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Can You Take Out a Life Insurance Policy on Someone Without them Knowing?

Can you take a life insurance policy out on anyone (like, ANYONE)? Wondering how to find out if someone took an insurance policy out on YOU? Let’s dive into this touchy subject.

Could you imagine being allowed to take out a life insurance policy on anyone you wanted?

This would mean that if they died, you would get a cash payment of some sort.

family playing out in backyard while sun setting, text overlay

You could take one out on movie stars like Meryl Streep and Clint Eastwood. You could take one out on someone in a dangerous situation, like a football player, a soldier, or a police officer.

And since they wouldn’t ever have to know – at least, you’d hope – then you could save on all of those awkward conversations…right?

It turns out that life insurance polices do not work that way.

Let’s dig further into this touchy subject by looking at what life insurance policies are, reasons someone would want to buy one on someone else, whether or not someone can take a life insurance policy out on you without you knowing, etc.

Psst: In a hurry, and you suspect someone took an insurance policy out on you without you knowing? You can request a free report (one per year) from The Medical Information Bureau (MIB), which keeps a database of life insurance applications from the last 7 years.

What is a Life Insurance Policy?

Life insurance is a type of insurance that pays out to a beneficiary upon death of the “insured” person the policy (who the policy is for), or after a certain period of time has passed.

It’s really financial protection against the loss of someone who’s passing would bring financial problems (let alone, grieving) for others.

Money can be used for things like the costs of the funeral, future educational expenses for the kids, outstanding debts, income that’s been lost, living expenses, etc.

A life insurance policy is your contract with the insurance company; you pay premiums each month (don’t worry if you don’t have much money to get one — here’s tips for getting budget life insurance), and in exchange, they hold up their side of the contract by either paying out a sum of money upon death of the insured, or paying out money at the end of a certain time period.

The two types of life insurance policies you can buy are term life insurance, and permanent life insurance (aka, whole life insurance or universal life insurance).

This guide helps explain the differences between term and whole life insurance policies.

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Reasons to Buy Life Insurance on Someone Else

There are many reasons why you would want to buy life insurance on someone else.

family sitting on couch, mother thinking about protecting everyone with a life insurance policy

For example, I’ve got a life insurance policy out on someone else – my husband.

We pay a $29/month insurance premium, and have enough life insurance to pay off the mortgage + pay for part of our son’s college in the event that my husband was to die.

Look – the whole subject sucks. But if someone dies without you guys having had the discussion, then it could really throw loved one’s lives into a tailspin (on top of the grief they’re already experiencing).

Think about if you died unexpectedly next week – who would be affected, financially? Would your spouse be able to pay the bills? Would your child be able to stay in the same school or after school activities that they’re currently in?

The following can all be reasons to buy life insurance on someone else:

  • The Person has Dependents: If a person has dependents – children, a spouse who stays home with children, an ex-spouse who counts on alimony/child support, etc. – then life insurance is a good idea. This is especially true in a single-income household.
  • The Person is Worth a Lot to Your Company: Did you know that some employers take out life insurance policies on employees? And not just the high-ranking VPs, but also on the rest of us (these policies are called janitor’s insurance or dead peasants’ insurance policies – how nice…). Business partners sometimes take out life insurance policies on each other as well, listing each other as the primary beneficiary.
  • You Co-Signed a Loan with Them: If you co-signed someone’s loans, such as for a car, or for a college education, then you might want to get a life insurance policy on them. Otherwise, you’d have to pay their remaining debt out of your own pocket.
  • You Used to Be Married to Them and They Pay Child Support: Having a requirement for life insurance in divorce decrees is common. That’s because if you have dependents who live with your ex who are dependent on your child support, who would continue helping with their living costs if you were to die?

Can You Take a Life Insurance Policy Out on Anyone?

Now we’re really getting down to it.

The simple answer to “can you take a life insurance policy out on anyone?”

Is no. You cannot take a life insurance policy out on just anyone.

There are four different parties involved in a life insurance policy:

  • the insurer (life insurance company)
  • the owner of the policy (the person who pays the premiums)
  • the insured (the person whose life the policy is for)
  • the beneficiary (the person who will get the claim paid out to them)

And each of these parties has to be involved in the process, meaning they would have to know that a person is taking a life insurance policy out on them (except if you’re a minor and it’s your parents taking the policy out on you — see section below).

Let’s take a deeper look at how knowing someone is taking a policy out on you is built into the life insurance process.

