Which of the following entities is considered the Principal?

In the context of life insurance, the Principal typically refers to the insurer, which is the party that agrees to provide the insurance coverage and pay out the benefits upon the occurrence of the insured event, such as death. The insurer has the responsibility of underwriting the risk and managing the policy terms, which includes setting premiums and determining the eligibility of applicants.

While the policyholder is the individual who purchases the insurance policy and pays the premiums, they do not hold the primary responsibility for the terms of the contract, making them a party within the overall structure rather than the principal entity. The beneficiary is the person designated to receive the death benefit when an insured individual passes away, and the underwriter assesses risk and determines policy terms, but neither of these roles represents the principal party in the contractual relationship of the insurance itself.

Thus, identifying the insurer as the Principal highlights their crucial role in the life insurance framework, ensuring that they uphold their obligations to policyholders and beneficiaries alike.