Non Linked Non participating Life Insurance Plans

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Anupama Nair

Term life insurance is a sure shot way to get a long-term life insurance cover at an affordable premium. A term plan shoulders your dependents from financial risks and helps them take care of their needs and liabilities in your absence. There are two common terms widely used in the world of life insurance — ‘non-participating’ and ‘non-linked’. Many have asked these questions to me. So I thought let me make it clear

As the name suggests, non-linked plans are not market-linked, and their performance doesn’t depend upon the performance of any underlying assets. For non-linked plans, you pay a fixed premium depending on the sum assured. In term life insurance, irrespective of the performance of the market, your nominee gets the sum assured in case of the policy holder passing away during the policy period.

Non-linked products like term life insurance are not based on the performance of secondary markets. It is a pure life insurance cover which is guaranteed irrespective of the financial performance of the life insurance company. This cover helps your dependents remain financially independent in your absence and takes care of their needs.

Non-participating and non-linked plans do not receive dividends, or a share of the profits earned by the insurance company. Although market-linked plans are actively managed by expert fund managers who strive to make the most of your savings and investment, it is subjected to market risk. However, a non-linked insurance plan generally provides guaranteed returns.

As discussed, non-participating and non-linked plans have their pros and cons. Analyze your requirements closely and choose the plan that best suits your requirements. You can also choose multiple life insurance policies, to get the best of both worlds!.

Non-participating Life Insurance Plans

“A non-participating life insurance plan is one where the policyholder does not receive any bonuses or add-ons in the form of dividends declared by the insurer from time to time. As the name suggests, the insurer does not ‘participate’ in the business of the insurance company.

Hence, unlike endowment and money back plans where you get regular bonuses, pure term life insurance policies are non-participating plans where you pay a premium for which you get a fixed life insurance cover. In if the policy holder passes away during the policy tenure, the nominee receives the sum assured.


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