No, you cannot take Life Insurance out on Anyone. There has to be what we call "insurable interest". This means you have something to lose if this person was to pass away. Insurable Interest can be a spouse or child, a business and business partner. A grand parent as well. Even a loan company can have an insurable interest as if you pass before the loan is paid, they can get the remaining balance paid.
Talk to an agent or broker about who you are looking at getting coverage on so you can determine if there is an Insurable Interest.
Co-Founder, TermInsuranceBrokers.com, Goldenzweig Financial Group, Las Vegas, Nevada
No, you cannot take a life insurance policy out on just anyone. When applying for life insurance, the two big conditions that must be met are 1) the insured person has to agree to the purchase of a life insurance policy on their life and 2) there must be an insurable interest. A carrier will not approve a policy if these two conditions are not met.
I would recommend consulting with an experienced broker to determine if the life insurance policy you want to buy is acceptable. Brokers can also shop the case for you to see which carrier will work best for your program.
I hope the input is helpful - please feel free to contact me for help and if you have any other questions. Thanks very much.
No, very sorry, you cannot take life insurance out on anyone. There are several criteria that must be met. The first one is there must be an insurable interest. Meaning a loved one, family member, business partner or key employee. In other words, you would incur a financial loss at the insured's sudden death. Next you must have that persons knowledge and permission in order to insure them. They must have a legitimate need for life insurance and have reasonably good health to qualify for coverage, because that person has to go through underwriting.
Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
At one time it was a common form of gambling to take out an insurance policy, particularly on a sailor, just before he ships out on a journey. That is not possible any longer; however, there is a secondary market of life insurance policies where the owner of an insurance policy can sell it to a third party who hasn’t an insurable interest. It is usually done to secure cash to pay medical bills of a terminally ill person.
That is a great question! It is interesting to know that the laws that govern life insurance came about because of the unsavory practice of gambling on when a person would die. You and I might be sitting at the saloon, and take a dislike to a guy at the bar. We go across the street, and buy a policy on his life. We bet the policy on how many days/hours/minutes longer he lives, with the winner taking the death benefit prize! To protect against that, you must have that person's permission, understanding of what they are signing, and signature. You must also be able to prove a financial loss, were they to pass. Good thing! Thanks for asking!
When underwriters review a life insurance application and other records to determine life insurance eligibility, they look at more than the health of the person being insured. They also look at the relationship of the owner of the policy to the person being Insured; the relationship of the policy owner to the beneficiaries; and the income of both the owner and insured, among other factors.
Thus, no one can randomly buy a life insurance policy on someone with whom they have no familial or financial relationship. This protects both the Insured and the company from fraud.
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Talk to an agent or broker about who you are looking at getting coverage on so you can determine if there is an Insurable Interest.
I would recommend consulting with an experienced broker to determine if the life insurance policy you want to buy is acceptable. Brokers can also shop the case for you to see which carrier will work best for your program.
I hope the input is helpful - please feel free to contact me for help and if you have any other questions. Thanks very much.
Thus, no one can randomly buy a life insurance policy on someone with whom they have no familial or financial relationship. This protects both the Insured and the company from fraud.