Who should be the owner of a life insurance policy?
That is, the insured party should not be the owner of the policy, but rather, the beneficiary should purchase and own the policy. If your beneficiary (such as your spouse or children) purchases the policy and pays the premiums, the death benefit should not be included in your federal estate. What does it mean to be owner of a life insurance policy?
What happens if the owner of a life insurance policy dies?
A life insurance policy is no different. If the owner and the insured are two different people and the owner dies first, the policy ownership has to pass to a successor owner until the death of the insured results in the proceeds being paid to a beneficiary. What happens if the policy holder dies?
Can the owner of a permanent life insurance policy change?
The owner is not necessarily the same person as the insured person, and while the owner of a policy may change, the insured person can never change. Importantly, the owner of a permanent life insurance policy can also claim the policy as an asset on their personal balance sheet.