policyowner

A policyowner is the person or entity that holds ownership rights in a life insurance policy or annuity contract. The policyowner typically controls the policy, including premium payments, policy changes, and the administration of the contract. The owner does not have to be the insured; the insured is the person whose life is covered, while the owner may be the insured, a different person, a trust, or a business.

Rights and powers of the policyowner usually include designating or changing the beneficiary, naming or transferring ownership to another person or entity, and assigning the policy to someone else. The owner can request loans against the policy’s cash value (in cash-value policies), surrender the policy, or modify coverages and riders. In many policies, the owner is also the applicant who originally applied for the coverage.

Relationship to the insured and beneficiary: The owner controls the policy and its proceeds, but the death benefit is generally paid to the beneficiary designated by the policy. The insured and the beneficiary can be different individuals, and ownership rights remain with the policyowner regardless of who is insured or who receives the benefit.

Transfers and ownership changes: Ownership can be transferred through an assignment or by appointing a new owner. Ownership structures may involve individuals, trusts, or corporations, with trustees or corporate officers acting as policyowners on behalf of a trust or company. Ownership decisions are important for estate planning, tax considerations, and business planning.