In this research, we analyze the fair value of popular insurance product – participating contract (or with-profit contracts) which is embedded with some options. We use a credit mechanism by means of Monte Carlo Simulation to generate the possible cash flow of policyholder base on benefit reserve. The contract can be decomposed to policy claim, bonus option, surrender option and default option. The purpose of this paper is to make them fair presented in the liabilities category. It is noticeable that we add additional default option to the contract valuation framework. However, the default option we added to the contract erodes the contract value which should be restricted by regulatory authorities. Moreover, we use a more practical stochastic asset process to fit the real world situation.