Buying Life Insurance on Someone Else
Actually, whether you are buying life insurance on yourself or someone else the process is very much the same. As a matter of fact, if you use one of our no exam plans, the process can be very very simple.
Can you buy life insurance on someone else?
What is required to be able to buy life insurance on someone else is their permission and some basic information. Note that it would be illegal to buy insurance on another person without their consent. Besides, it is very likely they will find out and they may just be able to void the policy or file a complaint.
Who shoudl be the owner of the policy?
Once you get the other person's permission to get insurance on them, I would recommend that you make yourself the owner of the policy. He/she would be the insured (when they died the beneficiary gets the policy face amount paid to them) and you would be the owner with full control of the policy. Why be the owner? Well, if the insured is the owner, they retain full control of the policy. The owner is able to make changes to the policy such as modifying beneficiaries, lowering or increasing the face amount of the policy, cancel the policy... I do not think you would want someone to change beneficiaries without your permission. Particularly if you have been paying for the policy! If for any reason, the insurance company is not willing to issue a policy with you as the owner, you may still want to accept the policy as is, and once it is in force, most companies will allow a change of ownership by just filling out a form! Why is it allowed after approval? Not sure, but it seems to make a big difference. Their may be underwriting issue which may disappear once the policy is out of underwriting and is in force.
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One other thing, if you are to take a policy on someone else, and you are want to be the owner, the insurance company may ask you about insurable interest before they would approve the policy. In other words, what authority do you have or what is your relationship to the insured that qualifies you to own the policy rather that them. Make sure you pick the right company or your whole plan may fall through.
About the policy payout
Last but not least, make sure the policy you get has an immediate paying death benefit, not a graded one or an accident only one. All the companies we work with offer a 30 day return policy, no questions asked. That gives you time to review the final policy and ask a lot of questions.
We hope this helps. Don't be afraid to ask us questions!
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