Which policy type allows policyholders to share in company profits?

A Participating Life Insurance Policy is designed to allow policyholders to share in the profits of the insurance company. This is achieved through the payment of dividends, which are not guaranteed but may be distributed to policyholders based on the company's financial performance. These dividends can be used in various ways, such as reducing premiums, purchasing additional insurance, or receiving cash.

In contrast, non-participating life insurance policies do not offer this benefit; policyholders are not entitled to any dividends or profit sharing. Term life insurance focuses strictly on providing coverage for a specific term and does not include any investment or profit-sharing components. Group life insurance typically provides coverage for a group (such as employees of a business) and does not involve the sharing of profits like participating policies do.

Thus, the structure of participating life insurance policies, which emphasizes sharing financial performance outcomes among policyholders, distinctly sets them apart as the correct answer to this question.