Which option is NOT a feature of a participating life insurance policy?

A participating life insurance policy is designed to offer benefits that are directly tied to the financial performance of the insurance company. The correct answer hinges on understanding the characteristics of these policies and how they typically operate.

One of the key features of a participating life insurance policy is the distribution of surplus based on the insurer's performance. Policyholders can receive potential dividends from the insurer if it performs well in terms of investments and underwriting. Additionally, these policies generally feature a guaranteed cash value that accumulates over time and can be accessed or borrowed against, enhancing the policyholder's financial flexibility.

The option about annual premiums increasing with age does not align with the standard structure of participating life insurance. Premiums for these policies are typically level for the duration of the policy; they do not automatically increase as the insured ages. Instead, they are fixed at the outset, allowing for more predictable planning and financial management for the policyholder.

Overall, the absence of a feature that entails increasing premiums as one ages distinctly differentiates participating life insurance from other types of policies.