Contingent policyholder

The role matters when the policyholder and the life insured are different people, for example where one spouse holds a policy on the other's life, or a parent holds a policy on an adult child. If the policyholder dies first, the policy stays in force on the life insured, and the contingent policyholder takes it over with the rights to the cash value, loans and beneficiary nominations. Some insurers call the role successor owner or contingent owner.

Where no contingent policyholder is named, the policy forms part of the policyholder's estate and passes under their will or local succession law, which can mean probate. Where an offshore trust or company is the policyholder, continuity comes from the structure: the trust or company carries on, and new trustees or directors take over; see policy held in trust. The same applies to a PPLI structure held through a trust, foundation or company, and a PPLI structure held by an individual can carry the same nomination where the insurer offers it.