In a life insurance policy, who is known as the beneficiary?

The beneficiary in a life insurance policy is defined as the individual entitled to receive the death benefit payout when the insured person passes away. This is a crucial element of life insurance, as it ensures that the financial support or compensation intended by the policyholder is directed to the right person or entity.

Choosing the beneficiary is a significant decision for the policyholder, as it can have substantial implications for financial planning and legacy. The beneficiary can be a family member, friend, charity, or any other entity specified by the policyholder at the time of setting up the insurance. This term is essential to understand in the context of life insurance policies, as it delineates who benefits from the policy.

In relation to the other answer choices, the insurance company receiving the premiums does not have a claim to the payout; their role is to manage the policy and fulfill the payment when the condition of the policy is met. The agent selling the insurance policy acts as an intermediary, and the policyholder, while crucial to the contract, will not receive the payout themselves; instead, the beneficial intent lies with the nominee or beneficiary designated in the policy.