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In the realm of life insurance, certain terms can often cause confusion, especially for those who are new to the concept. Two such terms are “policyholder” and “life insured”. Although they might appear similar, they represent different roles within an insurance policy. Understanding the difference between these terms is important for anyone considering or holding a life insurance plan.
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The policyholder is the individual who owns the life insurance policy. This person is responsible for purchasing the policy and ensuring it remains active by paying the necessary premiums. The policyholder holds several important rights and responsibilities, including:
Choosing the Beneficiaries: The policyholder selects who will receive the death benefit if the life assured passes away.
Modifying the Policy: The policyholder can modify the policy, such as altering the coverage amount, updating beneficiaries, or even cancelling it.
Managing Premium Payments: The policyholder must ensure that premiums are paid on time to keep the policy in force.
Borrowing Against the Policy: If the policy has a cash value component, the policyholder can borrow against it or withdraw.
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The life assured, also known as the insured, is the individual whose life is covered by the insurance policy. The insurance company agrees to pay a death benefit to the beneficiaries if the life assured dies during the term of the policy. Key points about the life assured include:
Coverage Basis: The insurance coverage is based on the life assured. The underwriting process, including medical examinations and health assessments, focuses on the life assured.
No Direct Control: The life assured does not have control over the policy unless they are also the policyholder. If they are not the policyholder, they cannot change the policy or manage premium payments.
Benefit Entitlement: The primary role of the life assured is passive, as their death triggers the payment of the death benefit to the designated beneficiaries.
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Single Role: In many cases, the policyholder and the life assured are the same person. For example, an individual buys a term insurance policy for themselves, pays the premiums, and names their family members as beneficiaries.
Separate Roles: Sometimes, the policyholder and the life assured are different individuals. For instance, a parent (policyholder) might purchase a life insurance policy on their child (life assured). In this case, the parent manages the policy and pays the premiums, while the insurance coverage is based on the child's life.
| Parameter | Policyholder | Life assured |
| Definition | The policyholder is the one who plans and buys the policy. | The life assured is the individual who gets life coverage as per the policy |
| Objective | If a policyholder is the one who is also assured person, the beneficiary will get the entire sum assured on the death of the policyholder | The beneficiary will get the entire sum assured on the death of the life-assured individual only. |
| Role | The policyholder decides the nominee of the policy | The Life assured person might be the policyholder or may be decided by the policyholder. |
There is a small difference between a policyholder and a life-assured individual. While a policyholder is the one who plans and buys the policy and could be the life assured individual, the policyholder might also buy the policy for someone else, who in that case will be the life-assured individual.
Note: You should also check the term insurance benefits if you are planning to purchase the term insurance plan.
˜Top 5 plans based on annualized premium for bookings made on https://www.policybazaar.com in the first 6 months of FY 24-25.
Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
+Rs. 487/month (Rs.16/day) is starting price for a 1 crore term life insurance for an 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
Prices offered by the insurer are as per the approved insurance plans | #All savings and online discounts are provided by insurers as per IRDAI approved insurance plans | Standard Terms and Conditions Apply | **Tax Benefits are subject to changes in tax laws.| Policybazaar Insurance Brokers Private Limited
We will respond in the first instance within 30 minutes of the customers contacting us. 30-minute claim support service is for the purpose of giving reasonable assistance to the policyholder in pursuance of the claim. Settlement of claim (including cashless claim) is the responsibility of the insurer as per policy terms and conditions. The 30-minute claim support is subject to our operations not being impacted by a system failure or force majeure event or for reasons beyond our control. For further details, 24x7 Claims Support Helpline can be reached out at 1800-258-5881
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+Rs. 820/month is starting price for a 2 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
+Rs. 1,443/month is starting price for a 5 crore term life insurance for an (NRI) 18 year-old male, non-smoker, with no pre-existing diseases, cover upto 38 years of age.
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