Often people buy life insurance coverage on their spouse naming themselves beneficiaries and policyowners.

This provides spouses with guarantee of financial security in case of one spouse’s death. It also gives the premium-paying spouse control over the maintenance of the policy and protects the policy from lapse.

A policyowner is the person who signs a life insurance contract with the insurance company. The owner of a life insurance policy has the right to name and change beneficiaries, access the cash value of the policy and borrow against the policy, terminate the policy or change the interval of premium payments.

A policyowner also has several obligations. The most important of which is the obligation to pay premiums to keep the policy in effect. If a policyowner pays premiums, she has a right to borrow against the cash value of the policy.

An insured is the person whose life is insured by the insurance company. An insured is a person upon whose death the benefits will be paid to beneficiaries. An insured may or may not be the policyowner.

If the insured is the policyowner and keeps making premium payments up until his/her death, the beneficiaries on the policy will receive life insurance benefits upon the policyowner’s death.

When an insured is not a policyowner, he/she does not have any control over the policy and cannot really make sure the policy does not lapse, because she does not pay premiums. In fact, the insured in such cases has no control over the policy whatsoever.

When a husband is a policyowner and a wife is an insured, the wife needs her husband’s consent to transfer the policy into her name, or make herself the policyowner if she wants to make any changes to the policy, such as changing beneficiaries, for example. She cannot transfer ownership to herself by virtue of being the insured.

If the wife is the insured and pays premiums, but her husband refuses to transfer ownership of the life insurance policy to her, she can simply stop paying for the policy and let it terminate. She can then purchase a new policy,  become the owner of her own policy and choose beneficiaries.

Usually, every life insurance policy has a provision about changing a policyowner. To become effective, such a change requires the present policyowner’s consent.

If the present owner does not wish to give consent to change a policyowner, you still may have a right to terminate the policy. If you are not sure about who owns the policy on your life or if you have questions about your life insurance due to an upcoming divorce, please consult with an experienced life insurance lawyer at our firm.

We have helped many individuals reach their life insurance goals and collect denied life insurance claims. At our firm, we take pride in working closely with policyowners, beneficiaries and insureds to make sure their legal rights are protected.

Call (888) 510-2212 for a free consultation.