If You are Considering the Purchase of a Life Insurance Policy You May be Wondering If You Can Insure Anyone?
You can't take out a life insurance policy on just anyone. You need to have the individual's permission (you can't get a policy on someone without them knowing they are being insured), and you must be able to show Insurable Interest, which is proof that you will suffer a financial loss or cost if they die.
The insurance company may require that the person you wish to insure for life insurance sign the application, verifying permission to insure the person.
What is Insurable Interest?
Insurable interest means the person who wishes to insure your life would experience a financial hardship or loss upon your death.
For Example: If someone relies on you for financial support, or someone would be responsible to pay for your final expenses (burial and funeral costs), that person would have an insurable interest in your life.
NOTE: Insurable interest must exist at the time the life insurance policy is purchased. However, for a life insurance policy, insurable interest is not required at the time of death of the insured person.
Example: - A man may insure the life of the woman he is engaged to.
Can You Get Life Insurance on Anyone You Have an Insurable Interest In?
You can obtain life insurance on anyone with whom you have an insurable interest. There must be an insurable interest for you to take out life insurance on another person. One way to determine insurable interest is whether you rely on that person for some means of financial support.
Life Insurance Policy Insured
A life insurance policy is a contract between an insurance company and an individual. The insurance policy usually insures the person who bought it, but it can insure someone else as well, such as a child or a business partner. When the insured person dies, the policy pays out a predetermined amount of money (death benefit) to the policyholder’s beneficiary.
Who Can You Insure for Life Insurance?
Yes, you may be able to buy life insurance on a person who is not your child or spouse.
You can buy a life insurance policy on anyone with whom you have an Insurable Interest.
There must be an insurable interest for you to take out life insurance on another person.
One way to determine insurable interest is whether you rely on that person for financial support, or a living situation.
Each person has an Insurable Interest in his or her own life, and therefore can select anyone as a beneficiary.
Examples of Insurable Interest
To be certain you may take out life insurance on a specific person, you can e-mail the insurance company you want to get coverage through and ask them to verify in writing (by e-mail) that you can take out a life insurance policy on the person you are interested in insuring.
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Can I Take Out Life Insurance on Anyone?
Disclosure: Compensated Affiliate