Co-Founder, Coastal Financial Partners Group, California
If you mean paying premiums for a new policy for your grandparent where he/she will own and be the insured of the policy, yes, if he/she is insurable, of course. The premiums you pay may be gifts.
If you mean to take out life insurance on his/her life but be the premium payor, owner and beneficiary, it is permitted under the rules of insurable interest as long as she is insurable and consents to the insurance. The insurance company may require justification of the insurance.
Yes, you can take out a life insurance policy on a grandparent in many situations. If you are contributing to your grandparent's living expenses or health care through money or services, or if your grandparent lives with you, there will be no problem with purchasing life insurance for your grandparent. If you are not contributing to your grandparent's financial situation, you still should be able to purchase a final expense policy (under $100,000) for your grandparent.
When purchasing simplified issue final expense insurance, it is often easier to purchase the policy if your grandparent is the owner of their own policy. It does not matter so much who is the payer.
As my colleagues have said, this is indeed possible. You simply have to show that, in a way, you have some sort of vested interest in the life of the person you are insuring. The insurance calls it, coincidentally enough, "insurable interest", which really just means that you have a stake in wanting the person to live and be well. This is the true backing for that notion. It is to avoid certain people from taking out policies on other persons who they would have a vested interest in actually dying. Sad that this test of suitability had to be put in place, but it is there for a reason. Also as stated above, it is much easier if you put nearly everything in their name, pay for it, but agree on a mutually beneficial beneficiary.
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If you mean to take out life insurance on his/her life but be the premium payor, owner and beneficiary, it is permitted under the rules of insurable interest as long as she is insurable and consents to the insurance. The insurance company may require justification of the insurance.
When purchasing simplified issue final expense insurance, it is often easier to purchase the policy if your grandparent is the owner of their own policy. It does not matter so much who is the payer.