Home Life insurance Life insurance basics Who’s who on a life insurance policy Who’s who on a life insurance policy It’s important to have the right people listed in your life insurance policy. Doing so secures the financial health of your loved ones. Written by Huma Naeem | Reviewed by Nupur Gambhir Nupur Gambhir Nupur Gambhir is an insurance expert and managing editor of Insure.com. She specializes in life and health insurance content, and has experience as a marketing consultant. | Updated on: October 29, 2024 Why you can trust Insure.com Quality Verified At Insure.com, we are committed to providing the timely, accurate and expert information consumers need to make smart insurance decisions. All our content is written and reviewed by industry professionals and insurance experts. Our team carefully vets our rate data to ensure we only provide reliable and up-to-date insurance pricing. We follow the highest editorial standards. Our content is based solely on objective research and data gathering. We maintain strict editorial independence to ensure unbiased coverage of the insurance industry. Knowing who’s who on a life insurance policy is an important part of securing financial security for your family. If you list the wrong beneficiaries, then the hard-earned money you put towards premiums won’t provide the right people with the right financial support. Here’s everything you need to know about who’s who on a life insurance policy. Key Takeaways The person who owns the life insurance policy is the only person who can make changes to the policy and pays the policy premiums. The insured is the person whose life is covered on a life insurance policy. Only the beneficiaries mentioned on the policies are entitled to collect the life insurance death benefit. The three most important people in your policy Generally there are three parties to a life insurance policy: The policyholder: The person who owns the policy and pays the life insurance premiums. The insured: The person whose life is insured. When the insured dies, the life insurance company pays out the death benefit. The beneficiary: The person who collects the death benefit when the insured dies. “It’s crucial for policyholders to revisit [designations] periodically. Life changes like marriage, children, or new financial responsibilities may necessitate updates,” says Scott Hansard, owner of Hansard Insurance Agency. Most of the time, the policyholder is also the insured. For instance, the breadwinner of a family might purchase an insurance policy on their own life to protect their spouse and children if they die. In that case, the breadwinner is the policyholder and the insured. Rarely, a policyholder could also be the beneficiary. That same spouse might purchase an insurance policy on their spouse’s life, naming themselves as the beneficiary, to protect their family’s financial welfare in case their spouse dies. If there are three different people filling the three different roles, there could be tax implications and you will experience what is referred to as the Goodman Triangle. In general, two of the roles should be the same person to avoid the tax trap. Who is the owner of a life insurance policy? The owner of a life insurance policy is called the policyholder, and this is the person who pays for and has control over the life insurance policy. The owner has full control and responsibilities including: Paying the policy premiums. Choosing how long coverage lasts. Determining who the beneficiaries are and how much of the death benefit they will receive. Making any changes to the policy, such as changing the beneficiaries or surrendering the policy. Using the cash value if it is a permanent life insurance policy. Who is the insured on a life insurance policy? The insured on a life insurance policy is often the same person who owns the policy, but they don’t have to be. The life insurance company only pays out the death benefit when the insured dies. Because of this, premiums are also based on the insured’s health, lifestyle, age and other factors. Generally, the insured and the policyholder are the same person. But if they’re different, the insured person doesn’t have the right to adjust the policy. QuickTake What is cash value life insurance and how does it work? How to read your life insurance policy How to buy life insurance Comprehensive guide to life insurance: What it is and how it works How to find a lost life insurance policy How to get life insurance if you're uninsurable The life insurance contestability period: What you need to know What happens to the cash value of my whole life insurance policy when I die? Is accidental death and dismemberment insurance right for you? How to make sure you have enough life insurance Life insurance riders: What they are and how they work Guide to life insurance for transgender applicants Understanding your life insurance policy options What is a life insurance beneficiary? How life insurance works for high-net-worth individuals Family caregivers guide to insurance: What you need to know How to use your insurance to help your adult children Covid-19 and life insurance: What you need to know? 10 ways to save money on life insurance Combination life insurance or long-term care: Make the right pick Life insurance for new parents The basics of return of premium term life insurance When to reassess your life insurance needs Guide to life insurance for children Life insurance for people with