What is the difference between participating insurance and whole life insurance?

My sister discovered a phenomenon. Many people suffer from insufficient insurance knowledge and cannot figure out the differences between certain types of insurance and which one is better for them to buy.

Senior sister has also received many private messages from people, such as what participating insurance and whole life insurance are and what are the differences. In this case, senior sister will take this opportunity to analyze it carefully for everyone.

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1. What is participating insurance?

Participating insurance is a so-called insurance company that, after the end of each fiscal year, will distribute the distributable surplus of this type of participating insurance business in the previous fiscal year in the form of cash dividends or value-added dividends according to a certain proportion. , a type of life insurance that is then assigned to customers and is more suitable for people who want to manage their finances.

During the guarantee period of participating insurance, the policyholder can distribute dividends and share operating results with the insurance company.

Many policyholders are impulsive when they see this, thinking that insurance companies are all big companies, so they will definitely make a profit after buying participating insurance.

In fact, this is not the case at all. Dividends are very uncertain. Most participating insurance products will also explain this in the terms. First, take a look at the following picture:

Screenshot of participating insurance terms

In fact, the policy dividends of life insurance are closely related to the participating insurance business. To be honest, no one can predict the performance of this business.

If the insurance company does not perform well in a certain year, the policy dividend may be very small or even zero, and the policyholder will be helpless.

Moreover, insurance companies usually do not publish relevant data in detail. Even if there is a dividend distribution that year, the amount will not be known until the insurance company provides a dividend notice.

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2. What is whole life insurance?

The insurance liability of life insurance is very monotonous, mainly providing death and total disability protection.

Whether the insured dies or is totally disabled due to illness, accidental injury, etc., the insurance company will pay the corresponding insurance money to the beneficiary in one lump sum.

Obviously, protecting your family is the main function of life insurance.

From the aspect of protection period, life insurance can be divided into the following two types: term life insurance and whole life insurance.

Term life insurance is life insurance with a guarantee period, while whole life insurance refers to providing lifelong protection to the insured. In the event that an insurance accident stipulated in the contract occurs, the insured will receive a sum of Life insurance that pays death or total disability benefits as agreed.

It can be seen that whole life insurance has a stronger savings function and is indeed more suitable for families with needs such as wealth inheritance or estate planning.

3. What are the differences between participating insurance and whole life insurance?

1. Different compensation conditions

Whole life insurance can only provide compensation if death or total disability is achieved.

One thing needs to be mentioned. Since whole life insurance can provide protection to the insured for a lifetime, this insurance will definitely provide insurance benefits as long as the consumer does not go through the surrender process midway.

Participating insurance is different from other insurances. It is usually bundled with other insurance types and will not be sold separately.

For example, participating annuity insurance, participating whole life insurance, participating endowment insurance, etc. are essentially participating insurances.

To summarize, different types of participating insurance have different compensation conditions. The actual insurance terms shall prevail.

2. Different functions

Participating insurance not only has the financial management function brought by policy dividends, but also has different risk protection functions according to different insurance terms.

As for whole life insurance, according to the insured amount, it can be divided into two types: fixed whole life insurance and incremental whole life insurance.

The insured amount of fixed-amount whole life insurance is fixed. If a certain product sets a 100% insured amount payout on death, that is to say, purchase 500,000 insured amount, and then when the conditions are met, In the event that the insured is unfortunately in danger, the insurance company will directly pay 500,000 compensation to the beneficiary, which also achieves wealth inheritance.

The insured amount of incremental whole life insurance has an incremental function. A longer life span means more compensation will be provided in the event of an accident, and consumers can obtain benefits through insurance reduction, surrender and other rights.

On the whole, whole life insurance can realize functions such as value protection, wealth inheritance and financial management.

The space is limited. If you want to know which one is better to buy, participating insurance or whole life insurance, it is recommended to read this popular science:

"Participating insurance, universal insurance, and increased whole life insurance are some of the financial insurances. What's the difference? Which one is the most cost-effective to buy? 》

Write it at the end

I am a top student talking about insurance, focusing on objective, professional and neutral insurance evaluation;

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