Can Grandparents apply for life insurance against their grandchildren without consent of parents?

UPDATED: Mar 8, 2011

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UPDATED: Mar 8, 2011Fact Checked

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Asked March 8, 2011

1 Answer

The main thing that insurance companies look for in writing an insurance policy is an insurable interest for the policyholder. For example, an insurance company would not write a life insurance policy for you on the child of celebrity, but they will write policies for employers, parents, grandparents, siblings and parents/children.

Grandparents can take out a policy on their grandchild any time after the child is born, and do not require parental consent. They are the policyholder and are responsible for the premiums, and may name themselves or someone else as the beneficiary of the policy when it matures. Unless the parents are named as policyholders, they cannot cancel or change the policy in any way.

The key factor for the insurance company is whether the person purchasing the policy has something to lose if the child passes away. The loss could be generational (as in the case of a grandparent), or parental. In some cases, the loss could also be emotional, where the passing of the child would create emotional trauma. Insurance companies are in the business of risk management and will write a policy for anyone who can show that the loss of the child would create emotional, physical or financial burdens.

Answered March 8, 2011 by Anonymous

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