How To Insure Your Girlfriend's Life: All You Need To Know

Life insurance is a contract between an insurer and a policyholder, guaranteeing the insurer pays a sum of money to named beneficiaries when the insured policyholder dies. In the context of relationships, it is possible to get life insurance on your girlfriend, but you will need her consent and to prove 'insurable interest', i.e., that you would experience financial hardship in her absence. This can be demonstrated through a lease agreement, joint ownership of a home or business, or shared debts. Engaged couples are generally considered to have a higher level of commitment and financial dependence, making it easier to obtain life insurance.

Consent and insurable interest

Consent, on the other hand, is the permission of the insured person to be covered by the policy. Both consent and insurable interest are required to purchase a life insurance policy on another person.

Consent

When you buy life insurance for someone else, you need their consent. This is typically given by signing the life insurance application or policy. A phone interview conducted by the life insurance company with the person buying insurance or the insured may also serve as consent.

Insurable Interest

In life insurance, insurable interest is the emotional, legal, and financial interest a person has in the continued existence of the insured. This means that the policy owner must always have an insurable interest in the life of the insured person. If the owner is not the beneficiary, the beneficiary named in the contract would also need an insurable interest.

Insurable interest can be established in several ways, depending on the relationship between the policy owner and the insured:

• Spouse/Domestic Partner: A marriage certificate or domestic partnership registration can prove the relationship.
• Dependent: A birth certificate or documentation of legal guardianship can prove a dependent relationship.
• Parents: You can get a life insurance policy for your parents with their consent.
• Business Partners: A business license, partnership agreement, or shareholder agreement can serve as documentation of a business relationship.
• Corporations: An employment contract, financial statements, meeting minutes, and other documents can prove the financial importance of an employee.
• Estate Planning: Trust agreements and wills can provide proof of this relationship if they name the beneficiaries.
• Legal Obligations: Documents like court orders can prove legal obligations such as alimony or child support.
• Debtor-Creditor Relationship: A loan agreement can prove the relationship between a debtor and a creditor.

It's important to note that insurable interest only needs to exist when the policy is purchased. For example, you can take out a life insurance policy on yourself and name your spouse as the beneficiary. If you later decide to change the beneficiary to a friend, you can do so because the insurable interest requirement was satisfied when the policy was initially approved.

Naming a girlfriend as a beneficiary

Yes, you can name your girlfriend as a beneficiary of your life insurance policy. In fact, you can name anyone you want as a beneficiary, including your girlfriend, without needing to demonstrate insurable interest. Insurable interest is only required when taking out a life insurance policy on someone else.

Insurable interest is a term used to describe a situation where one person would face financial hardship if another person were to pass away. In simpler terms, if you depend on your girlfriend's income for essentials like rent or bills, then her death would significantly impact your finances. Examples of insurable interest include both individuals being named on a lease, joint ownership of a home or business, and shared debts like a car loan.

While it is not necessary to prove insurable interest when naming your girlfriend as a beneficiary, you will need her consent if you want to take out a life insurance policy on her. This involves getting her consent, having her sign the application, and possibly undergoing a medical exam.

There are advantages to owning your own policy and naming your girlfriend as a beneficiary. You will have control over the policy and can change beneficiaries, adjust coverage, and manage the policy as you see fit. You will also be responsible for paying premiums, ensuring the policy remains in force. Additionally, you will receive all communications about the policy and have access to information. The payout, which is usually tax-free, will go directly to your girlfriend, bypassing probate and allowing quicker access to funds.

If you are considering naming your girlfriend as a beneficiary, it is important to maintain clear communication and ensure both parties understand the policy's terms and obligations.

Proving insurable interest

Yes, you can get life insurance for your girlfriend, but you will need to prove insurable interest and get her consent. Insurable interest is a key requirement in life insurance and is designed to prevent fraud and moral hazards. It ensures that you have a financial stake in your girlfriend's continued well-being and would experience financial hardship if she were to pass away.

Insurable interest can be proven in several ways. If you and your girlfriend are financially dependent on each other, this will help prove insurable interest. Examples of financial dependency include:

• Both individuals being named on a lease
• Joint ownership of a home or business
• Shared debts like a car loan
• Having children together

Insurable interest can also be sentimental, based on love and affection, rather than economic. This is usually the case for relationships by blood or marriage. However, this can vary by state. For example, according to Pennsylvania law, if you are related to someone by blood or marriage, your insurable interest can be based on love and affection. If you are not related, you must have a financial interest in the insured person staying alive.

Before issuing a life insurance policy, an insurer will take steps to verify insurable interest. This may include requesting identification from the involved parties and conducting a phone interview to inquire about relationships and insurable interest. If you are unable to prove insurable interest, the insurer may not issue the insurance policy.

When partners are denied life insurance

• The couple has only been dating for a short period.
• They live separately.
• They are not financially dependent on each other.

In these cases, it may be easier to name your partner as a beneficiary rather than owning a policy on them. When filling out an application, it is recommended to use the terms “partner” or “significant other” instead of “boyfriend” or “girlfriend”.

Another option is to name your estate as the beneficiary and specify in your will that your partner should receive the insurance proceeds. However, this will result in a delay in receiving the benefits as they will need to go through probate.

If you are denied life insurance on your partner, you can also consider other types of insurance, such as accidental death and dismemberment life insurance, which can provide coverage in specific scenarios.

Other life insurance options

There are several other life insurance options available. Firstly, you can name your partner as a beneficiary, instead of owning a policy on them. When filling out the application, it is recommended that you use the titles ""partner" or "significant other" instead of "boyfriend" or "girlfriend".

Another option is to name your estate as the beneficiary. This involves writing a will that divides your assets among your chosen beneficiaries, including your life insurance benefits to your partner. However, this method will delay the payout as the money will have to go through probate.

If you are engaged, it is generally simpler to get life insurance as insurance providers consider you to have a higher level of commitment and financial dependence.

If you are unable to get life insurance on your partner, you could list your estate as your policy's beneficiary and specify in your will that your partner should receive the insurance proceeds. Keep in mind that this means the payout will be subject to probate, delaying access to the funds.

Frequently asked questions