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A policyholder in life insurance is the person who buys a policy, pays the premium, and legally owns the policy. They have the authority to make changes to the policy, name or change nominees, and even cancel or assign the policy to someone else.
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What Does a Policyholder Do?Who Can Be a Policyholder?Real-Life Example ScenariosPolicyholder vs Life Assured vs NomineeConclusionFAQs Let’s understand what exactly a policyholder does and why their role is so important:
Responsibilities of the Policyholder
-Paying the premium regularly.
-Providing correct information.
-Keeping nomination details up to date.
-Handling policy servicing like changes, assignments, or claims.
Rights of a Policyholder
-Change the nominee.
-Assign the policy to another person or a lender, e.g., for a loan.
-Surrender or cancel the policy.
-Take loans, if allowed under the plan.
-Receive maturity benefits if they’re also the life-assured or named beneficiary.
Anyone who:
Has an insurable interest in the life of the person being insured (if they are not insuring themselves). Examples include:
Let’s break down some common situations to help you understand how the roles play out in real life.
Ravi, 35, buys a term insurance plan for ₹1 crore and names his wife Sneha as the nominee.
If Ravi dies during the term, Sneha will receive ₹1 crore. If he survives, there is no payout as it’s a term plan.
Meena buys a child plan for her 8-year-old son Aarav to save for his higher education.
Note: In child plans, the parent is usually both the policyholder and life assured, while the child is the beneficiary.
Ajay bought a policy before marriage and named his mother as the nominee. After marriage, he wants to change it to his wife.
Ajay, as the policyholder, has the right to change the nominee at any time during the policy term.
These three roles have distinct purposes in life insurance. Let’s understand them
| Policyholder | Life Assured | Nominee |
| A person who buys and owns the life insurance policy | A person whose life is covered by the policy | A person who receives the money if the life assured passes away |
| Pays premiums, manages the policy, and appoints the nominee | Covered under the risk of the insurance policy | No legal rights until the claim event occurs |
| Can receive maturity benefits; living benefits if applicable | Receives benefits only if also the policyholder | Receives death benefits if the life assured passes away during the policy term |
| Can claim tax benefits if they pay the premium | Can claim tax benefits only if they also pay the premium | Cannot claim tax benefit |
The policyholder is the backbone of any life insurance contract. They pay the premiums and legally own the policy. While the life assured may be the one whose life is insured, the policyholder is the one who manages all the crucial responsibilities, from premium payments to nominee choices to policy management.
Written by
Neviya Laishram
Senior Editor – Health, Life and Group Health Insurance Content at ACKO
With a journalism background, she brings 9 years of experience in strategising and editing health, life, and group health insurance content. Having written for magazines and digital publications, she combines research and editorial expertise to create credible, useful content for readers.
Reviewed by
Vaibhav Kumar Kaushik
Senior Director – Life Insurance Strategy
Senior Director – Life Insurance Strategy at Acko, I drive customer-centric, digitally led strategies that shape the future of Life insurance. With expertise in new business development, D2C growth, and investment management, I’ve helped build and scale Acko’s Term Life offerings by aligning customer insights with innovative product strategy to fuel sustainable growth.
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