Policyholder
What Does Policyholder Mean?
A policyholder is an individual or entity whose name appears in the records of the insurance company. They are the owner or controller of an insurance policy and have the right to exercise the privileges outlined in the contract. While the policyholder is often, but not always, the insured, they may or may not be one of the policy’s beneficiaries.
For instance, if you purchase a home insurance policy in your own name, you are both the policyholder and one of the insureds, as you are covered by the terms outlined in the contract.
If you live with family members, they are also considered insureds under the policy. However, they are not policyholders, as they do not control the policy, although they are still entitled to its protections. The same applies to life insurance policies, where multiple beneficiaries may exist.
In some cases, there may be more than one policyholder, but even then, there is a designated “named policyholder” or “named insured” who is responsible for managing the policy. This individual also has the authority to request changes to the policy from the insurer.
Policyholders are sometimes referred to as policy owners.
Insuranceopedia Explains Policyholder
An insurance policy is fundamentally a legal contract, and for it to be legally enforceable, there must be at least two parties involved: the insurance company (the insurer) and the policyholder (the client) who purchases, pays for, and agrees to the terms and protections outlined in the policy documents.
The policyholder is often also the insured, but this is not always the case. Depending on the terms of the contract, the policyholder may be the holder or controller of the policy, while the insured could be a different party.
For example, a business owner might purchase a life insurance policy on the life of her business partner and name herself as the beneficiary. In this case, she is the policyholder and the beneficiary, but not the insured.
Policyholders are typically related to the insured in some way—they could be a relative, a business partner, or, as in the example above, a corporation. However, in most cases, such as with automobile and home insurance, the policyholder is also the insured.
As a party to the contract, the policyholder has several obligations to the insurer, including providing accurate information for underwriting purposes, adhering to the agreed-upon terms, and paying the required premiums.
In short, the policyholder is the individual or entity that purchases the policy and holds the authority to exercise the rights outlined in the insurance contract, including the right to control the policy.
