Affordable Life Insurance Protection for Your Family

Life Insurance - Who Is Insured?

If you are considering the purchase of a life insurance policy you may be wondering who is the insured?


Usually, the insured takes out the life insurance policy on themselves and pays the premiums on the policy, either monthly, quarterly or annually, to the insurance company. 


The owner of the policy (usually the insured) chooses the beneficiary who will receive the death benefit upon the passing of the insured person.


However, there are times when someone else may own and pay for, a life insurance policy.


If the insured doesn’t pay for the policy, the policyholder will need to demonstrate Insurable Interest in the person they wish to insure for life insurance — or that they have a valid financial reason to take out a life insurance policy on another person. 


Life insurance only pays out a death benefit to an insurance policy’s listed beneficiary or beneficiaries after the death of the insured person. 

 

The named insured person of the policy should be someone family members depend on for financial support; such as, living expenses, so that if the insured dies, a life insurance policy replaces their financial support. 

 

If you provide financial support for your loved ones, it’s important to be the insured on a life insurance policy in case you die prematurely. That way, the proceeds from your policy can be used by your beneficiary for any purpose; such as, to pay living expenses for your family, since you are no longer there to provide the financial support for them.

 

The insured is the person who the life insurance contract is underwritten to insure, and the only person whose death triggers a claim to pay out the death benefit on the insurance contract. 

 

Who is the Insured?

 

The insured is the person listed on the policy whose death prompts the death benefit payout to the beneficiary. 


This person also has financial obligations that necessitate getting life insurance coverage — if they die, their loved ones will financially suffer. So, the proceeds from the insurance policy are used to help provide financial support for those loved ones left behind by the insured.


Who Should be Named the Insured on a Life Insurance Policy?


Anyone with financial obligations or outstanding debts, should be named the insured on a life insurance policy. 


Having a mortgage, being married, sharing living expenses, or having children, are just a few primary examples of when to add a life insurance policy to your financial plan.


How to be Named the Insured on a Life Insurance Policy?


Because the life insurance company pays out the death benefit upon the insured’s death, they take on a certain element of risk by covering them. 


To account for this financial risk, the insured on the policy needs to go through the Underwriting Process before they get approved for life insurance coverage. 


The underwriting process evaluates a life insurance applicant’s age, health, family history, tobacco use, driving record, and lifestyle choices to determine their risk of dying at a given age, and what their life expectancy may be, based on the information used to underwrite the risk for life insurance.


The results of the underwriting process determine how much it costs to cover the insured — which is how much the policy premiums will be each year to insure the person for life insurance. Once approved for coverage, the insured will need to sign the policy documents to accept the insurance company’s policy offer.


Although the beneficiary on the policy can be changed, the named insured of a life insurance policy cannot be changed. For someone else to be insured on a life insurance policy, they will need to go through their own application process and underwriting for a separate policy to be issued. 


Can There be More than One Insured?


Most life insurance policies only have one insured person. 


However, if you and your spouse decide to purchase joint life insurance coverage, then there can be two insureds listed on the same policy. 


The death benefit can be paid out in two different ways when there is more than one insured listed on the life insurance policy:

  • A First-to-Die Policy pays out after the first insured dies. The remaining spouse will need to get a new policy if they still want or need life insurance coverage.
  • A Second-to-Die Policy pays out after both insureds die. The remaining spouse will need to continue to pay the policy premiums to keep the life insurance policy In Force – providing coverage. 

 

Joint life insurance isn’t suitable for most people, and policies with one insured provide better financial protection than joint policies do. 

 

However, if one spouse can’t get their own policy, or if you’re getting life insurance to pay for estate taxes, a life insurance joint policy with two insureds may be more suitable option. 


Who Else Should be Named in a Life Insurance Policy?


Aside from the insured person of a policy, it’s important to list the right people elsewhere on your life insurance contract: 

  • Your Beneficiaries should always be up to date so that the life insurance payout goes to those who you intended to receive the death benefits. 
  • The Policyholder pays for the policy to stay active. Designating the right person for this responsibility guarantees that premiums are paid on time and the policy is not canceled for failure to pay premiums. 

 

If loved ones rely on you financially, you should be the insured on a life insurance policy. Doing so protects their financial well-being if you die unexpectedly and ensures they get the funds necessary to maintain their lifestyle. 

 

Who is the Insured in a Life Insurance Policy?

 

The insured person is a primary subject in a life insurance contract, written between the owner and the life insurance company on the life of the insured person. 

 

When an insured person dies, the insurance company is bound by the insurance contract to pay out a death claim to the beneficiaries listed in the policy.

 

Can a Person Own a Life Insurance Policy?

 

You can own your own policy or you can just be the insured and someone else can own it. 

 

You can own a life insurance policy on someone else and be both the policyowner and the policy beneficiary, but you cannot be the insured and the beneficiary. 


If you own the life insurance policy, you have control over it; such as, who is designated as the beneficiary.

 

The Insured: The person whose life is insured by life insurance, after whose death the benefits go to others (beneficiaries).

 

Who is Paid at Death of a Life Insurance Policy?

 

Upon the insured’s death, the policy proceeds are paid to the named beneficiary, who is listed in the insurance contract.

 

The insured can also be the applicant and/or policy owner.

 

If you have financial obligations, or others rely on your for financial support, you should be named the insured on a life insurance policy.

 

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Life Insurance Who Is Insured?


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