Legal Definitions - policyowner

A policyowner (also frequently referred to as a policyholder) is the individual or entity that legally owns an insurance policy or other financial contract. This person or entity holds the rights and responsibilities associated with the policy, such as the ability to make changes, designate beneficiaries, surrender the policy, or pay premiums.

Here are some examples illustrating the role of a policyowner:

• Example 1: Individual Life Insurance

  Maria decides to purchase a life insurance policy to provide financial security for her family. She completes the application, pays the monthly premiums, and designates her husband as the beneficiary. As the person who controls the policy, pays for it, and has the authority to make changes (like updating beneficiaries or borrowing against the policy's cash value), Maria is the policyowner.

• Example 2: Business Property Insurance

  "Green Thumb Landscaping," a small business, buys a commercial property insurance policy to protect its office building, equipment, and vehicles from damage due to events like fire or theft. The company, Green Thumb Landscaping, is listed on the policy as the insured party and is responsible for paying the premiums. In this scenario, Green Thumb Landscaping is the policyowner, holding the rights to file claims and manage the policy's terms.

• Example 3: Health Insurance for a Minor Child

  John purchases a health insurance policy for his ten-year-old daughter, Lily. Although Lily is the person covered by the insurance (the insured), John is the one who applied for the policy, pays the premiums, and has the legal authority to make decisions about the policy's coverage, such as choosing a different plan or adding other family members. Therefore, John is the policyowner.