The policyholder is that natural or legal person who subscribes and accepts the conditions of the insurance policy. In this way, it is obliged to pay the corresponding premium and to comply with all other commitments arising from the agreement.

The policyholder can be the same insured, who is the individual or protected entity. There may also be a coincidence with the figure of the beneficiary, who is the recipient of the compensation. However, there is the possibility that all these subjects are different.

It is worth mentioning that the person in whose name a bill of exchange (and other financial titles) is drawn is also known as a payee.

Policyholder functions

Among the functions of the policyholder are:

  • You have the ability to designate your beneficiary (ies), who will receive compensation from the insurer in the event of a claim. This decision can be changed as many times as desired, always respecting the conditions agreed in the contract.
  • You can renew the insurance, or interrupt it, stopping paying the premium. This, within the established deadlines.
  • Sign the policy contract. In the case of a legal person, this role falls on an attorney-in-fact or legal representative.
  • You can modify some conditions of the policy such as the collection address or the way in which the premiums are divided.
  • If you meet the payment of the premium, you are entitled to the redemption of the policy. This is an option of some life insurance that, after a period of contributions, allows you to collect a part (or all) of the corresponding compensation. Thus, the occurrence of the loss is not expected, that is, the death of the insured.

Examples of policyholder

We can identify the policyholder with examples in different situations

  • State health insurance: Let's look at the case of a worker who is deducted a percentage of his salary to allocate it to Social Security. Said government system provides, among other services, health coverage. Here, the policyholder is the employer, who must make the corresponding payments to the State.
  • Life insurance: The policyholder is normally the same insured person. If she dies, financial compensation will be awarded to her beneficiary (ies). The main candidates for this position are the spouse and immediate family members.
  • Property insurance: The policy covers an asset, for example, a car or a house, against different claims. The policyholder, like the beneficiary, is usually the owner.

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