In a participating policy, the insurance company shares the excess profits called dividends with the policyholder. Typically these dividends are not taxable because they are considered an overcharge of premium. The greater the overcharge by the company, the greater the refund/dividend. For a mutual life insurance company, participation also implies a degree of ownership of the mutuality.
At least 2 factors impact suitability. They are age and budget. Typically, the earlier you apply for permanent insurance the lower the price. You’ll want to have this coverage in place permanently, but may not want to keep paying forever. As a rule of thumb we suggest younger than 5 or older than 55. You may want to consider converting some of your existing Term insurance to Permanent Policy if this is an option on your existing policy.
Generally, you pay into a permanent plan for 20 years to life, and while you pay, you may earn dividends which may purchase additional insurance, create a cash value or even make the payments for you. This is known as "premium flexibility".
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Coinsurance: A provision in a health insurance contract by which the insurer and insured share, in a specific ratio, the covered expenses under a policy. For example, the insurer may reimburse the insured for 80 per cent of covered expenses, the insured paying the remaining 20 per cent of such expenses.