Can someone buy term life insurance on my life without my knowledge or permission?
Fortunately having someone buy term life insurance on you without your consent is almost impossible, but it’s important to understand the steps you should take if it occurs.
Whether you’re ready to buy term life insurance or you’re researching your options, Quotacy is here to answer your questions.
Buy Term Life Insurance with Confidence
Life insurance companies implement numerous strategies to prevent insurance fraud. These obstacles allow insurers to verify an applicant’s identity and obtain express permission to move forward with coverage. These strategies include:
- Application questions: When applying for life insurance, there are certain questions that the insurance carrier uses to verify identity. These questions include:
- Full name
- Street address
- Social Security number
- Driver’s license number
- Employer information
- Signatures: All life insurance applications require the signature of the proposed insured.
- A release form: Most life insurance policies require the proposed insured to sign a consent form to release his/her medical information.
- Phone interview: After submitting an application, the life insurance company will contact the proposed insured for a confidential phone interview to review the application’s accuracy.
- A medical exam: After applying, most life insurance policies require the proposed insured to take a medical exam. The medical examiner will check the insured’s ID to ensure identity and will ask the insured many of the same questions from the application to verify answers.
- Insurable interest: In order for someone to purchase life insurance on someone else, life insurance companies require insurable interest. Insurable interest means there has to be financial dependence. For example, spouses rely on one another’s income for their standard of living. In contrast, your neighbor does not have a financial interest in your life and could not buy term life insurance on you.
In order for someone to purchase life insurance on someone else, life insurance companies require insurable interest. Insurable interest means there has to be financial relationship (dependence) between the person whose life is insured and the person(s) who will receive the payout of the life insurance money upon death of the insured.
Steps to Take If Someone Did Buy Term Life Insurance on You Without Your Permission
After taking those safeguards into consideration, if you still think someone may have decided to buy term life insurance (or any type of life insurance) on you without your permission, there are steps you can take, but it may take some effort. It is not possible to just Google your name alongside the words life insurance to find out. Life insurance is personal, so protecting your privacy is important.
Step 1: If you think you know which life insurance company the policy in question was purchased from, you can call their customer service and explain the situation. They will be able to confirm if there is a life insurance policy on you and then help you make the appropriate steps to terminate it. There are many life insurance companies, however, so this option only realistically works if you know the name of the life insurance company.
Step 2: You can request your Medical Information Bureau records (MIB Consumer File). Life insurance underwriters use MIB’s services when assessing individual applications when they underwrite life insurance policies. Your consumer file may include the name of any MIB member company that:
- Received a copy of the medical and personal information that MIB has in its database about you during the three-year period preceding your request;
- Made an inquiry to MIB about you within the past two years.
It is free to request your MIB file. You will not have an MIB Consumer File unless you have applied for individually underwritten life, health, disability income, long-term care, or critical illness insurance within the past seven years (or earlier depending on applicable law) and the insurance company to which you applied (or its reinsurer) was an MIB member company that submitted an MIB inquiry.
If you get a letter stating you don’t have an MIB file, you can rest assured there is likely no life insurance policy out there on you.
If you do receive a file, you can look for any companies that you did not personally apply to and contact them.
Step 3: You can hire policy locator services. There are online services that for a fee will send out emails and letters to life insurance companies on your behalf to discover if there is a life insurance policy in your name. The MIB website mentioned earlier is one company that offers this service.
It costs $75 and it is important to note that the locator service generally will not report on policies with a $100,000 face amount or less, guaranteed issue life insurance policies, employer-based life insurance policies, or military-issued life insurance policies.
As you have read, it is unlikely that there is a life insurance policy out there with your name on it that you did not sign off on. So, it is unlikely that someone proceeded to buy term life insurance (or any other type of life insurance policy) on you. Life insurance companies take your privacy and security very seriously.
If you’re looking to buy term life insurance for yourself (or for your spouse or loved one), Quotacy can help you get the best term life insurance rates today.
» Compare: Term life insurance quotes
Watch the Buying Life Insurance Without Permission Video
Welcome to Quotacy’s Q&A Friday where we answer your life insurance questions. Quotacy is an online life insurance agency where you can get life insurance on your terms.
I’m Jeanna and I’m Natasha.
Today’s question is:
Can someone buy life insurance on me without me knowing?
That is a great question, Jeanna, and one we get fairly often.
The short answer is no. This is because when you apply for life insurance on someone else, an insurance company is going to want to see two things: insurable interest and consent.
To buy life insurance on someone else, insurance companies require:
- Insurable interest
And what do those two things mean?
Insurable interest essentially means that if you’re applying for life insurance on someone else the insurance company is going to want to know that they have an impact on your finances somehow.
The best example I can give is a married couple. For example, if Chad, your husband, were to pass away suddenly you’d probably have a pretty hard time paying for the mortgage on your income alone. It would be very difficult. So not only do you have an emotional interest in keeping Chad alive, but a financial one as well.
Let’s keep him around.
Probably a good idea.
So I can’t buy life insurance on great aunt Shirley in Arkansas?
If great aunt Shirley has no bearing on your finances, when you apply for life insurance on her, the insurance company is going to take a really hard look at why you’re applying and most likely decline that application.
So what about consent?
Consent’s a little bit more straightforward. When you apply for life insurance on someone, the life insurance company will want to know that you have the OK to do so.
After you fill out an application and send it in, two things happen: a phone interview and a medical exam.
Phone Interview & Medical Exam
The insurance company needs to speak to the person being insured during both of these steps, and confirm consent with them face-to-face.
Both of which are going to include steps to prove the insured’s identity and make sure that they are OK that you’re applying for life insurance on them. So it’s nearly impossible for me to buy life insurance on a complete stranger.
Correct. The life insurance industry is highly regulated and they have many measures in place to prevent insurance fraud and other nefarious schemes. Makes sense.
If you have any questions about life insurance make sure to leave us a comment. Otherwise, we’ll see you next week. Bye!
Photo credit to: Pawel Janiak
About the writer
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.