Who Can Be Named As Premium Payor On Your Life Insurance Policy?

insurance payor

 

Who Can Be Named As Premium Payor On Your Life Insurance Policy?

When completing an application for term life insurance, you will come across a question that asks who the payor of the life insurance policy will be. Many customers have questions about this area and what it means. This is a good question and important to understand.

The payor on a term life insurance application is the person who will be paying the premiums for the policy. In most cases the person who is applying for the life insurance will be the person paying for it. For example If I take out a policy of my own and I’m paying for it with my own income /savings, I am the payor.

When would another person be the payor on a term life insurance policy? Another good question. One example is when a parent is applying for a whole life policy for a child who has a disability. The parent will be the payor and owner of the policy. This is because the child is a minor and has no income. It can often be a difficult decision for a parent of a child with a disability to understand all the factors involved in obtaining such a policy. The Special Needs Alliance has useful information if your family feels that is a good option to explore.


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Another example is when a son or daughter has an older parent applying for life insurance and the son or daughter wants to make the payments to help the parent. There are also situations where the payment for life insurance is paid by a business. This can sometimes be the case in business-related life insurance applications, such as a key person insurance, defined as when a business purchases the policy on the primary personnel vest in the businesses’ success. .

If the premium payor is going to be someone other than the insured/owner of the insurance policy, the insurance carrier will want to know the person’s relationship to the insured/owner and the reason they are being listed as the payor.

About the author: Dan Cody has been helping insure families for over seven years. He loves playing a variety of instruments including the guitar, bass, drums, and piano. He also supports cancer research foundations and volunteers at local pet shelters. Dan takes great care in identifying his clients’ needs so he can identify the policy that is best suited for their lifestyle. You can reach Dan at 1-800-651-1953 or DCody@Pivot.com.

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