What Does Ownership Of A Life Insurance Policy Mean?
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63333 POINTSview profilePeggy MaceMost of the U.S.Ownership of a life insurance policy refers to the person who is allowed to make changes to the policy. The owner can be the person whose life is insured, or the owner can be someone else who has a financial interest in the life of the Insured. The owner can change the beneficiaries and features of the policy without consent from the Insured, Beneficiaries, or Payor.Answered on August 9, 2013flag this answer
37376 POINTSview profileDavid G. Pipes, CLU®, RICP®Business Development Officer, T.D. McNeil Insurance Services, Fresno, CaliforniaIn addition to Peggy Mace’s comments, ownership is like “title.” There are legal issues involved and sometimes it is important to correctly title a life insurance policy. At a minimum the values of the insurance policy are the property of the “owner” neither the “insured” nor the “beneficiary.”Answered on December 26, 2014flag this answer
21750 POINTSview profileJim WinklerCEO/Owner, Winkler Financial Group, Houston, TexasThat is a great question! The terms used in life insurance policies can be confusing. There are three entities in a policy - the owner, the insured, and the beneficiary. The easiest one is the beneficiary - the person or entity (trust, estate, etc.) that receives the benefits from the policy. They receive these benefits when the insured passes away. The insured is the person whose need was the reason for the policy. Here's where it can be confusing. The owner is the person who has legal rights to the policy on the insured. That legal title gives them right to change some of the moving parts of the policy, including the beneficiary. In many cases, the owner and the insured are the same person. I buy a policy on my own life. I am the owner and the insured, and I name my wife as my beneficiary. I retain the option to change the beneficiary (should she pass first God forbid) and the right to use the cash value within the policy. If I bought a policy for my children, I would own the policy, but my child would be the insured, and my wife and I the beneficiaries. I can transfer that ownership to my child once they are able to make the payments, and manage the policy successfully. Once they own the policy, they are free to change the beneficiary to whomever they choose (their wife or child, say). Hopefully that clears things up for you. If it doesn't please feel free to contact me, and I'll walk you through it some more. Thank you for asking!Answered on December 29, 2014flag this answer
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