Which of these describes a participating insurance policy?

A participating insurance policy is characterized by the fact that policy owners are entitled to receive dividends. These dividends are often a portion of the insurer's profits, and they can be distributed to policyholders based on the company's performance. This feature aligns with the mutual insurance model, where policyholders are also considered stakeholders in the company, enjoying a share of the company's surplus.

In contrast, the other options do not accurately describe a participating policy. For instance, while some insurance products may have lower premiums, participating policies do not inherently guarantee a lower cost compared to non-participating options. Guarantees of returns may apply to certain types of insurance, but they do not specifically define a participating policy; dividends are typically not guaranteed and can vary year to year based on the company’s financial performance. Lastly, policyholders of participating policies often have a vote in company matters, reflecting their stake in the mutual insurer, which is contrary to the idea that they have no say in policy terms.