Can you buy life insurance on someone else?

You can buy life insurance on someone else, but you must have that person’s permission. You can purchase a life insurance policy on a family member, a romantic partner, or a business partner. It needs to be someone you know and not a mere acquaintance or a stranger. You also are not allowed to buy a life insurance policy on someone else without their knowledge. In most cases, legitimate life insurance companies need to talk to the person whose name is on the policy.

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Natasha McLachlan is a writer who currently lives in Southern California. She is an alumna of California College of the Arts, where she obtained her B.A. in Writing and Literature. Her current work revolves around insurance guides and informational articles. She truly enjoys helping others learn more about everyday, practical matters through her work.

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Laura Walker graduated college with a BS in Criminal Justice with a minor in Political Science. She married her husband and began working in the family insurance business in 2005. She became a licensed agent and wrote P&C business focusing on personal lines insurance for 10 years. Laura serviced existing business and wrote new business. She now uses her insurance background to help educate...

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Reviewed by Laura Walker
Former Licensed Agent

UPDATED: Sep 3, 2021

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The Rundown

  • Can you buy affordable life insurance on someone else? You can, but you need to get that person’s permission
  • There are many legitimate reasons to buy life insurance on another person, including using life insurance benefits to protect against losses
  • In most cases, it is unlikely that you can buy a life insurance policy on someone else without them knowing

Can you buy life insurance on someone else? Specifically, can you buy life insurance on your parents or anyone else you know? The short answer is yes. However, you will need to prove an “insurable interest” during the underwriting process.

There are legitimate reasons why you may want to buy a life insurance policy on another person, but you must do it legally. For starters, you must get that person’s permission if they are an adult. Otherwise, that can be a fraud case.

Read on to know more about buying a life insurance policy on someone else and if someone can take one out on you. To look at rates from top insurance companies in your area, you can enter your ZIP code into our free quote tool above.

Who would want to purchase life insurance on another person?

People who may want a legitimate reason to take out a life insurance policy on someone else include parents, other adult relatives, an adult with aging parents, romantic partners, business partners, and people who co-sign loans.

Buy Life Insurance as a Parent, Grandparent, Aunt, or Uncle

When someone takes out a child life policy — which is most likely a whole life policy — the adult does not stand to benefit. Instead, the child is the one who benefits when they come of age (they turn 18 or older).

Parents can more easily take out life insurance policies on their children, but the parents can permit grandparents or other adult relatives to do the same.

In any case, the insurance company needs a child’s Social Security number and proof that the child named on the policy is reasonably healthy.

Buy Life Insurance as Someone With Aging Parents

Grown children may want to buy life insurance policies for their parents to cover expenses. In most cases, the children will purchase final expense life insurance, which pays for funeral and burial expenses.

In other cases, the children may need to know whether their deceased parents had life insurance policies. There are numerous ways to find that out, and the Insurance Information Institute lists 12. One thing to do is to search insurance-related documents.

If you need to find out if your parents had life insurance policies, you can ask an insurance company directly. However, you will need to provide documentation to prove a claim.

Alternatively, if you have a deceased parent, you can visit the National Association of Insurance Commissioners to locate a life insurance policy. You will need to sign up, however. Another website that can help you is the National Association of Unclaimed Property Administrators.

Buy Life Insurance as a Spouse or Domestic Partner

It is easier for spouses to prove a relationship and insurable interest. Domestic partners may need to answer more questions and provide more information during the underwriting process.

Either couple may have separate policies, but married couples often choose to have joint policies.

In any case, things can get tricky if there is a divorce/split. It can be hard to remove an ex as a beneficiary or to cancel the policy. However, some companies may allow former couples to convert their joint policies into two separate ones.

Buy Life Insurance as a Former Romantic Partner

You might want to have a life insurance policy on your ex-spouse or ex-lover if they owe you alimony or child support.

In many cases, ex-spouses purchase life insurance policies on their own lives under the order of a court. Their exes or a trust for the children are to serve as beneficiaries.

Buy Life Insurance as a Business Partner

If you are in a partnership or other small business, you may want to purchase life insurance policies in a buy-sell agreement.

Some businesses have buy-sell agreements, in which each partner or the business itself buys life insurance policies on each member. If one partner dies, quits, retires, or otherwise cannot continue with the company, their life insurance policy will fund the sale of their shares.

Buy Life Insurance as a Co-Signer of a Loan

If you co-sign a loan, you may need to buy a life insurance policy on the borrower. In this case, you are the beneficiary of the policy. The life insurance policy may protect you from any losses should the borrower die before they can pay off the loan in full.

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Why should you get another person’s or a parent’s permission before taking out a loan on another adult or a child?

It’s not only the best insurance companies that make you get permission to take out a life insurance policy on someone else. Secretly taking out a life insurance policy on another person is likely an act of fraud, which can bring fines and prison time.

Whenever you take out an insurance policy, everything should be above board and you need to have a legitimate reason. Insurance companies want to protect their interests, and making false claims or forging policies poses a risk for those companies.

We hope that we have thoroughly answered the question, “Can you buy life insurance on someone else?” To see quotes from top insurance companies in your area, enter your ZIP code into our free quote tool below.

Can you buy life insurance on someone else? Frequently Asked Questions

Here are some answers to a couple of questions that you may have on this subject:

#1 – Can you buy life insurance on someone else without them knowing?

And can someone do the same thing to you? While it’s not impossible, the application should be rejected immediately — in most cases.

However, there can be rare cases when parents or other adult relatives take out life insurance policies on children and forget or otherwise fail to tell the children about them.

There was a time when businesses would secretly take out life insurance policies on their employees. However, after some controversy, that practice ended in 2006.

Beyond the above situations, clandestine life insurance policies are unlikely, since legitimate life insurance companies have a stringent underwriting process.

If you want to take out a life insurance policy on another person, you and that person must be present in the underwriting process.

As part of the application process for a life insurance policy, this is what happens:

First, the insurance company needs to determine an “insurable interest.” In other words, you can prove your relationship to the person whose name is on the policy and that you will suffer financial hardship if they die.

Second, the person whose name is on the policy needs to sign the application. That person must also allow the insurance company to collect personal information, like driving, occupational, and health records.

Third, the person whose name is on the application may need to take a medical examination. Some companies may allow applicants to forego this process if they are applying for term life insurance. However, permanent life insurance policies generally require medical exams.

In most cases, you will be working with a permanent life insurance policy (particularly, a whole life insurance policy). You can borrow against that because it has living benefits. You also have the option of surrendering the policy for cash.

#2 – Can someone else pay my life insurance premiums?

Yes, in some cases.

If someone wants to have control over the policy, they need to have your permission. If you have an agreement with that other person, they can receive periodic statements. They will also be responsible for making monthly or annual payments to the life insurance company.

The person who controls your policy will also have the authority to name the beneficiary. For instance, they can be the beneficiary. Additionally, that person can also borrow against the policy or surrender it for cash.

Of course, the reverse is also true.

#3 – Which life insurance company allows you to buy life insurance on someone else?

There isn’t just one company that allows it. Most will, if you have a legitimate reason. For example, companies like Assurity and Lincoln Mutual let parents purchase life insurance policies for their children. Also, Nationwide advertises life insurance policies to fund buy-sell agreements.

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