The beneficial owner is the owner of the funds which will be invested in the policy. The insurance company must know who the beneficial owner of the investment is and the source of income in order to comply with anti money-laundering laws.

A classic example of beneficial ownership is when a parent wants to create a policy for a child - the child can then be the policy holder and insured person; nevertheless the parent, from whom the money came from, will have to be listed as the beneficial owner.