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All of us understand the importance of having good life insurance protection in our lives, but can you get life insurance on anyone? There are many people who believe that they can only get life insurance for themselves. However, there are certain relations where you can purchase life insurance for someone other than yourself.

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Does this mean that you can take out a life insurance policy on anyone? The answer to that question is no, but you can get life insurance for someone who is an “insurable interest” to yourself.

Whom Can You Buy Life Insurance for?

There are a number of people that you can purchase life insurance for, they simply need to be an insurable interest to you in order for the policy to be valid. The people whom you can purchase the policies include the following;

  • Family
  • Parents
  • Spouses
  • Business Partners

Family members are considered to be your direct blood relations, however, spouses are also considered part of the family as well, so you can purchase an insurance policy for them as well. Business partners are not family, but in certain circumstances they are a vital part of your finances which means that you can take out life insurance on anyone who has a blood, marital or financial relation to you.

Does the Person Have to be a Blood Relation?

This is actually an excellent question as many people believe that life insurance only covers blood relation or spouses which are an exception. This is because the rules of life insurance restrict the idea of can you get life insurance on anyone. Such policies could be easily abused if you can take a life insurance policy out on anyone because that could lead to compromising or unsettling circumstances.

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Spouses by definition are not blood relations, so they are one obvious exception to the blood relation rule. A spouse is part of the family and an unexpected passing would create a financial shortfall, especially if they are the breadwinner. Even if they offer a supporting salary, the loss would have a considerable financial impact which is why they are covered.

Children and parents, particularly elderly parents are subject to being holders of life insurance policies because if anything happens to them, the funeral expenses will have to be covered by the family. So, while they may not offer any financial contribution to the family itself, their unexpected passing will mean a considerable financial burden that must be addressed. That is why many children and elderly parents often have life insurance policies in their name paid for by the family members so that an unexpected death can cover the financial burden it will cause.

However, business partners are another exception because of the financial ties that they represent. For example, if your business partner should unexpectedly pass away, that would arguably put you and the company you run into dire financial straits. This is why there are exceptions when it comes to business partners in terms of obtaining a life insurance policy.

Underwriting Process to Buy a Life Insurance Policy for Someone Else:

The process itself is rather straightforward as you and the beneficiaries are informed about the policy, the terms and the coverage. This is to ensure that everyone understand what is involved if the policy holder should pass away unexpectedly during the lifespan of the life insurance.

However, can you get life insurance on someone without them knowing? That is another very good question that often gets asked by those who may not want to bother or perhaps surprise someone with such a policy.

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The answer to that question is no since the both the policy holder and the beneficiary must be notified. This is an important consideration since buying a policy for someone who is elderly and naming yourself as the beneficiary brings with it uncertainties that go beyond the meaning of life insurance.

So to the question of can you get a life insurance on someone without them knowing the answer is no. There must be insurable interest in order for the policy to be valid in the first place plus the person being insured would be notified either for a medical exam or their social security number which would alert them to the fact that a policy was being taken out on them.

Few Exceptions to Remember:

Are there exceptions to the rule of who can get a life insurance policy? The answer to that question is yes.

There are always exceptions to the rules that cover life insurance policies if it can be shown where the passing of a person will have a substantial financial effect whether they are a blood relative, spouse, and parent or business partner.

For example, if you have someone living in your household that provides substantial financial assistance to you or your family and they are not a blood relative, they may be considered an exception to the general rules when it comes to covering them with a life insurance policy. So, in this instance a renter for example who is occupying a room in your household and also providing other financial assistance that is considered essential may be an exception.

Another example would be similar to covering children or elderly parents if you have someone whose unexpected death will have to be covered by the family in terms of funeral expenses.

So, while the answer to the question of can you take a life insurance policy out on anyone is no, there are also exceptions to the general rules as long as you can demonstrate clear insurable interests. Such situations will have to be discussed with the life insurance company so that there is a clear understanding of what circumstances really qualifies.

Can you get life insurance on anyone?

No, but you can cover a number of people who are and are not your blood relations if you can demonstrate that there is a clear and substantial financial burden that will take place if they are not covered.