Can you buy life insurance for someone else?

Can you buy life insurance for someone else? Purchasing a policy for another person is legal as long as you have their consent and can prove insurable interest. There will be no opportunity for a secret life insurance policy, at least within the confines of the law.

Below, learn what stipulations you must follow when comparing life insurance quotes for someone else, how to purchase an individual policy legally, and who you can take a life insurance policy out on.

From parents to spouses to children, you can find the best life insurance company for someone else by entering your ZIP code into our free quote tool above.

Can you buy life insurance for someone else?

To legally seek out life insurance rates for someone else, you must prove insurable interest, and you have their consent.

It doesn’t matter if you are planning on covering the policy premium payment yourself.

Proving insurable interest means showing that you’re financially dependent on the person for whom you’re buying the policy. If that person dies, you will experience financial loss or hardships.

Spouses and parents can sometimes purchase life insurance policies for one another without proving insurable interest. But business partners or other relationships will need the proper documentation.

Can you get a life insurance policy on someone without them knowing? No, you need the person’s consent to complete the life insurance application process.

Many whole and term life insurance policies require the policy owner to take a medical examination and answer personal questions.

You’ll need their cooperation to complete these steps appropriately. They also need to sign the final documents and paperwork.

Failing to follow these guidelines puts you at risk of committing insurance fraud.

According to the Insurance Information Institute (III), it’s a crime to commit insurance fraud in all 50 states.

The consequences for committing life insurance fraud include jail time, lengthy prison sentences, and hefty fines.

Read more:

• What is insurable interest?
• What is life insurance fraud?

How do you buy life insurance for someone else?

When buying life insurance for someone else, be sure you answer every part of the application accurately and honestly on their behalf. (For more information, read our “How to Buy Life Insurance: Expert Guide“).

You’ll need details about their medical history and status, as well as other personal information. A medical exam may also be required, depending on what type of policy you pursue.

You can only buy enough life insurance coverage to account for the level of insurable interest you proved.

For an elderly parent, the financial necessity often only includes funeral costs or burial costs, and other end-of-life expenses.

However, if you try to take out a term policy on your parent with a $1,000,000 death benefit, you might raise some red flags.

If you’re buying life insurance for someone else, taking the time to choose the right company will be important. You will want to save as much as you can for the cost of life insurance. Some insurance providers that sell final expense and burial insurance include:

• Baltimore Life Final Expense Insurance
• Liberty Bankers Life Final Expense Insurance
• Prosperity Life Insurance and Final Expense
• Sagicor Life Final Expense Insurance
• Security National Life Insurance
• Settlers Life Insurance
• United Home Life Insurance and Final Expense
• Settlers Life Insurance Review & Complaints: Final Expense Insurance
• Burial Insurance: Understanding Insurance for Final Expenses

By buying a policy for someone else and granting yourself a beneficiary designation, you gain more control.

You’ll receive the premium statements and have authority over changing or naming the primary beneficiary. You can also surrender or take out loans against the policy as needed.

Can you buy life insurance on anyone?

Can you take out a life insurance policy on anyone? Technically, you can’t take out life insurance on a stranger.

However, with their consent, you can take out a policy on any person you depend on for financial support.

Typical scenarios include adult children, an elderly parent, siblings, spouses or partners, business partners, or essential employees.

If you co-sign a loan for someone, as often happens with adult children, taking out a life insurance policy on them can ensure you have the means to pay off those loans if something were to happen to them. (For more information, read our “Life Insurance Guide for Adult Children“).

Apply the same logic to co-signing car loans and mortgages.

Similarly, if you take out life insurance on your business partner, the death benefit goes towards keeping the business afloat after their passing.

Taking out an insurance policy on a valuable employee works the same way.

Ultimately, any person you depend on for financial support, you can take a life insurance policy out on.

Case Studies: Buying Life Insurance for Someone Else

Case Study 1: John and Mary’s Spousal Policy

John and Mary are a married couple who rely on each other financially. They decide to purchase a life insurance policy for each other to ensure financial security in case one of them passes away. They compare life insurance quotes online and find a suitable policy that meets their needs and budget.

Case Study 2: Parent-Child Policy

Sarah is an adult child who co-signed a loan with her elderly mother, Susan. To protect herself from potential financial burdens, Sarah decides to take out a life insurance policy on her mother. She gathers the necessary documentation, including proof of insurable interest, and obtains her mother’s consent to proceed with the policy.

Case Study 3: Business Partners’ Coverage

Mike and James are business partners who heavily rely on each other’s contributions to their company’s success. They recognize the importance of having a backup plan in case one of them passes away unexpectedly. As a result, they purchase life insurance policies on each other, with the death benefit going towards keeping the business afloat.

Buying Life Insurance for Someone Else: The Bottom Line

Can you take out life insurance on anyone? As long as you have their expressed consent and cooperation and financially depend on them, the answer is yes.

Find the best life insurance rates for yourself or a loved one by shopping around and comparing policies from multiple companies online.

Compare affordable life insurance rates for someone else or yourself by entering your ZIP code into our free quote tool below.