IPA: /ˈpɒlɪsiˌhoʊldər/
KK: /ˈpɑlɪsiˌhoʊldər/
A person or entity that owns an insurance policy and is entitled to its benefits.
As a policyholder, you have the right to file a claim for damages covered by your insurance.
Policyholder → It is formed from "policy" (from Old French *policie*, meaning a plan or contract) and "holder" (from Old English *holdan*, meaning to keep or possess). A policyholder is someone who possesses or keeps a policy, typically an insurance contract.
Think of someone who 'keeps' ('holder') a 'plan' or 'contract' ('policy') — that's what a policyholder is.
No commonly confused words.