Life Insurance Policy Owner Georgia GA
Reader’s Question:
I am in the process of buying a life insurance. I just want to make sure I get it right. Assuming I got one, does that make me both the insured and the policy owner?
Frances
Atlanta, GA
Well, Frances, it really does get confusing. So, first, let’s go to the basics of a life insurance.
When you are filling out an application, you will be asked how much coverage you think is sufficient. The amount of coverage is your death benefit. You will come across the term “face value,” which refers to the amount your beneficiary will receive in the event that you pass away. Your beneficiary is the one who you will designate to claim your death benefits.
A life insurance product is basically a contract between the insurer and the policy owner. Usually, the policy owner is the one who’s paying the premiums of the contract. So, in your case, if you’re the one who will be paying your premiums, you are the policy owner and the insured. Often, the policy owner is the one who is labeled as the “insured.” However, this is not always the case. Say, for example, your husband bought an insurance policy where he designated you as the insured party. Although he is the one paying for the life insurance contract, when something happens to you, the face value agreed upon can be claimed by you, as the person designated as the beneficiary.
So, to sum it up, a policy owner is the one who is in contract with the insurer, while the insured is for whom the policy is named or who the policy is giving coverage to.
For more details, please call your life insurance agent in Georgia.
Tags: life insurance
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