Can I Buy Life Insurance on Someone Else?

Yes, you can absolutely buy life insurance on someone else.

family out back, cheerful woman playing with daughter, father thinking about whether or not to get a life insurance policy to protect everyone

But, you must cover your bases from what we discussed in the section above. Namely, you must have an “insurable interest” in the person you want to insure. AND, you must get their consent.

In order for anyone to take a policy out on someone else, they have to go through several steps that makes it next to impossible to unknowingly take a policy out on someone else.

Step #1: Show Insurable Interest

The regulation of insurance is left to each state so the laws vary; however, generally speaking, you must have an “insurable interest” in the person you will be taking a life insurance policy out for. This is easy to prove for people that are close family, such as your spouse, child, etc.

Insurable interest means a person or an entity must have a financial stake in the person they’d like to insure, which gives them the right to attempt to protect their financial losses.

Step #2: Have the “Insured” Go through a Medical Exam (Normally)

While there are life insurance policies that do not require a medical exam, for the most part, they do. That’s because insurance companies need to know that the insured person’s health is in relatively good shape (they are, after all, in it to make money).

The cool thing is that if you find a life insurance policy through Policygenius.com, they’ll send a nurse out to conduct the exam when it’s convenient from you, in the comfort of your own home!

Step #3: Get the Signature of the Insured

Finally, you have to have consent from the “insured” (usually through signatures on important documents) in order to take the policy out on them.

Even in the case of employers taking life insurance policies out on their employees, they have to tell the employees in writing and get employee consent (you might have signed something in all that onboarding paperwork and not have known it if you skimmed through).

Can I Cancel a Life Insurance Policy My Parents Have on Me?

You should know that it’s perfectly legal for a parent to take a life insurance policy out on their child (as a minor) — AND, it’s legal for them to keep that policy once that child becomes an adult.

However, if you’re an adult, then your parents would need your consent to take a policy out on you at this point.

What if you don’t know whether or not your parents have a policy on you, leftover from when you were a kid?

Aside from just asking them, you can request a report from The Medical Information Bureau (MIB), which keeps a database of life insurance applications.

Life Insurance Policy for Parents – Life Insurance for Parents

Taking a life insurance policy for parents might be a good idea for several reasons:

  • You need to cover their funeral expenses and this would be a hardship for you.
  • They watch your kids while you go to work, so if they passed you would need to start paying childcare.
  • They have any debts you’d need to pay off (specifically if you co-signed a loan for them).

If you’re wondering, “can I get life insurance on my parents without them knowing?” The answer is no — you can’t get life insurance on a parent without their consent.

You’ll need to have “the talk” with them about your intentions (see the above section “Can You Take a Life Insurance Policy Out on Anyone?” for why they need to know you’ll be taking a policy out on them; in a nutshell, it’s because you’ll need their consent, they’ll need to pass a medical exam, and an “insured” party should know if someone is doing this. You’d want to know, right?).

But, don’t fret. There is one type of life insurance for parents’ policy that is easier to get than the others. It’s called Final Expense Insurance (aka, burial insurance — I know, I know, kind of morbid). You’ll still need your parent’s consent to get the policy, HOWEVER, they do not need to get medical exams (though there will be a few medical questions they’ll need to answer).

☑️Get Free Life Insurance Policy for Parents Quotes from Multiple Companies
A good place to start the process of getting life insurance for your parents is by getting free quotes from a number of companies through PolicyGenius.com.

Can You Get Life Insurance on an Ex-Spouse?

Divorce is messy. One of those details is, even though the two of you are separated, your finances probably aren’t. This is especially true if one spouse receives alimony and/or child support.

Woman sitting by window with cup of coffee, thinking about financial implications of divorce and whether or not to get a life insurance policy on her ex-spouse

Many divorce decrees dictate that one spouse – the one provided alimony and/or child support – take out a life insurance policy and add their ex-spouse and/or child(ren) as beneficiaries so that in the event of their death, financial obligations can still be met.

The problem with this set-up is that the spouse who is ordered by the decree to get life insurance policy on themselves might decide to cancel the policy or change the beneficiaries. And how would you know if this happened?

Granted, if this happens to you, you likely have sway in a court decision upon death. Here’s some further evidence of what happens when there’s a failure to comply with divorce decree.

Buying life insurance on someone else, and wondering can you get life insurance on an ex-spouse? The answer is yes, if you have You have an insurable interest. However, you need their consent.

