What Is A Policy Holder On Insurance? Policy Holder Meaning
Delving into the filed of insurance, one of the terms that is sure to come up is "what is a policy holder?". At the same time, most people often confuse the policy holder meaning with "the insured." Insurance is a field that covers not only the insurance policy holders but also other respective persons that have some interest in the insurance policy.
Also Read: How Many Jobs Are Available In Investment Management?
This article provides clear information on insurance policy holder meaning and some other related terms as long as policy holder on insurance is concerned.
Who Is The Policy Holder On Insurance?
Policy Holder Meaning: Simply, a policy holder is the person who owns the insurance policy. So, basically, if you buy an insurance policy under your own name, you’re the policyholder. As a result, you are also protected by all of the details inside.
To be more broad in respect of the answer to "what is a policy holder?"; A policy holder is the person who owns the insurance policy and in most cases has the power and ability to change the policy or cancel it. The policy holder is also the person that is responsible for making sure premium payments are up-to-date.
Due to the position they hold as the insurance policy holders, they get all the benefits described within that policy.
Also, the insurance policy holders also have the option of adding more people to the policy, after which those people would also receive insurance coverage. Such persons do no necessary have to be their relatives. These people in this category are referred to as the insured.
Insurance policy holders are simply referred to as "Policy Owners"
A Classical Example Of What Is A Policy Holder
Below is a classical example of what is a policy holder in respect of insurance policies:
Jamal bought a home insurance policy specifically for his new house. He owns the house and bought the insurance policy, making him the policyholder. The insurance contract also extends coverage to his spouse and dependents. Hence, his partner and his daughter are both insureds as well.
However, they are not the policyholder as their names don’t appear on the insurance contract.
Another clear policy holder example is a wife who purchased a term life insurance policy with her husband included as the insured and name her adult son and herself as the beneficiaries. The wife as the policyholder practically controls the life insurance policy.
As aforementioned, she only has the right to change or cancel the insurance policy.
What Is The Difference Between Policyholder and Insured?
There have been some major confusion regarding the difference between policyholder and insured. In fact, they share some relationship with each other.
Basically, an insured person or persons are those whose interests are protected by an insurance policy. While, an insurance policy holder is the owner of the insurance policy itself.
In such light, the policy holder can also be called the insured since his interest are much likely to be protected by the insurance policy. In the case of home insurance, it means they own the home that’s being insured.and gets all the benefits the insurance policy offers.
While the insured can be the wife, and children whose interests are insured in a life insurance policy. But in this state, they don't actually control the insurance policy. They only have coverage under the insurance policy.
Who Else Is Covered Besides The Policyholder?
In most cases, there are other persons who enjoys the benefit of an insurance covers and are covered by it. These are persons other than the policyholder himself. Often times, these categories of people are relatives or some the policyholder shares some close relationship with.
Below are the people that can be covered besides the policyholder and the type of Insurance policy it is:
- The passengers.and the driver in your car— Car insurance policy
- Spouse and family members that are living with you, but not everyone in the household — Rental insurance policy
- Home structures and the contents inside the house — Home owners insurance policy
- Loved ones after the policy holder passes away — Life insurance policy
Who Is The Beneficiary In Insurance
The beneficiary is the recipient of the payout in a life insurance policy. You may name one or several beneficiaries and as owner or policyholder, designate how much of the death benefit you’d like each one to receive. It’s best to name beneficiaries who are of legal age, which in most states is 18 years of age or older. Naming a minor as a beneficiary can cause legal complications on how the minor would receive the payout after you die.
Conclusion
After having a dive into who and what is a policy holder, and other related concepts, we are hopeful that you will find the resource helpful enough to help you understand policy holder meaning and the difference between policyholder and insured.
