What does "beneficiary" refer to in an insurance policy?

The term "beneficiary" in an insurance policy specifically refers to the individual or entity that has been designated to receive benefits, such as the death benefit, upon the death of the insured. This role is critical in life insurance policies, as it ensures that the proceeds are directed to the intended party, which could be a spouse, child, trust, or another individual or organization.

In life insurance contexts, the choice of a beneficiary is an important decision, as it determines who will receive financial support during a time of loss. The designation can often be changed by the policyholder, providing flexibility in managing estate planning and financial support needs.

The other options do not accurately capture the meaning of "beneficiary." The insured individual is the person covered under the policy, while the insurance company is the entity providing the coverage. An additional coverage option pertains to features that can enhance or modify the policy but is unrelated to the designation of a beneficiary. Hence, the correct interpretation of "beneficiary" is the entity named to receive the death benefit.