There are two broad categories that this policy falls under, one namely the participating and the second the non-participating. Term life insurance their categorization is vaguely and loosely connected as the difference between them is hardly any. A participating whole life insurance policy is where the insurer shares the excess rewards, known as dividend with the policyholder. If you are one among t hose thinking where the extra amount came from, well it is from the company’s profit annually that is distributed among the share holders. Policy the second variant the non participating insurance policy has its own set of rules everything from premiums to the policy term and benefits are set down right and they cannot be altered later.