compared to the investment yield earned by the life insurance fund. Although a large part of the yield is taken away to cover the high cost and expenses, they wonder if they are given their fair share of the remaining yield.

In today's environment, the participating life insurance policy is an unsatisfactory product to the consumer. It gives a poor yield and is not transparent.

Tip: Do not put your long term savings in a participating life insurance product. It is better to buy term insurance for the protection and to invest in a low cost investment fund. Read this FAQ:
http://www.tankinlian.com/faq/savings.html