Parties to Life Insurance Policy

Who are parties involved in a life insurance policy?

A life insurance policy is a written contract between the insurance company and the owner of the life insurance contract.

There are five basic participants in a life insurance contract:

  • The Life Insurance Policy Owner or Contract Owner
  • The Life Insurance Agent
  • The Insured Person
  • The Primary Beneficiary
  • The Secondary Beneficiary

 

The Five Parties to a Life Insurance Policy

 

The Contract Owner

This is the person that owns the life insurance policy.

The Agent

The agent is the insurance company.

The Insured

The insured is the person whose life is being insured by the life insurance policy.

The Primary Beneficiary

This is the person who receives the death benefit when the insured person dies.

The Secondary Beneficiary

This is the alternate beneficiary who will receive the death benefit if the primary beneficiary previously died.

 

Example of Life Insurance Contract and Parties to Life Insurance

A wife may buy a life insurance policy on her husband.

The wife would be the owner of the life insurance policy and her husband would be the insured person.

The wife may name herself as the primary beneficiaries to the life insurance. 

In this case, the wife would receive the death benefit when her husband dies.

If the wife had named her children as secondary beneficiaries, and the husband and wife died together in a car accident, the children would receive the death benefit from the life insurance policy on their father.

 

Note:  There are two parties in an agency relationship:

  • The party being represented – the client.
  • The party doing the representing – the agent.


An insurance agent represents his client – the insurance company.

The insurance purchaser is the insurance agent’s customer.

The purchaser is the client of the insurance company.

    

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