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Jibran purchases a participating whole life insurance policy from an insurance company. Yash purchases a non - participating whole life insurance policy from the same
Jibran purchases a participating whole life insurance policy from an insurance company. Yash purchases a nonparticipating whole life insurance policy from the same company. Assuming the insurance company is not conservative enough in its assumptions for both types of policies and it faces a revenue shortiall, what outcome can be expected a Both Jibran and Yash will be affected by the deficit and they both will be equally liable for assuming the associated risks.b Even though Yash is a nonparticipating policy holder, his policy's face value is likely to be reduced significantly and his premiums will remain the same.c Being a participating policy holder, Jibran's death benefit is likely to be reduced and he will have to pay increased premiumsd. Both Jibran and Yash are unlikely to be affected and the burden of the shortfall will solely be borne by the insurance company.
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