0 used to describe an insurance agreement that pays an agreed amount and also pays a share of the profits the insurance company has made:
However, life companies are increasingly also offering variable policies such as variable life policies, variable annuities, with-profits endowment and unit (mutual fund) linked policies.
Myners (2001) discusses how the lack of information surrounding the with-profits funds affects the level of competition in this market.
Participating or with-profits arrangements have a number of advantages in reducing the volatility of outcomes for individuals.
Secondly, if he takes out a with-profits policy he knows that—on face value at least—its value will increase.
The analogy of a "with-profits" life insurance policy may be helpful.
Traditionally, life insurance business is on a with-profits basis.
That statement confirmed the principle that the interests of policyholders and shareholders in with-profits life funds should generally stand in the ratio 90:10.
Those funds result from the build-up of successive reserves from years of over-cautious returns to with-profits policyholders.
