Regarding third-party ownership of a life insurance policy, which statement is true?

In third-party ownership of a life insurance policy, it is indeed the case that the insured typically has no rights in the policy. This means that the individual whose life is insured does not have the ability to control the policy, including making changes such as designating beneficiaries or accessing any cash value. The rights associated with the policy lie entirely with the third-party owner, who is usually the one paying the premiums and making decisions regarding the policy’s benefits.

This structure is common in various situations like employer-sponsored life insurance or policies taken out by one spouse on the life of the other. Such arrangements emphasize the dynamics between ownership and rights inherent in insurance policies, making it crucial for individuals to understand the implications of third-party ownership. In contrast, the other statements inaccurately suggest different levels of rights and access for the insured, which is not consistent with the concept of third-party ownership.