Can You Buy Life Insurance for Someone Else?

Most people buy insurance coverage for themselves. This means that they have complete control over how the policy is managed. The policyholder will also be the one to name or change the beneficiary. But is it possible to buy a life insurance policy for someone else?

It’s no secret that you can’t go around buying life insurance for just anybody. Getting a policy on someone else’s behalf comes with certain requirements. You’ll need their consent before an insurance provider allows you to buy a policy for another person. In this blog, we'll explore the topic of taking out a policy on another person.

How To Secure Coverage for Another Person

Aside from consent, you will be required to prove insurable interest in the policy. Insurable interest means that you have a financial connection with them. You can’t take out a life insurance policy on someone unless you have an insurable interest in that person. Immediate family members and business partners have a clear insurable interest. 

Here's a step-by-step guide when applying for a policy for someone else:

• Look for an insurance agency
• Gather all the necessary information about the insured
• Complete the application form and paperwork
• Take a medical exam if necessary
• Go through the medical underwriting process
• Review the policy details
• Pay the initial premium

Who Can You Buy Life Insurance For?

The most obvious answer is your family. Getting insurance for your family members provides you with a sense of financial security. This also brings peace of mind in case of unforeseen circumstances like death or an accident. Here are some people you might consider purchasing a plan for:

Spouse or Partner

Many people share finances with their partners. If you’re one of them, getting a policy for your spouse is a smart move. It’s not an uncommon practice, especially since partners share financial responsibilities like mortgage or school fees. 

Just make sure that your spouse is knowingly participating in the insurance application. Like the usual process, your spouse will have to go through the underwriting process and sign the policy themselves.

Dependent Children

Whether you’re a parent or legal guardian, you’re allowed to buy insurance for your child. In general, children aged 17 or younger can qualify for a policy. The age threshold varies from provider to provider, so consult an insurance agent for guidance.

The younger the child is, the cheaper the policy will be. Buying insurance for a child has other benefits like guaranteed insurability and cash value growth. 

If you’re getting term insurance for your children, they won't need to undergo a medical exam. Children are typically healthier, which prompts an easier application process. It’s a lot easier and quicker to buy a policy for a child than for an adult. 

Parents

Are you planning to purchase insurance for your elderly parents? Many people take out an insurance policy to help cover funeral costs and final expenses. But if your parents are still young and healthy, some of your options include term and whole life insurance. Keep in mind that insurance costs will depend on your parents’ age. The older they are, the higher the policy costs will be.

Business Partner

Owning and managing a business with another person is a tricky situation. The success of the business depends on the contributions of each partner. If something happens to either of them, the business will surely take a hit.

In some cases, business partnerships have an insurable interest. Insurance companies may allow you to take a policy on your business partner and name yourself as the beneficiary. This is necessary to ensure business continuity in their absence. Payouts from insurance coverage can keep things rolling and secure the business interests.

Not all insurers would allow you to buy life insurance for a business partner. You may talk to insurance professionals who specialize in business-related insurance situations like this.

Schedule a Consultation With Us

Buying an insurance policy can be your first step to financial literacy. Whether you want a plan for yourself or a loved one, Local Retirement Group  can help you find the right coverage. We are the local experts when it comes to insurance products and annuities. 

Our team of insurance agents will work with you on a personal level. With our professionalism and customer service, we’ll offer you the best protection and peace of mind.  Contact us to learn more!