In a Third-Party Ownership arrangement, who owns the policy?

In a Third-Party Ownership arrangement, who owns the policy?

• A. The insured
• B. The insurer
• C. The beneficiary
• D. The owner is a person other than the insured

Answer: (D)

Ownership is about who controls the policy and has the rights to it. In a third-party ownership arrangement, the policy is owned by someone other than the person whose life is insured. That owner has the authority to pay premiums, name or change the beneficiary, borrow against cash value (if there is any), and even cancel or surrender the policy. The insured is the person whose life is covered, but they do not control the policy in this setup. The beneficiary is the person or entity designated to receive the death benefit, which is not the same as owning the policy. The insurer isn’t the owner either—they issue the policy. So, the correct understanding is that the owner is a person other than the insured.

Ownership is about who controls the policy and has the rights to it. In a third-party ownership arrangement, the policy is owned by someone other than the person whose life is insured. That owner has the authority to pay premiums, name or change the beneficiary, borrow against cash value (if there is any), and even cancel or surrender the policy. The insured is the person whose life is covered, but they do not control the policy in this setup. The beneficiary is the person or entity designated to receive the death benefit, which is not the same as owning the policy. The insurer isn’t the owner either—they issue the policy. So, the correct understanding is that the owner is a person other than the insured.