Policy Setting-Up Options
A life insurance policy, dependant upon the needs of the applicants, can be set-up in different ways:
It is important that the policy is set-up correctly, as it cannot normally be subsequently changed.
Single life:
The insured person and the policy owner are one and the same.
(Person A is the insured person and Person A owns the policy.)
Life of another:
The insured person and the policy owner are different people.
(Person A is the insured person and Person B owns the policy.)
Joint Life, first death:
Two people are insured under the policy, which will pay out on the death of either of them.
(Persons A and B are both insured persons and are both policy owners. If just one of them dies, the policy proceeds are paid to the survivor of them.)
Joint Life, second death:
Two people are insured under the policy, which will not pay out until both insured persons have died.
(Persons A and B are both insured persons and are both policy owners. Upon the first death, nothing is paid out and the survivor must continue to pay the premiums. When the second person dies, the policy proceeds are paid out.)
