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What is the Difference between a Policy Owner, Insured, and Beneficiary on a Life Insurance Policy?

Making the decision to protect your family with a life insurance policy is a big, important step toward securing your family’s future. According to LIMRA, only 59 percent of Americans have life insurance, and about half of those with insurance are underinsured.1 By making sure your family is adequately protected in the event of your departure, you’re making an important decision to help ensure their security in the years after your passing.
That doesn’t mean that setting up and understanding your policy is easy. Whether you’re signing up for a life insurance policy through your employer or you’re looking to secure your own policy, making sense of your policy can be complicated. One area that many people get caught up in: the terminology surrounding who can do what with a life insurance policy.

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Demystify some of the most common terminology mix-ups between what it means to be a policy owner, the insured, and a beneficiary on a life insurance policy.

In this article, we’ll demystify some of the most common terminology mix-ups between what it means to be a policy owner, the insured, and a beneficiary on a life insurance policy.

Who's who on a life insurance policy

 In general, there are three important roles on any life insurance policy: the policy owner, the insured, and the beneficiary.
  • In most cases, the policy owner, also known as the policyholder, is the person who purchased the policy and who owns it. The policy owner is the person who makes all the decisions about the policy including adding or removing beneficiaries and accessing any cash value available on a policy.2
  • The insured is the person whose life is insured under the policy. The policy owner and the insured can be the same person. In the event the insured and the policy owner are not the same person, there must be an insurable interest on the insured in order to get a policy. That means that the policy owner must demonstrate that policy owner will suffer a financial loss in the event of the insured's death.3
  • The beneficiary is the person who receives the life insurance benefit once the insured person dies. Many life insurance policies allow you to designate multiple beneficiaries, and beneficiaries can be individuals, such as a spouse or other family member, or an estate, trust, or charity.4

Who can make decisions and who receives the life insurance benefit?

 Now that you’re clear on what the different terms mean, you may be wondering who has the power to do what on a specific life insurance policy?
The policy owner is generally responsible for keeping the policy in-force by paying premiums, even if they aren’t the insured or the beneficiary. If the policy allows for revocable beneficiaries, meaning beneficiaries that can be assigned and then removed or changed at a later date, then the policy owner is able to list beneficiaries at will.
Unless the insured and the policyholder are the same person, the insured is not allowed to make changes to the policy. They cannot cancel a policy nor can they change beneficiaries. However, there are some protections for the insured. Since policyholders must have an insurable interest in the insured and the insured, in most cases, must be aware of the policy being written in their name, this allows for the insured to have some say in the policies being written about them.
For example, a husband can get an insurance policy naming their spouse as the insured, and then name themselves as the beneficiary. However, your neighbor cannot take out a life insurance policy naming you as the insured without demonstrating an insurable interest and your awareness of the policy – but rest assured, most states and polices have regulation in place to prevent the latter from happening.
The beneficiaries on a policy cannot make changes to the policy unless they are also the policy owner. This sometimes brings up an issue in the instance when the policy owner ages and becomes incapacitated or unable to make decisions. Most states and policies have regulation in place to control this scenario, but even in the event that it occurs, unless the appropriate legal documents are in place naming the beneficiary as having rights to make insurance decisions, beneficiaries are unable to make policy changes.


Making the decision to invest in a life insurance policy is a smart move to protect your family and loved ones in the event of your demise. However, that doesn’t mean that understanding your policy is easy to do. When deciding to purchase a life insurance policy for yourself or your loved ones, remember to assign your beneficiaries with care, investigate all the terms of your policy, and talk to a licensed insurance agent or life insurance company about what policy is best-suited for your needs.


  1. Insure, How to Make Sure You’re Not Underinsured, 2019
  2. Insuranceopedia, Policyholder, 2018
  3. Investopedia, Insurable Interest, 2019
  4. Investopedia, Designated Beneficiary, 2019

Author: By the Globe Life Staff

Globe Life articles are researched, written, and edited by multiple members of the Globe Life staff including, Marketing Specialists, Content Writers, Product Experts, as well as Legal & Compliance Professionals.

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