In life insurance, what does the term "beneficiary" refer to?

In life insurance, the term "beneficiary" specifically refers to the person or entity that is designated to receive the death benefit when the insured person passes away. This distinction is crucial in the realm of life insurance as it determines who will benefit from the policy upon the insured's death.

Understanding the role of a beneficiary is fundamental to life insurance policies. The beneficiary can be an individual, such as a spouse, child, or relative; it can also be an organization, like a charity. The designation of a beneficiary can be made clearly in the policy and is critical because it ensures that the proceeds are paid out according to the policyholder's wishes.

The other options represent roles associated with the life insurance policy but do not capture the specific definition of a beneficiary. The insured person is the individual whose life is covered by the policy, the insurance company is the entity providing the insurance coverage, and the policyholder is the individual who owns the policy. While these parties are integral to the life insurance process, only the beneficiary receives the financial benefit from the policy upon the occurrence of the event insured against, which is the death of the insured individual.