Incidents Of Ownership

The term “incidents of ownership” might sound fancy, but all it’s really referring to is the right we have to do stuff to a life insurance policy that we own, or are otherwise in control of (like if we’re a trustee).

For example, maybe we’re getting married and want to make our new spouse the beneficiary of our life insurance policy. Or maybe we’re getting divorced and absolutely don’t want our spouse to be the beneficiary. Or maybe we want to increase or decrease the amount of the policy, cash part of it out, or cancel it altogether. Regardless of what we want to do, if we’ve got the right to do it, then it’s part of the package we call “incidents of ownership.”