Here are the differences. Participating policyNon-participating Policy It allows the policyholders to share the profits that the company earns.It does not share any profits in the form of dividends. This is a flexible plan.  In a market-linked policy, you can switch and redirect funds.This plan is comparatively rigid. In this policy, the bonuses in the future depend on the market and the financial condition of the company.This plan remains unaffected by the fluctuations of the market. Both the premium and maturity amounts are secured under the policy. Apart from the guaranteed benefits, a participating policy offers many other benefits such as cash dividends and bonuses.This plan only offers guaranteed benefits.