Policy Owner
A policy owner is the person or legal entity that owns and controls an insurance policy. The policy owner makes decisions about the policy, even if they aren't the person insured.
The policy owner is the legal owner of an insurance policy. They have the authority to make decisions about the policy, such as changing the level of cover, updating personal details, nominating beneficiaries (where applicable), making a claim or cancelling the policy.
In many cases, the policy owner and the person insured are the same person. However, this isn't always the case. For example, one spouse may own a policy that insures their partner, parents may own a policy for a child, or a business may own insurance over a key employee.
It's important to understand that owning a policy is different from being insured under it. The person insured is the individual whose life or health is covered, while the policy owner is responsible for managing the policy and, in many cases, paying the premiums.
Choosing the right policy owner can have legal, financial and estate planning implications. Before setting up a policy, it's worth discussing the ownership structure with your adviser to ensure it aligns with your personal circumstances and long-term goals.
Why It Matters
The ownership of your insurance policy can affect who controls the policy, who can make changes and, in some cases, how benefits are paid. Getting the ownership right from the beginning can help avoid complications in the future.
Common Misunderstandings
"The policy owner and the person insured must be the same person."
No. While this is common, a policy can often be owned by another individual, a business or a trust.
"The person insured controls the policy."
Not necessarily. The policy owner is generally the person with the legal authority to make decisions about the policy.
"I can change the policy owner whenever I want."
Possibly. Some ownership changes are straightforward, while others may have legal, tax or policy implications.
"Who owns the policy doesn't matter."
It can matter a great deal. Policy ownership may affect estate planning, business arrangements and how benefits are managed.
FAQs about Policy Owners
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The right owner depends on your personal, family or business circumstances. Your adviser can help you decide on the most appropriate ownership structure.
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Yes. Businesses commonly own policies such as Key Person, Shareholder or Debt Protection insurance.
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Many insurers allow ownership to be transferred, the current policy owners need to sign off on this and information is required for the new owners.
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Not always. This depends on the type of policy, who owns it and how it has been structured.
Choosing the right policy owner is an important part of setting up your insurance correctly. If you're unsure who should own your policy or you'd like to review your current ownership structure, talk to a New Vision Financial Services adviser. We'll help you ensure your policy is set up to support your personal, family or business goals.