Insurance Broker Certification Practice Exam

Who may or may not be the policy owner in an insurance arrangement?

1. The agent

2. The insured

3. The applicant

4. The insurer

The correct answer is: The insured

In an insurance arrangement, the policy owner is the individual or entity that has control over the policy, including the rights to make changes, receive benefits, and cancel the policy. The insured is the person whose life, health, or property is covered by the insurance policy but may not necessarily be the policy owner. For instance, a parent may purchase a life insurance policy for their child, making themselves the policy owner while the child is the insured. Therefore, the insured may not be the policy owner in this scenario. The relationship dynamics can vary, with the policy owner having particular privileges concerning the policy, regardless of whether they are the insured party. This distinction illustrates the flexibility and diversity within insurance agreements, as different parties may have designated roles based on specific arrangements.