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You usually purchase life insurance on yourself to financially protect your loved ones in the event of your death. It’s an affordable way to secure your family’s financial future because the life insurance cost is quite low.

It is also affordable to buy life insurance on someone else, such as a spouse, child, or even business partner. Buying life insurance on someone else is possible as long as you have consent and insurable interest.

» Compare: Term life insurance quotes

Here we’ll explore exactly what we mean by insurable interest and show you how to buy life insurance on someone else and what it may cost.

Life Insurance and Insurable Interest

Insurable interest means that you would be adversely affected financially if the person who is insured died.

In other words, you cannot purchase life insurance on the stranger you met at the grocery store yesterday. That person has no bearing on your finances. If that person died, you would not be affected financially.

The reasoning behind requiring insurable interest is so that the death of the insured person does not create personal gain for the policyholder. Allowing someone to be able to own life insurance on just about anyone could possibly lead to intentional harm.

As an example, married couples can purchase life insurance on one another because each of their finances, most likely, affects the other.

However, being related to someone does not automatically mean you can buy life insurance on them. To buy life insurance on anyone, even including your very own family members, you would still need to prove that their death would negatively impact your finances.

Similar to how you can’t get life insurance on someone just because you are related to them, there are also occasions in which you can purchase life insurance on someone if you are not related. There are many business relationships that can be financially protected with a life insurance policy. One example is key person life insurance.

Life Insurance and Consent

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 exam from the insured person.

Even policies that do not require an exam would need the signature of the insured.

The only situation in which insurable interest and consent are not needed is if parents apply to purchase life insurance on their minor child.

If someone does manage to purchase life insurance on another person without their consent, this is insurance fraud. It is very difficult to do so, however, because of all the legalities involved when applying for life insurance.

To summarize, there are obstacles in place to prevent someone with possible ill-intentions from purchasing a life insurance policy on you:

  • Insurable Interest
  • Medical Exams
  • Consent Forms

» Learn more: Can Someone Buy Life Insurance on Me Without My Consent?

Not only do you need to prove insurable interest to buy life insurance on someone, you also need their consent.

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Buying Life Insurance on Someone Else

Life insurance greatly affects families’ lives. It’s not uncommon to want to learn more about how purchasing life insurance on someone else works. Here are a few questions our advisors often answer:

Can I buy life insurance on my parents?

Yes.

You need insurable interest and your parents’ consent to buy life insurance on them.

Examples of insurable interest:

  • You would become responsible for any of their financial obligations if they passed away.
  • You currently rely on them financially.
  • You and your parents co-signed on a loan together.

Your parents’ ages make a difference on what type of life insurance you can buy. Term life insurance isn’t available to all ages.

If your parents are over the age 75, a permanent life insurance policy or guaranteed issue policy may be your best option if you’re looking for lifelong coverage. The life insurance cost of guaranteed issue life insurance is quite high. However, these policies do not require any health information or a medical exam in order to be approved, so, for some, the cost is worth it.

If you’re looking for a more affordable short-term option, a few insurance companies we work with will offer a 10-year term policy for ages 75 and under or a 5-year term policy for ages 80 and under.

Can I buy life insurance on my spouse?

Yes.

You need insurable interest and your spouse’s consent to buy life insurance on them.

Because the majority of spouses share bank accounts or at least both contribute to bills, insurable interest is apparent. While spouses can own life insurance on each other, most couples top to own their own policy and simply name their spouse as the policy beneficiary. The benefit of doing this is ensuring you have full control over your term life policy.

Side note: if you’re in the middle of a divorce and your spouse owns a life insurance policy on you, it may be in your best interest to negotiate transferring ownership.

Can I buy life insurance on my significant other?

Yes.

If you are in a committed relationship, but are unmarried, you can still buy life insurance on each other. Life the situations above, you need to have consent and prove insurable interest.

Examples of insurable interest can include:

  • Both individuals being named on a lease
  • Jointly owning a home or business
  • Debts naming both individuals (such as a car loan)
  • Having children
  • Being engaged

Hint: when you apply for life insurance on your significant other, consider using the titles “significant other” or “partner” versus “boyfriend” or “girlfriend.”

» Learn more: Can I Buy Life Insurance on My Significant Other?

Can I buy life insurance on my child?

Yes.

Unlike the other scenarios we mentioned, you do not need consent to buy life insurance on your child, if your child is under the age 18. If your child is 18 years old (17 ½ for some insurance companies) or older, you will need their consent.

It’s not uncommon for a parent to buy a permanent life insurance policy on their young children. It not only allows parents to pay for a funeral and time off work should the worst happen, but it also locks in their child’s future insurability and the policy starts accumulating a cash value.

Another option (also easier and less expensive) is for a parent to add on a child rider to their own life insurance policy when they purchase one. The average life insurance cost for a child rider is about $50 per year and will typically cover each child under the age of 18 for $10,000.

A child rider also locks in future insurability. Once they become older, you can convert the rider into a small standalone permanent life insurance policy without having to re-prove their insurability. You will also then have the option to transfer ownership of their policy over to them.

» Learn more: Buying Life Insurance on Your Children

Can I buy life insurance on my business partners?

Yes.

There are certain criteria that need to be met, but life insurance on key persons and buy-sell agreements are common ways to mitigate risk when owning a business.

The death of one person, whether it’s a co-owner or a person essential to operations, can be detrimental to a business’ success—especially a small business. Life insurance can keep a business running if the unexpected happens.

» Learn more: Buy-Sell Agreements and Life Insurance: Protecting Your Business

How Do I Apply for Life Insurance on Someone Else?

With Quotacy, it’s easy to start the process of buying life insurance on someone else.

Couples often want to buy life insurance at the same time. It’s important to note that life insurance doesn’t offer “bundling” discounts or “two-for-one” specials. The life insurance cost will be the same whether you purchase at the same time or years apart.

You can run as many quotes as you like. When you’re ready to apply and create an account, you’ll be brought to a Dashboard. (You can also make a Dashboard before running quotes here.) On this Dashboard, your quote is shown. You can complete your application from here.

You will see an option to run a quote on someone else (or you can run more quotes on yourself if you’re interested in owning multiple policies.)

screenshof of Quotacy's life insurance dashboard

If you are applying for life insurance on someone else, after you submit the application, the person you want to insure will be contacted to verify the information. So be sure to use their contact information if you’re applying for life insurance on someone else.

screenshot of Quotacy term life insurance application insured contact information

Feel free to contact us with any questions.

Do you have 30 seconds to spare? Get a quote and see what life insurance would cost on your loved one today.

» Calculate: Life insurance needs calculator

Did we answer your question in this post?  If not, we invite you to check out our comments section below and our life insurance FAQ section. We have tackled many specific questions relating to buying life insurance on someone and you may find the answer you’re looking for.

Next steps

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About the writer

Headshot of Natasha Cornelius, a life insurance writer, for Quotacy, Inc.

Natasha Cornelius

Writer, Editor, and Co-host of Quotacy's Q&A Fridays

Natasha is the content manager and editor for Quotacy. She has been in the life insurance industry since 2010 and has been making life insurance easier to understand with her writing since 2014. When not at work, she's probably studying and working toward her Chartered Life Underwriter (CLU) designation while throwing a tennis ball for her pitbull mix, Emmett, or curled up on her couch watching Netflix. If it’s football season, the Packers game will be on. Connect with her on LinkedIn.

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