Can I Get Life Insurance on Someone Without Them Knowing?

Getting life insurance on someone else without their knowledge may seem convenient, but it’s actually illegal. Here’s what you need to know about buying life insurance policies for other people.

Overview

• You cannot legally purchase a life insurance policy for someone else without their consent.
• The person being insured must participate in the application process by signing documents and completing a medical exam.
• To get life insurance for someone else, you must prove you have an “insurable interest” in their life. This means you rely on them financially in some way.
• It’s most common to buy policies for close family members like parents, spouses, siblings, or children.
• If you want coverage for your kids, adding a child rider to your own policy is more affordable than buying them their own plan.

Why Get Life Insurance for Someone Else?

There are a few situations where it makes good financial sense to buy life insurance for another person:

• Protecting your spouse or partner’s income. If you rely on your spouse or partner’s income, you may want a policy to replace their earnings if they pass away prematurely.

• Covering debts or assets shared with family. If you co-signed a mortgage with a sibling or loan for an adult child, life insurance can help you manage those joint financial obligations alone.

• Funding a family business. Life insurance on a business partner or key employee can help keep operations running smoothly if they die.

• Paying for funeral costs. Policies like final expense insurance can cover burial costs for a parent or other relative.

• Replacing caregiving provided by a parent. If your parent provides free childcare, eldercare, or other support, life insurance can fund paid replacement care if they’re no longer around.

Who Can You Buy Life Insurance For?

You can purchase life insurance for almost any person that you rely on financially or have shared assets with. Some common examples include:

• Spouse or domestic partner
• Minor children
• Adult children
• Parents
• Siblings
• Business partners
• Former spouses providing alimony or child support

In most cases, it’s adults buying policies to protect themselves if their parents, partners, or children pass away unexpectedly.

Requirements for Purchasing Life Insurance on Others

If you want to buy life insurance for someone else, there are a few important requirements:

Consent from the Person Being Insured

• The person getting life insurance must consent to being insured and actively participate in the application process.

• Their signature will be required on paperwork to make the policy legally valid.

• Coercion or forging signatures constitutes insurance fraud.

Proof of Insurable Interest

• You must prove your financial dependence on the person to the insurance company.

• Examples include tax documents showing you claim them as a dependent, loan statements listing you as a co-signer, or notarized affidavits stating you rely on their income.

• Random strangers cannot take out policies on each other.

Completion of Medical Underwriting

• The insured individual will need to complete an application with health and lifestyle questions.

• Most companies also require a medical exam with vitals, blood work, and measurements.

• Accurate risk assessment determines premium costs.

Without meeting these requirements, you cannot legally purchase life insurance for another person without their knowledge or consent.

Steps to Buying Life Insurance on Someone Else

If you’ve decided life insurance is right for your situation, here are the steps to purchasing a policy on someone else:

1. Discuss plans with the person you want to insure. Explain why you want the coverage and how it would benefit both of you financially. Have an open conversation to get their buy-in before starting the application.

2. Contact a licensed life insurance agent. Work with an expert to discuss your options and get quotes from multiple companies. At Policygenius, agents compare policies from over a dozen top insurers to find your best rate.

3. Gather proof of insurable interest. Your agent will advise you on any documents you need to prove financial dependence, like tax returns, property deeds, loan statements, or legal affidavits.

4. Complete the full application process together. The insured individual must participate in the medical exam and paperwork. Be prepared to answer in-depth questions about their health.

5. Make premium payments. Once approved, you’ll pay ongoing premiums to keep the policy active, while your loved one is protected.

Purchasing Policies for Children

It’s common for parents and grandparents to consider life insurance for minors in their family. However, there are more affordable policy options than purchasing a separate plan for each child:

• Add a child rider to your own policy. In most cases, a rider that costs $5-$10 per month is sufficient coverage for a child.

• ** naming your children as beneficiaries on your policy.** Your kids will inherit the payout to cover final expenses if an unexpected childhood tragedy occurs.

• Open a small whole life insurance plan. A $10,000 permanent life insurance policy can be inexpensive and provide guaranteed coverage throughout adulthood.

Purchasing an individual term or whole life policy for a child is usually overkill. Work with an agent to explore more cost-effective ways to insure minors.

Is Life Insurance on Others Worth the Investment?

Insuring loved ones can certainly provide peace of mind. But before purchasing policies, have an honest discussion about your motivations and whether the cost aligns with your budget and insurance needs.

Here are a few signs life insurance may be unnecessary or inappropriate for someone else:

• You struggle to afford premiums or take on debt to pay for policies.
• You secretly hope to profit from the death benefit payout.
• Your relationship with the person is unstable or strained.
• The insured individual expressly forbids you from buying a policy on them.
• You resent ongoing premium payments.

Think critically before assuming life insurance is right for your situation. An agent can help you review alternatives like setting up a savings account to earmark funeral funds instead.

Frequently Asked Questions

Can someone get life insurance on me without my consent?

No, it’s illegal to take out a life insurance policy on someone else without their permission and participation. Consent is required.

What if I bought life insurance on someone who died unexpectedly?

If you bought life insurance on someone who then died suddenly, the policy would only pay out if you met all requirements like consent and proof of financial interest. Otherwise, it may be void.

Is it a crime to get life insurance on a family member?

No, getting life insurance on family is legal and common as long as you meet the proper criteria. Most people buy policies on parents, spouses, or children.

Can I be listed as the owner of someone else’s life insurance?

You can be listed as the policy owner on insurance you purchase for eligible family or partners. But you cannot be the owner of a policy you didn’t apply and pay for.

What if someone refuses to let me buy life insurance on them?

If someone declines life insurance, you have to respect their wishes. You cannot purchase coverage on someone who expressly forbids it. Their consent is required.

The Takeaway

While life insurance can provide valuable income replacement and financial protection, policies must be purchased ethically and legally. Work openly with your loved ones, prove your insurable interest, and get proper consent before buying life insurance on someone else. Attempting to take out secret policies is insurance fraud. Discuss your options with a licensed agent to ensure you follow proper protocols.