What type of policyholder benefits from excess revenues of the insurer?

Participating policyholders are those who own life insurance policies that allow them to share in the surplus generated by the insurer. This means that they can receive dividends, which are the excess revenues that arise when the insurer's actual financial performance surpasses its anticipated performance. This financial structure is rooted in the principle of mutuality, where participating policyholders have a stake in the insurer's profitability.

When an insurance company performs well, exceeding its expected income from premiums alongside lower-than-expected payouts for claims, the surplus can be allocated back to participating policyholders in the form of dividends. These can be used to reduce future premiums, enhance the death benefit, or be taken as cash.

In contrast, non-participating policyholders do not receive any share of the insurer's profits, as their policies are not designed to benefit from excess revenues. Beneficiaries typically receive benefits only upon the policyholder’s death and do not influence or partake in the insurer's surplus. Moreover, not all policyholders benefit equally, as only participating ones are involved in this revenue-sharing mechanism. This makes participating policyholders the correct answer, highlighting their unique position in benefitting from the insurer's excess revenues.