A party to whom an insurance loss payment or insurance settlement may be directly paid.
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The person or company to whom an insurance company makes a payment should the insured event occur. For example, in a health insurance policy, the loss payee will likely be the policyholder if he/she becomes ill. In a life insurance policy, the loss payee is likely the policyholder's survivors.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
loss payeeA person entitled to payment from an insurance policy, even if the person is not the insured.For property insurance, the mortgage lender is usually the first loss payee and will be paid to the extent of the principal balance of its loan,with the remainder of the money to the homeowner. Lenders may waive payment if there is an insured loss and allow payment to the borrower to make repairs.In the alternative,it may accept payment and then disburse funds as repairs are made, as a method of making sure the insurance money goes back into the property.
The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.