Orlando Harmon
A person who has insurance is typically referred to as the insured, insured party, or policyholder. The policyholder is the person whose name the insurance policy is in, regardless of who pays for it. If the insurance covers dependents, such as family members, they are referred to as covered dependents.
| Characteristics | Values |
|---|---|
| Person who takes out a policy | Policyholder |
| Person whose name the policy is in | Policyholder |
| Person who has possession of the policy | Policyholder |
| Person who may exercise the rights and privileges in the insurance policy | Policy owner |
| Person who pays for the policy | N/A |
| Person covered by the policy | Covered party, insured, insured party, covered dependent, beneficiary, indemnitee |
| Person who receives indemnity in an insurance claim | Indemnitee, beneficiary |
| Person with a pre-existing condition | Insured person |
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What You'll Learn
Policyholder
A policyholder is a person who has possession of an insurance policy. The policyholder is the person whose name the policy is in, regardless of who pays for it. For example, a parent may have a policy that covers their child, but the parent is the policyholder. The child, in this case, is a covered dependent.
In the case of health insurance, covered dependents are those who are insured under the policyholder's plan. However, if a parent purchases a separate policy for their child, the child becomes the policyholder.
The term policyholder can apply to various types of insurance, including health, life, and auto insurance. It is important to note that the term refers specifically to the person who holds the insurance policy, not the insured party or parties.
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Insured/insured party
In insurance, the person who has insurance is typically referred to as the "insured", "insured party", or "policyholder". The insured is the person who takes out the policy and is the main user or beneficiary of the insurance coverage. They are the ones who pay the premiums to the insurance company and are entitled to the benefits and protections offered by the policy.
The term "insured" is generally used to refer to the person or entity that is covered by the insurance policy. This can include individuals, groups, or organizations that are protected against financial loss, damage, or liability by the terms of the insurance contract. Being the insured means that you are the primary beneficiary of the insurance policy and are entitled to make claims and receive compensation in the event of a covered loss.
The term "insured party" is often used interchangeably with "insured" and refers to the person or entity that is covered by the insurance policy. This term emphasizes that the insured is a participant in the insurance agreement and has certain rights and obligations under the policy. The insured party is typically the main focus of the insurance policy and is the one who is protected from financial risk.
In some cases, there may be multiple insured parties under a single policy, such as in family or group insurance plans. Each insured party has the same rights and protections under the policy, regardless of who pays the premiums. It is important to distinguish the insured party from other roles in the insurance agreement, such as the policyholder or the beneficiary.
A "policyholder", or "policy owner", on the other hand, is the person who possesses the insurance policy. They are typically the ones who purchase the policy and are responsible for maintaining it. The policyholder may or may not be the same person as the insured party, depending on the situation. For example, in health insurance, the policyholder may be the parent or guardian of the insured party, who is covered as a dependent. In other cases, such as auto insurance, the policyholder and the insured party may be the same person.
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Covered dependent
A "covered dependent" is a term used in health insurance to describe an individual who is covered by an insurance policy taken out by someone else. The person who takes out the policy is known as the policyholder, and they are typically the primary insured party. However, the policyholder is not always the insured party; in some cases, they may purchase insurance for others, making those individuals the insured parties.
In the context of health insurance, a covered dependent is typically a family member of the policyholder, such as a spouse or a child. For example, if a parent has a health insurance plan and their children are also insured under that plan, the children are considered covered dependents. The parent is the policyholder and the primary insured party, while the children are the covered dependents.
It is important to distinguish between the policyholder and the insured party, as they can be different individuals. The policyholder is the person who purchases the insurance policy, while the insured party is the person who is covered by the policy and can make claims or receive benefits. In some cases, the policyholder and the insured party may be the same person, but this is not always the case.
The term "covered dependent" is specific to health insurance and does not apply to other types of insurance, such as car insurance. In car insurance, additional covered parties are typically referred to as "other drivers" or "listed drivers." These individuals are covered by the policy but are not considered dependents in the same way as in health insurance.
It is worth noting that the terminology can vary slightly depending on the specific insurance company and the type of insurance plan. Some policies may use different terms to describe the individuals covered by the policy. However, the concept of a covered dependent remains consistent, referring to an individual who is insured under a policy taken out by someone else, typically a family member or spouse.
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Indemnitees/beneficiaries
Indemnitees and beneficiaries are terms used in insurance to refer to those who receive benefits from an insurance policy without being the policyholder. The policyholder is the person whose name the policy is in and who possesses the policy. They are often the person paying for the policy, but this is not always the case.
Indemnitees are those who receive indemnity in an insurance claim. They are also referred to as the beneficiaries of the policy. For example, if a parent has a health insurance plan and their children are insured under that plan, the children are considered indemnitees or beneficiaries. In this scenario, the parent is the policyholder, and the children are covered dependents.
Covered dependents are those who are covered by an insurance policy but are not the policyholders themselves. They are named in the policy contract and receive the benefits of the policy, but they are not responsible for paying the premiums or possessing the policy documents. Covered dependents are typically family members of the policyholder, such as spouses or children, but they can also be other individuals who are financially dependent on the policyholder.
It is important to note that the terms "indemnitee" and "beneficiary" are not interchangeable with "policyholder." The policyholder is the person who owns and is primarily responsible for the insurance policy, while indemnitees and beneficiaries are those who receive the benefits of the policy without necessarily having any ownership or responsibility for it.
In some cases, a person can be both a policyholder and an indemnitee or beneficiary. For example, if an individual has their own health insurance policy and is also covered under their spouse's policy, they would be the policyholder of their own policy and an indemnitee or beneficiary of their spouse's policy.
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Insurable interest
The term "insured", "insured party", or "policyholder" is used to refer to a person who has insurance. A "covered dependent" is someone who is covered by another person's insurance plan.
Now, insurable interest refers to the right of property to be insured. It is a type of investment that protects anything subject to financial loss. It is an economic stake in something that, if damaged, destroyed, or lost, would result in financial loss. Insurable interest is the basis of all insurance policies, linking the insured and the owner of the policy. It is a prerequisite for the purchase of insurance, distancing the insurance business from gambling.
In a life insurance policy, insurable interest is the emotional, legal, and financial interest a person has in a life insurance policyholder. For instance, if you are the primary earner in your family, your partner or dependent children may have an insurable interest in you. This is because they could experience significant financial turmoil without your income. Similarly, a business may have an insurable interest in a star, franchise quarterback, or a C-suite officer.
In the United Kingdom, legislation has been passed that prohibits insurance contracts if no insurable interest can be proven.
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Frequently asked questions
A person who has insurance is called an insured, insured party, or policyholder.
The insured is anyone covered by an insurance policy, whereas the policyholder is the person whose name the policy is in.
Yes, if a person takes out an insurance policy for themselves, they are both the insured and the policyholder.
Yes, a policy can cover multiple insureds or covered dependents, such as family members under a health insurance policy.
Yes, there can be co-policy holders under the same policy.
