Yes, you can buy life insurance on yourself. This is the most common way life insurance is purchased.
But, you don’t actually buy the coverage for yourself, you are the insured person, but the coverage provides a death benefit for someone else, for example, your spouse or child.
In order to purchase life insurance on someone you must have an insurable interest in that person.
You always have an insurable interest in yourself, and can therefore buy life insurance on your own life.
What is Insurable Interest?
Insurable Interest: Each individual has an unlimited insurable interest in his or her own life, and therefore can select anyone as a beneficiary.
What is a Beneficiary?
When you purchase a life insurance policy you’ll need to select a person (or persons) who will receive the proceeds from your policy upon your passing. The person(s) you choose are referred to as the beneficiary of your insurance.
Beneficiary: Designation by the owner of a life insurance policy indicating to whom the proceeds are to be paid upon the insured’s death. Anyone can be named a beneficiary (relative, non-relative, pet, charity, corporation, trustee, partnership).
A primary beneficiary is the first-named beneficiary, who must survive the death of the insured in order to collect the proceeds.
A contingent or secondary beneficiary will receive the proceeds if the primary beneficiary does not survive the insured.
A revocable beneficiary (primary or secondary) can be changed by the policy owner at any time.
An irrevocable beneficiary (primary or secondary) can be changed by the policy owner only with the written permission of that beneficiary.
Reasons to Buy Life Insurance for Yourself
Some of the most common reasons people buy life insurance include the following:
Naming a Beneficiary of a Life Insurance Policy
Many people buy life insurance on their own life and name one of the following as beneficiary:
Buying Life Insurance for Yourself
You can purchase life insurance on yourself.
There are several types of life insurance policies you may consider.
Types of Life Insurance – Term or Whole Life
Whole Life, Term or a combination of the two. The younger you are when you purchase coverage, the more you can buy at an affordable price.
You can purchase life insurance and name whomever you want as the beneficiary.
As for the cost of your life insurance policy, it depends on your health and what type and amount of life insurance you want.
Term Life Insurance
You can buy term life insurance which is coverage for a specific term and that is all you get. Term life is the cheapest type of life insurance policy you can buy.
Benefits of Term Insurance
Whole Life Insurance
You can also purchase some type of whole life insurance which will be more expensive but will include an investment feature in addition to the insurance coverage. Whole life provides you with protection that lasts your entire lifetime.
Benefits of Whole Life Insurance
Buying Life Insurance on Others
Although you can purchase a policy on yourself, you cannot purchase life insurance on your parents (or anyone else except your minor child) without the insured party's consent.
So, to buy life insurance on someone else, other than yourself, you need that person’s permission, and the insurer may require the person’s signature on the application for life insurance.
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