What is a Policyholder?
A Policyholder is the person or organization that owns an insurance policy and has entered into a contract with the insurance company. The Policyholder is responsible for paying the policy premiums and is entitled to the rights, benefits, and coverage provided by the policy. This individual or entity has control over the policy terms, such as naming beneficiaries, adjusting coverage amounts, and making changes to the policy.
For example, in a life insurance policy, the Policyholder may be the insured person or a third party, such as a spouse or business partner. The Policyholder has the authority to make decisions regarding the policy, like changing the beneficiaries or borrowing against the policy’s cash value in a permanent life insurance plan.
Being a Policyholder comes with certain obligations, including ensuring that premium payments are made on time to keep the policy active. If the Policyholder fails to meet these obligations, the policy may lapse, resulting in the loss of coverage. Understanding the rights and responsibilities of a Policyholder is crucial for effective management of the policy and its benefits.
