Under a participating variable policy, the annuitant participates not only in the investment performance of the company but, if the company should experience savings in underwriting or expense factors beyond that which was charged in the contract as an administrative load, the contract provides that the company may credit the expense savings realized to the individual variable annuity accounts.
Under the nonparticipating variable policy, the annuitant participates only in investment earnings, and the company would stand to profit from any savings realized.