How To Get Life Insurance On Someone Else

Life insurance is a sensitive topic, and it's understandable that you might want to keep it private from the person whose life will be insured. However, it is not possible to take out a life insurance policy on someone without their knowledge and consent. The person being insured must sign the application form and give their consent, and they will also have to undergo a medical examination as part of the application process. This is because the insurance company needs to assess the person's health, age, and other factors to determine the cost of the premium. Additionally, you must prove that you have an insurable interest in the person, meaning that their death would cause you financial hardship or loss. So, while you can't secretly get life insurance on just anyone, there are valid reasons to insure a person with their knowledge and consent.

Getting consent from the insured

The insured's consent is necessary because the insurance company will need to collect sensitive information and data from them, such as their medical history, hobbies, and personal and family medical history. Additionally, the insured person may be required to undergo a medical examination as part of the application process. This examination helps determine the individual's health, wellness, and age, which are factors in determining the insurance premium.

In the case of children, the consent of the parents or legal guardians is usually sufficient, and the child's consent may not be required. However, for adults, it is essential to obtain their explicit consent and participation in the process.

It is important to note that the insured person must also give their consent for any changes made to the policy, such as changing the beneficiary or adjusting the coverage. Therefore, it is essential to maintain open communication and ensure that the insured person is comfortable with the policy and any changes made to it.

Proving insurable interest

To purchase a life insurance policy for someone else, you must prove to the insurance company that you would experience significant financial hardship in the event of their death. This is called "insurable interest".

Insurable interest is a fundamental insurance principle requiring the policyholder to have a legitimate financial stake or interest in the insured individual. It ensures that policies are taken out for legitimate financial protection rather than speculative or unethical purposes. Without it, insurance contracts could be used for purposes that would amount to gambling on someone's life or property.

In the context of a life insurance policy, insurable interest involves demonstrating a legitimate financial interest or connection to the insured individual. This means proving that you would suffer financial loss or hardship if the insured person were to die.

The specific methods and requirements for proving insurable interest may vary by jurisdiction and insurance company. Here are some common ways to do so:

• Family relationship: If the insurable interest is based on a family relationship, such as a spouse or child, providing evidence of the family relationship, such as marriage certificates or birth certificates, may be required.
• Financial dependency: If the insurable interest is rooted in financial dependency, documentation of the financial connection may be necessary. This could include financial statements, tax records or other proof of dependency.
• Business partnership: In the case of business partners, documentation of the business organisation, the role of the insured person within the business, and the financial implications of their death on the business may be required.
• Creditor-debtor relationship: Creditors seeking insurance on a debtor may need to provide evidence of the debt and the financial interest they have in the insured individual's life, such as loan agreements or financial contracts.
• Legal requirements: In cases where insurable interest is required by law, such as court-ordered life insurance for alimony or child support, the legal documents and court orders may serve as proof of the insurable interest.
• Application and documentation: When applying for the life insurance policy, the policyholder will typically need to provide information about the nature of the insurable interest. The insurance company may review this information and request additional documentation as needed.

Filling out the application form

Personal Details

Start by providing personal details about the proposed insured, including their full name, sex, date of birth, social security or tax ID number, driver's license information, marital status, birthplace, citizenship, address, email, employer, occupation, and the number of years at their current address. If the insured is a minor, you will need to provide the same information for their parents or legal guardian.

Medical History

The application will require a comprehensive overview of the proposed insured's medical history. This includes information about any significant medical conditions, hospitalizations, medications, mental health treatments, height, weight, and family medical history. Be prepared to disclose any prescription medications, including dosage and frequency, and provide specific details about past or ongoing treatments. It is essential to be as accurate and detailed as possible in this section.

Lifestyle Questions

The insurance company will ask about the proposed insured's lifestyle choices and activities that may impact their health and life expectancy. This includes questions about alcohol and drug use, criminal history, risky hobbies or sports, travel plans, and occupational risks. Be transparent about any legal or criminal issues related to alcohol or drug use and provide details about any convictions or driving violations.

Financial Information

The financial section of the application aims to understand the proposed insured's financial situation and ability to pay premiums. You will need to disclose information about multiple life insurance policies, if applicable, as well as income, net worth, assets, and debts. The insurance company will evaluate this information to assess the proposed insured's stability and affordability.

Beneficiary Information

You will need to designate primary and contingent beneficiaries who will receive the death benefit if the insured passes away. Provide the beneficiaries' full names, dates of birth, Social Security numbers, and the percentage of the benefit each will receive.

Payment Information

Decide on the billing frequency, such as monthly or annual payments, and provide the necessary payment details. If you plan to pay through a bank account, include the account number and routing number.

Additional Information

The application may also inquire about existing life insurance policies, pending applications, and the reason for purchasing additional coverage. Be prepared to disclose any medical examinations or treatments the proposed insured has undergone and provide details about their personal physician.

Remember to review your application for accuracy and completeness before submitting it. Inaccurate or incomplete information can impact the underwriting process and may result in delays or even denial of coverage.

Taking a medical exam

Most life insurance companies require a medical exam before issuing a life insurance policy. This is to determine the applicant's health and calculate the premium to offset the company's risk. The healthier you are, the lower your premiums will be.

The medical exam usually takes 15 to 45 minutes and consists of two parts: a questionnaire and a basic physical exam.

The Questionnaire

The questionnaire will cover the following:

• Family medical history
• Current and previous doctors' contact information
• Details of current diagnoses
• Recent doctor visits

The Physical Exam

The physical exam will include:

• Recording your weight, height, body mass index (BMI), and vitals, including pulse and blood pressure
• Collecting blood and/or urine samples to test for certain illnesses or conditions
• Depending on your circumstances and the insurer's requirements, you may also be required to take an electrocardiogram (EKG), treadmill stress test, or cognitive ability test

Preparing for the Medical Exam

There is not much you can do to significantly improve your health in a short time before the exam. However, you can take some steps to ensure the best possible results:

• Eat healthily in the week leading up to the exam, limiting high-cholesterol foods, salt, sugar, and fat
• Avoid non-essential over-the-counter medications such as antihistamines and decongestants, which can raise blood pressure and glucose levels
• Avoid alcohol, as it can negatively impact liver enzymes and cause dehydration
• Increase your water intake to flush out toxins and stay hydrated for the blood test
• Get plenty of sleep the night before the exam, as this can positively impact your vital signs
• Avoid strenuous exercise 12-24 hours before the exam, as it can negatively impact your blood pressure and cholesterol levels
• Avoid caffeine and nicotine one hour before the exam, and drink a glass of water
• Wear lightweight clothing and short sleeves for the weigh-in and blood draw

Spouses and partners

In addition, divorce decrees often involve life insurance to cover alimony obligations should one spouse pass away. Therefore, it is not uncommon for people to buy life insurance policies on their former spouses.

To buy life insurance for your spouse or partner, you will need their consent and they will need to be involved in the application process. They will have to go through the underwriting process, which involves answering questions and, in most cases, taking a medical exam. They will also have to sign the application.

Frequently asked questions