Participating and Non-Participating Plan
- Insurance

Difference between Participating and Non-Participating Plan


Are you sceptical about investing in the Kotak e-Invest plan? Below is the difference between participating and non-participating policies. Before deciding which one is more beneficial for you, understand the basic differences between the two.


A participating policy enables policyholders to receive a share of the profits earned by the company. The profits are shared as dividends or bonuses, making participating policies profitable. But a non-participating policy does not include any profit shared as dividends or bonuses.

Payment Guarantee and Frequency

Policyholders in a participating plan will receive bonuses and dividends every year. But if you are in a non-participating plan, then your insurer will offer no such benefits. A payout is guaranteed in the case of a participating plan.

You must also know that the percentage of the profit varies from time to time. The percentage of profit received in a participating plan usually depends on the company’s current performance in the market.


A participating policy comes with various guaranteed benefits. But they also offer certain non-guaranteed benefits to policyholders. For instance, the sum assured payable on the maturity date or after the policyholder’s death is a guaranteed benefit.

The non-guaranteed benefits in a participating policy come from the bonuses and dividends. But if you have a non-participating plan, then you will only be eligible for guaranteed benefits. For instance, the sum assured upon the policyholder’s death is one benefit of non-participating policies.

Risks and Returns

Imagine a situation where your insurance company failed to perform impressively in a particular year. If you hold a non-participating policy, then you won’t have to worry about paying a higher premium that year. The premium and maturity amount remain protected from market fluctuations and are secure in case of a non-participating policy.

But in the case of a participating policy, you will face a lot of uncertainty. Market fluctuations will always impact bonuses in the future. Therefore, your insurance company’s poor performance will likely negatively impact your bonuses.


A non-participating policy is a lot more rigid than a participating policy. The benefits that you can enjoy from a non-participating policy are fixed. You will learn about the specific benefits of a non-participating policy while purchasing it.

But a participating policy comes with the highest amount of flexibility. Due to its market-linked nature, you will be able to switch and redirect funds at any time.

Closing Thoughts

Understanding the difference between participating and non-participating policy is essential to secure your family’s financial future. A participating policy might have a certain level of uncertainty associated with it.

But you will also enjoy huge returns by taking advantage of the fluctuating market conditions. You will also enjoy tax benefits on the investment, maturity, and interest amount once you invest in Kotak e-Invest plan.

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