Policyholder

A Policyholder is the person who owns the insurance policy and is legally responsible for paying the premiums.

They are the contracting party with the insurance company and hold all the rights under the policy, including the right to change the nominee, assign the policy, take a loan against the policy's surrender value, or surrender the policy. The policyholder may or may not be the same person as the insured. What is a Policyholder? In a self-owned policy, the policyholder and the insured are the same person. If you buy a term life insurance policy on your own life, you are both the policyholder and the insured. The sum assured will be paid to your nominee upon your death. However, in a policy taken by an employer on an employee's life, or a parent on a child's life, the policyholder and the insured are different persons. The policyholder has the authority to make all decisions about the policy while alive. They can change the nominee, assign the policy to another person as collateral, take a loan against the policy's surrender value (for endowment and whole life policies), or surrender the policy for its cash value. These rights do not transfer to the nominee or beneficiary — they are exclusively with the policyholder. For health insurance specifically, the policyholder is the person in whose name the policy is issued. In a family floater policy, the primary policyholder (say, the father) covers himself, spouse, and children under one policy. Each covered person is an "insured" but only the father is the "policyholder." The policyholder can add or remove members from the floater during the renewal period. The policyholder's age, health, and claims history affect the premium and renewal terms. If the policyholder develops serious health conditions, the insurer cannot refuse to renew the policy (as per IRDAI guidelines for health insurance), but the premium may increase at renewal based on the policyholder's age and claims history. The death of the policyholder in a life insurance policy does not automatically terminate the policy. If it is a term policy with no savings component, the policy remains valid and the nominee can claim the sum assured upon the insured's death. If it is an endowment or money-back policy, the policy can be continued by the legal heir (who becomes the new policyholder) or surrendered for its cash value. Always designate the nominee and keep policy documents accessible so that your family can make claims without delay.