pre-existing conditions Can I change my insurance plan if I get pregnant? | Insure.com The most expensive medical conditions for life insurance buyers Life insurance trusts for child beneficiaries 5 questions to ask before you buy term life insurance Using life insurance to fund retirement The most common mistakes people make when choosing their life insurance beneficiaries What to do if you get declined for life insurance The advantages of survivorship life insurance policies Life insurance for people with risky occupations What is guaranteed issue life insurance? What is an accelerated death benefit rider and how does it work? What is a contingent life insurance beneficiary? Life insurance for women Can you avoid estate taxes with a life insurance trust? What are per capita and per stirpes life insurance beneficiaries? Why it’s important for mothers, especially single mothers, to have life insurance Do I need a life insurance trust? What is an irrevocable life insurance beneficiary? Life insurance for parents How does the life insurance underwriting process work? How much life insurance do you need? Combination life insurance merges long-term care with your policy What is simplified issue term life insurance? Is life insurance taxable? How to convert a term life policy to permanent life insurance Life insurance tax surprise: The unholy trinity How life insurance rates are determined How to do a needs analysis before you buy life insurance Sports that could knock you out of contention for life insurance Variable life and variable annuity sub-accounts: The more the merrier? See more > Who gets the money from a life insurance policy? Only the listed beneficiaries on a life insurance policy can get the death benefit. For this reason, it’s important for policyholders to regularly review their life insurance policy to make sure the named beneficiaries still are the people who should collect the money. You should review your life insurance policy each time you experience a major life event, such as getting married, having a child, or buying a house. Additionally, there should be a primary and contingent beneficiary. If the primary beneficiary dies before the insured, the contingent beneficiary gets the death benefit. Key differences between the policyholder, insured and beneficiary PolicyholderInsuredBeneficiaryResponsible for paying insurance premiumsPerson whose death would prompt death benefit payoutPerson who receives the death benefit payoutAble to adjust policyCan only adjust policy if they are also the policyholderCannot make any changes to the policy, everOnly person who can access the cash value if they own a permanent life insurance policyPerson whose health is what premiums are based onNeeds to be financially impacted by the death of the insured to be listed on the policy Misty Spittler, a public adjuster at Insurance Claim Recovery Support, says that policyholders should “review the details regularly” because she has “seen instances where outdated beneficiary designations led to disputes and delays in benefit distributions. Regularly updating these roles in response to life changes like marriage or new dependents ensures that the policy aligns with one’s current wishes, minimizing potential conflicts during claim settlement.” If you’re in the market for a life insurance policy, you can compare the best life insurance companies as reviewed by surveyed policyholders right here at Insure.com. Frequently asked questions Who are the legal parties to a life insurance contract? The legal parties tied to a life insurance contract are the policyholder and the insured. The policyholder pays the premiums, and the insured is responsible for being totally honest in the application process. Are the policy owner and insured the same person? The policyholder is usually also the insured, but sometimes, they can be different people. For example, someone may buy a life insurance policy on someone else, such as their spouse or child. Can there be more than one insured person in a life insurance policy? A life insurance policy only covers one person, unless you purchase joint life insurance. Joint life insurance is paid out differently than a typical life insurance policy, so you should talk to a financial advisor before purchasing it to make sure it is the right option for you. × Get Free Life Insurance Quotes Today! Zip Code Please enter valid zip Age Age 16 – 20 21 – 24 25 – 34 35 – 44 45 – 54 55 – 64 65+ Coverage Amount Coverage Amount $50,000 – $100,000 $100,000 – $200,000 $200,000 – $300,000 $400,000 – $500,000 $500,000 – $1,000,000 $1,000,000 – $2,000,000 $2,000,000 – $5,000,000 $5,000,000+ Coverage Type Coverage Type Whole Life Term Life Final Expense Not Sure Gender Gender Male Female Non-Binary Tobacco Use Yes No Compare Quotes Related Articles What is term life insurance and how does it work? By Desiree Ghazi What is final expense insurance and how does it work? By Desiree Ghazi Mortgage protection insurance: Who needs it and why By Huma Naeem Best wedding insurance companies in 2025 By Danielle Dorchester The 10 largest life insurance companies By Chris Kissell What is cash value life insurance and how does it work? By Desiree Ghazi On this page The three most important people in your policyWho is the owner of a life insurance policy?Who is the insured on a life insurance policy?Who gets the money from a life insurance policy?Frequently asked questions ZIP Code Please enter valid ZIP See rates