Non-Linked & Non-Participating Term Insurance
  • Pure protection plans
  • Investment plans
  • Difference b/w both
Non-Linked & Non-Participating Term Insurance
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Sahil Singh Kathait
Written By:
Sahil

Sahil Singh Kathait

Health & Term Insurance

A boy-in-squares bagging escapades of switching streets in groove & sensing musical airy-notes from 6 1". Under wayed nyctophile sketching the walls of life from the panorama of anime.

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Reviewed By:
Priya Singh

Priya Singh

Health, Life & Term Insurance

Priya has been in the content writing industry for over 9 years. She has been religiously following the insurance sector since the start of her career which makes her an avid insurance expert. Her forte lies in health, term, and life insurance writing, along with her knowledge of the latest developments in the insurance sector.

Himanshu Kumar

Himanshu Kumar

Term Insurance, Content Writer

Content Manager with heart, mind, and soul dedicated to creating impactful content that exceeds the market standard, delivers and reaches the readers conveniently. Besides producing high-ranking content, my focus lies in creating content that solves user queries and adds value.

Himanshu Kumar

Written By: Himanshu Kumar

Updated on Jan 15, 2025

Himanshu Kumar

Anchita Bhattacharyya

Term Insurance, Content Manager

Content Manager with heart, mind, and soul dedicated to creating impactful content that exceeds the market standard, delivers and reaches the readers conveniently. Besides producing high-ranking content, my focus lies in creating content that solves user queries and adds value.

Reviewed By: Anchita Bhattacharyya

15 min read

Rhishabh Garg
Written By: Rhishabh Garg
Rhishabh Garg
Rhishabh Garg Term Insurance Head
Rhishabh Garg is the Business Unit Head of Term Insurance at Policybazaar.com. He has over 10 years of experience and currently plays a crucial role in shaping the future of term insurance in the company. Rhishabh also has experience in customer services and crafts new strategies for organizational success, one of which is Policybazaar’s claim assistance program.
Santosh Agrawal
Reviewed By: Santosh Agrawal
Santosh Agrawal
Santosh AgrawalChief Business Officer
Santosh Agarwal is the Chief Business Officer of life Insurance at Policybazaar.com and has over a decade of experience in the insurance domain. She has helped shape Policybazaar's life insurance vertical and ensures the effective execution of the company's overall strategy. Santosh is also responsible for the Term Insurance for Women domain at Policybazaar.com and educates the masses about its importance and benefits.

What is Non-Linked and Non-Participating Term Insurance

While buying a term insurance plan, many of you must have heard of the ‘non-linked, non-participating’ phrase. Have you ever thought about what they are?

To put it simply, a life insurance plan that does not invest in the market is called a non-linked plan. On the other hand, a life insurance plan that does not earn any bonus is called a non-participating plan.

Since a term plan is a pure risk protection plan, it does not invest in the market nor earn any bonus; it is called a non-linked, non-participating term insurance policy. Here is everything you need to learn about these terms.

Concept of a Linked & Non-Linked Term Insurance Plan

Linked Plans Non-Linked Plans
Under a linked insurance plan, apart from the life cover, the insurer invests part of the premiums in different market-linked funds. A non-linked insurance plan is a pure protection policy that only provides financial protection if something happens to the policyholder.
ULIPs are the only policies that fall into a linked insurance plan category. A ULIP invests in market-linked funds to generate profits from the market performance to provide returns to the insurer and the policyholder. Since term insurance is a pure risk protection plan and does not invest in the market, it is often referred to as a non-linked plan. In fact, any life insurance product that does not invest is a non-linked life insurance plan.

Concept of a Participating & Non-Participating Term Insurance Plan

Participating Plans Non-Participating Plans
Under the participating policy, it comes with profit-sharing benefits. Over the financial year, if a company earns profits, the insurer distributes some of the profit as a bonus or dividend to the policyholders. The non-participating policy is a protection-oriented plan, and neither does it earn any bonus. These plans do not provide dividend payouts and do not offer additional annual payouts.
Plans like endowment and money-back policies are often referred to as participating plans because these plans earn bonus declarations. In the case of the return of the premium term plan, the Insurer usually refunds the premium paid towards the plan once you outlive the policy term. In fact, any life insurance product that provides a guaranteed payout at maturity is a non-participating insurance plan.

Key Features of Non-Linked Non-Participating Term Insurance Plans

  • Not Dependant on Market Performance Non-linked plans are pure risk protection plans and do not depend on market instability. Regardless of market performance, the life cover will be delivered to the nominee when the policyholder dies. With a death benefit, you can secure your family's financial future to help them fulfill future goals in your absence.
  • Guaranteed Returns Non-linked and non-participating plans do not earn any bonus and provide a guaranteed payout at maturity time. Regardless of the profits earned by the company, the insured person will still receive this guaranteed payout at maturity. Under this plan, you'll get guaranteed returns at low risk.

Conclusion

A non-participating and non-linked term insurance plan's main objective is to secure the family's financial future in the event of policyholder demise. While buying a life insurance product, understand your financial goals and create a diversified financial portfolio to pick the suitable policy for yourself.

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Understand Non-Linked Non-Participating Term Insurance: FAQs

1. What is an example of a non-participating policy?

Plans like the return of premium term insurance plan is a non-participating policy. It is a protection-oriented plan, and neither does it earn any bonus.

2. What are the advantages of non-linked, non-participating insurance plans?

Non-linked, non-participating insurance plans are pure risk protection plans and do not depend on market instability. Regardless of market performance, the returns are guaranteed.

3. Can a non-working person take term insurance?

While buying a term insurance plan, submitting income proof is mandatory. However, purchasing a term plan for non-working spouses and childrens in India is possible.

4. What is a non-linked insurance Plan?

Non-linked insurance plans are pure risk protection plans that do not invest in the market and offer guaranteed returns. A term insurance plan falls into a non-linked insurance plan.

5. What is the difference between par and non-par?

Non-par plans offer guaranteed and fixed benefits. On the other hand, the par plan has non-guaranteed benefits and may depend on the market performance.

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Sahil Singh Kathait

Written By: Sahil Singh Kathait

A boy-in-squares bagging escapades of switching streets in groove & sensing musical airy-notes from 6 1". Under wayed nyctophile sketching the walls of life from the panorama of anime.