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What’s the Difference Between the Policyowner vs Insured? | Q&A Fridays

September 20, 2019
Our goal is to educate and advise on life insurance options, so you can feel confident in making the right choice, whether that’s through Quotacy or somewhere else. To ensure we provide accurate and trustworthy information, our writers follow strict editorial standards.

Who is the life insurance policy owner? What do they do? What is the role of the insured? We discuss the difference between the policyowner vs insured in today’s episode of Q&A Fridays.

If you’re the owner of your policy do not list yourself or your estate as the beneficiary. The death benefit proceeds would then need to go through probate court and your creditors would have access to it.

It’s important to note that if the insured person is not the policyowner they legally do not get a say in what happens with the policy. They can have a conversation with the policyowner, obviously, regarding their wishes but the policyowner is the one with the power.

We receive many, many comments from people asking how they can essentially undo the policy that so and-so owns on them and the answer is usually that you can’t do anything. Non-owner insureds don’t have any control over the policy.

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If the life insurance policy was taken out fraudulently then you can call your state’s insurance commissioner and ask for help. However, if the policy was taken out legally and you simply changed your mind and don’t want that person owning life insurance on you anymore the only thing you can do is ask that person to terminate the policy. They don’t have to do what you ask though.

Thankfully this situation isn’t a common occurrence. The majority of life insurance policies are purchased with good intentions and with the consent of everyone involved. In fact, if you are applying for life insurance on someone other than yourself the insurance company requires that other person’s consent and you also need something called insurable interest. Insurable interest exists when the death of one person would negatively financially affect another person.

For example, if two individuals co-own a business they have insurable interest on one another. Each other’s death would likely affect their business. The policy payout upon a co-owner’s death can be used to help keep operations running smoothly during a leadership transition as well as to make up for any loss of business value or revenue due to the owner’s untimely passing.

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Okay. Time for a quick review.

If you’re applying for a life insurance policy you’re the applicant. An applicant can be applying for life insurance on themselves or on someone else.

You can own your own life insurance policy or you can just be the insured and someone else can own it. You can own a life insurance policy on someone else and be both the policyowner and the policy beneficiary but you cannot be the insured and the beneficiary.

If you own the life insurance policy, you have control over it. If you’re the insured but not the owner you don’t get a say other than giving the initial required consent.

When the insured dies the beneficiaries receive a death benefit payout and the insurance company’s obligation is fulfilled.

If you have any questions about life insurance, make sure to leave us a comment. And if you’re ready to get quotes check out Quotacy.com. We’re here to help you find the best deal on the life insurance you want.


  1. Tyler Force

    Does the insured have access to the cash value if the policy owner is someone else. If not can they get access if given permission by the policy holder?

    • Natasha Cornelius, CLU

      No, only the policy owner has access to the cash value, even if the insured is someone else. The policy owner can access the cash value and use the money however they wish, including giving it to the insured. There may be specific circumstances, such as a divorce or legal agreement, where an insured person could be granted access to the cash value, but this would require the consent of the policy owner or a court order. In general, only the policy owner has the right to access the cash value of a life insurance policy.

  2. Derrick

    Hi Natasha, a mother wants to be the policyowner and wants to insure her daughter because she has an insurable interest on her daughter’s two children. She has spoken to her daughter but the daughter doesn’t want the insurance even though she’s not paying for the premium. would it still be possible for the mother to purchase the life insurance on her daughter w/out the daughter’s consent?

    • Natasha Cornelius

      The daughter will need to sign off on the life insurance application, among other documents. The daughter may also need to participate in a phone interview and medical exam with the insurance company.

  3. Wanda Cureton

    My husband is the owner of his mother’s policy who recently passed. She made her daughter the beneficiary. Who has the right to the policy?

    • Natasha Cornelius

      When an insured individual dies, the insurance company pays the death benefit to the beneficiary, not the policy owner (unless the policy owner and beneficiary are the same person).

  4. Sonia

    I’m the insured and beneficiary on a life insurance that my ex husband just cancelled. Do I have any rights to the cash value it has buy throughout the years and any say regarding cancellation.

    • Natasha Cornelius

      Hi Sonia, an individual cannot be both a beneficiary and insured on a life insurance policy. A life insurance policy pays a death benefit to a beneficiary when/if the insured person dies.

      If you were the insured, your ex-husband was likely the policy owner and beneficiary. As policy owner, he has full control over the policy and can cancel it any time he chooses.

      If you were the beneficiary and your ex-husband was the insured and owner, you may have rights if you live in a community-property state and the policy was purchased after you were married. Your divorce decree may also have stated what is to be done about the policy.

  5. Kaushik Bhattacharya

    Who gets 80C benefit on premium paid – Policy Owner or Insured Person?

    So basically, who is tax-liable for the policy – Holder or Insured?

    • Natasha Cornelius

      Hi Kaushik, countries don’t have the same life insurance laws and regulations. Your IP address tells me you may be in India. I would advise that you reach out to a local insurance company with your questions. Thank you!

      • Lucy

        Can a mother cancel her son’s policy if she finds out that the insured son is not Policy owner, but his wife is the policy owner and beneficiary and his life is in danger after he is insured?

        • Natasha Cornelius

          The owner of the policy has control over the policy, which includes the ability to cancel it. If the mother is not the policy owner, she cannot cancel it.
          If someone fears for another person’s life, they should contact their local authorities.


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