Updated on July 18, 2023
The term ‘ownership’ refers to the legal and financial control a person or entity holds over an insurance policy. When someone is designated as the owner of an insurance policy, they have certain rights, benefits, and privileges associated with that policy.
Key details related to ownership
Control and Decision-Making – Ownership in insurance gives the policy owner the authority to make decisions and have control over the insurance policy.
Policyholder vs. Insured – The policy owner may or may not be the same person as the insured individual covered by the policy.
Rights and Benefits – As the owner, one has rights and benefits associated with the policy, such as accessing cash value, modifying coverage, and choosing beneficiaries.
Transfer of Ownership – Ownership can be transferred to another person or entity through a written request, allowing the new owner to assume rights and responsibilities.
Collateral Assignment – Policy ownership can be assigned as collateral for a loan, giving the lender an interest in the policy’s proceeds.
Beneficiary Designation – The policy owner has the power to designate beneficiaries who will receive the policy proceeds upon the insured person’s death.
Legal Considerations – Ownership involves legal obligations and compliance with policies, laws, and regulations governing insurance contracts. Proper documentation and adherence to procedures are important.