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Can I purchase life insurance on someone else?

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Posted

Can I purchase life insurance on someone else?

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On One Hand: Individuals Can Purchase Life Insurance on OthersInsurance companies allow individuals and businesses to purchase life insurance on other people. Individuals can purchase life insurance on other members of their family including their children, spouses and close relatives. Businesses are allowed to obtain life insurance policies on their important employees. Business partners may also choose to buy life insurance policies for each other.On the Other: Insurable Interest and Signatures are RequiredWhile insurance laws vary for each state, most insurance companies are required to follow the insurable interest doctrine. The insurable interest doctrine requires individuals to be dependent on (financially or otherwise) the person that they are insuring. Insured individuals must also sign their policy for it to be valid.Bottom LineIndividuals can purchase life insurance policies for other people. However, insurance laws require companies to verify that policy owners have an insur

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Peter Paul

Yes, you can buy, pay the insurance premiums and collect the death benefit on a life insurance policy that insures a life that is not your own. But you must fulfill two conditions for the insurance company to sell you a policy.

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