Difference Between Proposer and Insured in Life Insurance Policy

Who Is a Proposer in Life Insurance Policy?

Who Is An Insured in Life Insurance Policy?

What Are the Difference Between a Proposer and Insured?

Following are some of the notable differences between the proposer and the insured.

Proposer in Life Insurance

Insured in Life Insurance

Has liability to make premium payments. It covers the insurance policy against the person for whom it’s taken

Is covered by the insurance taken by proposer

Should have a source of income

Not necessary to have an income source

Doesn’t get any benefits on untimely demise. They also have the ability to avail tax or maturity benefits.

On the proposer's demise, ownership of the policy might go to other person as long as the premiums are paid on time. However, insured can get maturity benefits if they cover the policy term.

Can be their own nominee if they opt for self-insurance

On their demise, the money goes to the nominees chosen in prior.

What Are the Other Terms to Remember When Getting An Insurance Policy?

FAQs About the Difference Between a Proposer and Insured

Can I make my 15-year-old son a beneficiary?

A policyholder can choose one or more than one beneficiaries but there are certain restrictions. This is not always applicable for some group policies. If the beneficiary is a minor below the age of 18, then the policyholder remains the owner of the insurance until the child reaches an eligible age.

Can there be more than one insured?

Yes. A policyholder can take insurance on more than one person. In this regard, you must understand how you will split the money among them and inform the insurer.

When do I claim insurance after the policyholder’s death?

In situations like this, it is better to inform insurer as soon as possible. There is no time limit when it comes to this. However, many institutions keep a window of 30 days open. It is better to know about these beforehand to avoid any possible future disruptions.

Q4. What will happen if I don’t give a beneficiary name?

Insurer will consider giving premium amount to proposer’s legal heir if there is no beneficiary. If there is no heir, then insurer will follow legal procedure to determine to whom to give the money. You can also opt to give the money to charity if you can’t decide on a beneficiary or do not have any.