With-profits life insurance

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Updated: Aug 20, 2021

Life insurance where benefits to the policy-holders depend on the financial performance from their premiums. This is in contrast to without-profits life insurance, where a policy-holder receives a guaranteed level of benefits regardless of the financial performance of the fimd. As with-profits policies involve far less risk for the insurance company than without-profits policies, premiums on with-profits policies are less than those on without-profits policies giving the same level of expected benefits at maturity. However, with equal premiums a without-profits poliqr offers more cover during the early years of a policy. A with-profits policy offers much better protection against inflation over the life of the policy than a without-profits policy.

Reference: Oxford Press Dictonary of Economics, 5th edt.



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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.