You can’t take out a life insurance policy on a stranger or even someone you just casually know. “You have to have an insurable interest in that person,” says Dennis LaVoy, founder of Telos Financial in Michigan. That’s one of the requirements for buying a policy for someone else. The other is consent.

Can you take life cover for someone else?

It’s a complex question and the answer is that yes, legally, you can cover someone else – provided you have an insurable interest. This will also depend on the specific insurer. Before taking out life cover on someone else, there are a few things to keep in mind.

Can you take out life insurance on your parents without them knowing?

When you’re getting life insurance, the person whose life will be insured is required to sign the application and give consent. Forging a signature on an application form is punishable under the law. So the answer is no, you can’t get life insurance on someone without telling them, they must consent to it.

Can a person take a life insurance policy out on someone else?

State governments regulate the insurance industry, so laws can vary for each state. Due to the signature requirements and medical exams, it would be extremely difficult for a person to take a life insurance policy out on someone else without the insured being aware of it.

Can you take out life insurance on your parents?

Taking out a traditional life insurance policy on your parents, such as whole or term life, can be a lot more difficult because it is hard to prove that you have insurable interest on your parents. The best option to help your parents receive coverage is to encourage them to apply for their own policy and list you as the beneficiary.

Do you need to buy life insurance on someone?

Not only do you need to prove insurable interest to buy life insurance on someone, you also need their consent. It would be nearly impossible to buy life insurance on someone without them knowing because most insurance companies will require a medical examfrom the insured person.

What do you need to know about a life insurance policy?

Most policies require you to sign a consent for release of your medical information. Insurance companies make sure that the person buying the policy has an “insurable interest” in the insured.