Policyholder

The policyholder is the party who enters into the insurance contract with the insurer. They have the right to make claims, change the policy within its terms, cancel it and, in life insurance, often choose who receives the payout.

The policyholder is not always the same as the person covered by the policy or the person who receives the payment. In life insurance, for example, a parent might be the policyholder for a policy covering their child's life, or a person might take out a policy on their spouse. The person whose life is insured is called the insured, and the person who receives the payout is called the beneficiary.

For example, a business owner might take out a key person insurance policy on an important employee. The business is the policyholder and the beneficiary, while the employee is the insured.

Policyholders have responsibilities as well as rights. They must pay premiums on time, give accurate information when applying and making claims, and follow policy conditions, such as taking reasonable steps to prevent losses. Failing to disclose relevant information can lead to claims being refused or policies being cancelled.