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A nonparticipating policy is a type of insurance policy where the policyholders do not have the right to receive dividends, nor can they participate in the decision-making processes such as electing the board of directors. This is in contrast to participating policies, where policyholders are entitled to dividends based on the insurer's performance and can have a say in corporate governance.

Nonparticipating policies are generally associated with stock insurance companies, which do not share profits with policyholders in the form of dividends. Instead, the profits are typically distributed to stockholders. This distinction is important for individuals looking for investment in an insurance policy, as participating policies often appeal to those seeking potential financial benefits beyond mere coverage.

In summary, a nonparticipating policy clearly delineates the lack of member benefits like dividends and governance participation, making it distinctly different from participating plans, mutual policies, and variable policies, which may offer varying levels of participation or ownership involvement.