A policy holder is the individual or entity that owns an insurance contract and maintains complete control over its terms, benefits, and modifications. In my work with the infinite banking system, the policy holder is the person who owns the participating whole life insurance policy and has the authority to access cash value, take policy loans, and designate beneficiaries. This ownership position is foundational because it grants you the control necessary to become your own banker. According to the Financial Consumer Agency of Canada, the policy holder is usually the person who owns the insurance policy and enters into a legal contract with the insurance company.
A policy holder owns and controls the life insurance policy, the life insured (or named insured) is the person whose life is covered under the policy, and the beneficiary receives the death benefit proceeds upon the passing of the life insured. In many whole life insurance policies I design for clients, the policy holder and life insured are the same person, which provides maximum control for infinite banking strategies. The beneficiary designation remains separate and can be changed by the policy holder at any time unless designated as irrevocable. Some policies may also include an additional insured or allow coverage extensions to a distant relative depending on the policyholder’s selection and underwriting requirements. According to PolicyMe, 22 million Canadians have life insurance coverage, with 83% choosing individual policies that allow for personalized control over their financial planning.
A policy holder can own multiple insurance policies simultaneously across various coverage types including life, health, property, renters insurance, and automobile coverage. In my practice, I often structure multiple participating whole life policies for clients to maximize their infinite banking system, creating separate policies for different financial goals such as retirement funding, real estate investment, or legacy planning. Each policy operates independently through different insurance companies and provides its own cash value growth and borrowing capacity. Insurance professionals and insurance advisors can help determine appropriate policy limits and coverage limits for each policy based on your financial situation.
A person can become a policy holder at age 18 in six Canadian provinces including Alberta, Manitoba, Ontario, Prince Edward Island, Quebec, and Saskatchewan, or at age 19 in British Columbia, New Brunswick, Newfoundland and Labrador, Nova Scotia, and the three territories. I regularly work with young professionals who want to start building their infinite banking systems early, capitalizing on lower insurance premiums and decades of compound growth while managing longevity risk. The age of majority determines when someone can legally enter binding insurance contracts. Insurance providers may require medical tests for larger sum assured amounts, and our online quote tool helps determine preliminary rates. According to Savvy New Canadians, in six Canadian provinces the age of majority is 18, while in British Columbia and the three Canadian territories the age of majority is 19.
A minor cannot serve as a policy holder in Canadian jurisdictions because insurance contracts are legally binding agreements that require the party to have reached the age of majority in their province or territory. In my practice, parents often establish whole life insurance policies for their children where the parent serves as policy holder until the child reaches adulthood, at which point ownership can be transferred. This strategy allows families to lock in insurability and build cash value for their children’s future, protecting against longevity risk while establishing capital funds for future use. The policy premium remains level throughout the policy term, making long-term planning predictable. According to information from the First Nations Child and Family Services Settlement, anyone younger than the age of majority in their province or territory is considered a minor and cannot enter binding contracts.
A policy holder has the right to modify coverage, cancel the policy, designate beneficiaries, access cash value, take policy loans, and make withdrawals according to payment terms outlined in the insurance contract. In infinite banking, these rights are what give you financial control and allow you to function as your own banker, accessing your capital without credit checks or approval processes. Insurance policyholders also have the right to receive dividends from participating policies, review technical provisions in all policy documentation, and access terminal illness benefits if diagnosed with a qualifying condition. Your insurance provider must honor comprehensive coverage as outlined in your policy, and you have recourse through the Financial Review Board if disputes arise. According to the Canadian Life and Health Insurance Association guidelines, insurers provide a 10-day free look period for purchasers of individual life insurance contracts to review the policy and cancel for a full refund if not satisfied.
A policy holder must make premium payments on time, provide accurate information on applications, notify the insurance provider of material changes, and comply with all policy terms and conditions. In my work teaching the infinite banking concept, I emphasize that consistent premium payments are critical because they fund your cash value growth and maintain your ability to borrow against your policy while keeping the insurance industry’s loss ratios balanced. Policy holders must also understand their policy deductible obligations and take responsibility for filing a claim promptly with complete and accurate details when necessary. Understanding liability coverage, personal liability insurance, and Personal Injury Protection provisions in your policy is essential, as is managing accounts receivable if you’re using your policy for business financing purposes. Insurance companies track these elements carefully through their technical provisions and capital funds management. According to the Insurance Bureau of Canada Code of Consumer Rights and Responsibilities, policy holders are required to provide all relevant information in their application and must promptly inform their insurance company of any change in circumstances.
A business or organization can absolutely serve as a policy holder for various commercial insurance policies including liability insurance, property damage coverage, and key person life insurance. I work extensively with business owners and entrepreneurs who use corporate-owned life insurance as part of their infinite banking strategy, providing liquidity for business opportunities while building tax-advantaged wealth. Corporations operating in international trade often need specialized coverage for nonpayment risk and political risks when expanding beyond domestic markets, requiring careful assessment of payment risks and appropriate coverage types. Professional practices regularly leverage policy ownership for financial control, with insurance professionals helping determine the appropriate policy limit for liability coverage based on accounts receivable and business operations. According to Made in CA, the insurance industry in Canada employs around 166,000 people and serves over 150 insurance providers, with businesses representing a significant portion of the market through commercial insurance policies.
What’s the difference between a primary and joint policy holder?
A primary policy holder has sole ownership and complete control of an insurance policy, while joint policy holders share equal ownership rights, decision-making authority, and premium payment responsibilities under agreed payment terms. I often structure joint policies for married couples building their infinite banking systems together, where both spouses have access to the cash value and borrowing capacity while sharing the death benefit protection and sum assured obligations. Joint ownership requires consensus on major policy changes including the policy term and coverage limits, whereas primary policy holders act independently when managing their policy deductible selections and filing a claim for benefits. Both arrangements provide comprehensive coverage and personal liability insurance, with insurance advisors helping determine which structure best serves your financial goals in today’s complex insurance system. According to the Government of Canada, joint first-to-die term insurance covers both partners under the same policy with the same coverage, and is usually less expensive than two identical single policies.
