If I purchase a life insurance policy for my adult kids in Penna am I the actual owner of the policy?What rights do I have as the owner?
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UPDATED: Jun 5, 2010
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Insurance Question from Horsham, PA
Asked on 06/05/2010
If I purchase a life insurance policy for my adult kids in Penna am I the actual owner of the policy?What rights do I have as the owner? If I purchase a life insurance policy for my adult kids in Penna am I the actual owner of the policy?What rights do I have as the owner?
Answer given on June 10, 2010
Typically, the insured person is the owner of the policy. Paying for it, per se, does not make you the owner of the policy. Basically, the owner controls what happens with the policy, without the consent from any other party. The owner of the policy gets to decide who the beneficiary will be, make any changes to the policy, borrow money from the cash value of the policy, choose a cettlement option for the policy, and change onwership of the policy in the future. Since your children are not minors, I would venture to say that they are the owners of their respective policies, unless this was decided differently at the time you took out the policies.
You can pay for life insurance policy on another person and not own it, just as if you could buy them a car. Now, what type of insurance you buy and how you pay for it are all up to you. If you decide to pay it all up front ( paid in full ), they would own the policy outright. If you made the initial payment to get it started, then continued to pay monthly premiums on it, they would still own the policy.
There are other circumstances where the insured is not the owner ( such as in a business relationship ) but I don’t think that’s the case you are describing above.
Hope this helps.
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