What type of policies do stock insurance companies typically issue?

Study for the AD Banker Life Insurance Exam. Test your knowledge with flashcards and multiple choice questions, each equipped with hints and explanations. Ensure you're prepared for the exam!

Stock insurance companies typically issue non-participating policies. These policies do not pay dividends to policyholders because they are primarily owned by shareholders. Instead of distributing profits as dividends, stock insurance companies reinvest those funds or distribute them to shareholders in the form of stock dividends.

In contrast, participating policies, often associated with mutual insurance companies, allow policyholders to receive dividends as the company profits are shared among them. Whole life and term life policies can be either participating or non-participating, depending on the type of insurance company issuing them. However, stock insurance companies predominantly offer non-participating policies, aligning with their structure and purpose, which is to generate returns for shareholders rather than policyholders.

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