What would typically not be a characteristic of a participating insurance policy?

A participating insurance policy is designed to be beneficial and rewarding for policyholders, typically characterized by a few key features. One of the primary characteristics of such policies is that they provide dividends to policyholders. This means that when the insurance company performs well financially, a portion of the profits is distributed back to those who have purchased participating policies.

Additionally, these policies share profits with policyholders, which aligns with the purpose of being a participating insurance product—enabling policyholders to have a vested interest in the overall financial success of the company.

Lastly, participating policies often come with higher premiums compared to non-participating policies. This is generally because the potential benefits of dividends and profit-sharing are factored into the cost of the insurance.

Given this context, it's clear why the notion that a characteristic of a participating insurance policy might not be true points to the defining aspect that it does not participate in profit-sharing or dividend distribution. Thus, identifying that as not characteristic of a participating policy makes sense within the framework of how these policies are structured and what benefits they offer to policyholders.