Co-Founder, Coastal Financial Partners Group, California
The policy owner is the contract owner and is, in many cases, also the life insured. The policy owner has most of the rights in the contract such as the right to designate a named beneficiary and make changes to that designation at any time.
In the case of a cash value life policy, the policy owner owns cash values which is an asset that could be borrowed if needed or, the policy cash surrender value could be accessed if coverage was no longer needed.
The Owner of a life insurance policy is the person who can make changes to the policy, such as terminating the policy, changing the beneficiary, or changing the face amount or premium or features of the policy. The Owner does not have to be the Payer or the Insured, although it often is one or both of those.
Personal property always has an owner, whether it's a person or an entity. Life insurance is personal property, so it has an owner. The owner controls all aspects the policy including it's beneficiaries and is subject to taxation on any gain in the event that the policy is surrendered, lapsed or annuitized. Ownership has it's privileges and it consequences.
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In the case of a cash value life policy, the policy owner owns cash values which is an asset that could be borrowed if needed or, the policy cash surrender value could be accessed if coverage was no longer needed.