You can buy term life insurance for someone else, but they must have an "insurable interest". In other words, would you suffer a financial burden if that person were to die? Usually life insurance is purchased on a family member, partner or key business associate. Please note you may never purchase life insurance on someone without their knowledge. The insured will have to sign the application and pass through underwriting in order to be insured.
If you mean, can you pay for a policy for someone else so that there will be a death benefit when they die, the answer is: usually. Most people who buy term life insurance for someone else do it to protect themselves in some way. E.g. That other person may owe them money, or the Payer knows he/she will have the task of paying for the funeral if the other person dies.
Life insurance companies look carefully if the Payer is also the Owner of a policy in which someone else is the Insured. They are not as concerned if you simply pay for a policy for someone else and allow the Insured to own their own policy.
That's a great question! Back when life insurance became popular, it didn't take long for some people to figure out that they could insure someone without their knowing about it, and then make friendly wagers on the life expectancy of that someone, with the policy benefit as the prize. To prevent that from happening anymore, the insurance industry (goaded by the gambling authorities) set into place a rule requiring that there be an "insurable interest" in the person you want to insure. So to purchase a policy on someone else, you will need to show that their passing will cost you, financially, or emotionally. They will need to either be immediate family, or someone that by passing causes you to suffer a financial loss that is insurable. You will also need their consent, if they are not a minor, as they will have to be in agreement with the policy terms, and provide signatures, and health information. As long as you can satisfy those requirements, you should be good to go! Thanks for asking!
Regional Marketing Director, Capital Choice Financial Group,
You can most definitely by term life insurance for someone just as long as there is an insurable interest in the insured. It could be a relative or even a business partner but the owner of the policy if it is other than the insured must prove that he or she has some dependence on income or responsibility from the insured.
Like others have mentioned, is there an insurable interest? Why would be the purpose of being the owner/payor of a policy, on another individuals life.
If you can give a valid reason, then YES ! Most insurance carriers are open to these types of requests, as long as it matches their underwriting criteria.
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Life insurance companies look carefully if the Payer is also the Owner of a policy in which someone else is the Insured. They are not as concerned if you simply pay for a policy for someone else and allow the Insured to own their own policy.
If you can give a valid reason, then YES ! Most insurance carriers are open to these types of requests, as long as it matches their underwriting criteria.