Even non med-exam policies require either a pen-and-ink signature or a voice signature, which is the insured confirming their identity via voice. The insurer or agent will keep both on file. Also, policies that don’t require underwriting (such as a medical exam) are expensive — they’re generally only available for people over 50, and $25,000 of life insurance coverage could cost over $150 a month.

How Do I Find Out Is There a Life Insurance Policy On Me?

Do you suspect that someone might have a life insurance policy out on you, without your permission?

It turns out that there’s a place that keeps records of life insurance applications — though only for underwritten applications. The Medical Information Bureau (MIB) is a clearinghouse for insurance companies to deter fraud, and they keep records of life insurance applications. You can request your report from the MIB (this page explains how).

Your report will show you any underwritten applications that have been made in your name (though this won’t include any Guaranteed Issue Policies, as those are not underwritten).

Forged Signature Life Insurance Policy – How to Deal with Suspected Fraud

Do you suspect that someone else has forced your signature on a life insurance policy? If you do find evidence that someone has forged your signature in order to apply for a life insurance application in your name, you should contact the insurance company to report the suspected fraud, or contact your state’s insurance bureau.

young woman with coffee mug, looking concerned at a piece of paper - wondering if someone has taken a life insurance policy out on her

You can report insurance fraud through your state’s insurance board. The National Association of Insurance Commissioners (NAIC) also has an online fraud reporting site that is an easy way to file a report.

Frequently Asked Questions

u003cstrongu003eCan anyone take out a life insurance policy on anyone?u003c/strongu003e

You cannot take a life insurance policy out on just anyone, because most life insurance policies will require you to have an insurable interest on the person you want to insure. This means, you need to have a financial stake in their life, which gives them the right to attempt to protect their financial losses.

u003cstrongu003eHow do you take out life insurance on someone?u003c/strongu003e

To get a life insurance policy on someone, you need to do the following:u003cbr/u003eu003cbr/u003e1. Demonstrate that you have insurable interest on the personu003cbr/u003e2. Get the insured person’s approval (they’ll need to sign documents and possibly take a medical exam)u003cbr/u003e3. Choose a life insurance company and life insurance policyu003cbr/u003e4. Have the insured person take a medical exam (unless it’s a no-exam policy)u003cbr/u003e5. Sign the contractu003cbr/u003e6. Maintain your monthly premium payments

u003cstrongu003eHow can u find out if someone has life insurance?u003c/strongu003e

If you suspect someone has a life insurance policy out on you, but you aren’t sure, you can contact the Medical Information Bureau (MIB). They maintain a database of all life insurance policy records.

u003cstrongu003eCan you take out a life insurance policy on a sibling?u003c/strongu003e

You can take a life insurance policy out on a sibling if you have an insurable interest in them. This means you have a financial stake in their life, which means you have the right to attempt to protect your financial losses.

u003cstrongu003eCan my husband take out life insurance on me?u003c/strongu003e

Yes, your husband can take a life insurance policy out on you. However, he can’t do it without you knowing it, as you’ll likely need a medical exam and to sign documents to get it. You can also check the Medical Information Board (MIB), which keeps a database of life insurance policies.

u003cstrongu003eCan I take a life insurance policy out on my mom?u003c/strongu003e

If you have an insurable interest in your Mom, then you may be able to take a life insurance policy out on her. This means you have a financial stake in her life, which gives you the right to attempt to protect your financial loss. Note that she’ll likely need a medical exam, as well as to sign documents.

u003cstrongu003eCan you take out a life insurance policy on someone without their knowledge?u003c/strongu003e

It is unlikely that a person can take a life insurance policy out on someone without their knowledge, for several reasons. First, they have to show an insurable interest to the person they want to insure. Second, most life insurance policies required a medical exam of the insured. Finally, the insured person will likely need to sign documents.

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Amanda L Grossman

Personal Finance Writer and CEO at Frugal Confessions, LLC
Amanda L. Grossman is a writer and Certified Financial Education Instructor, Plutus Foundation Grant Recipient, and founder of Frugal Confessions. Over the last 13 years, her money work has helped people with how to save money and how to manage money. She's been featured in the Wall Street Journal, Kiplinger, Washington Post, U.S. News & World Report, Business Insider, LifeHacker, Real Simple Magazine, Woman's World, Woman's Day, ABC 13 Houston, Keybank, and more. Read more here or on LinkedIn.

Sue

Friday 20th of September 2019

My daughter passed away at 24. I had no Insurance. My father paid for everything. I realized the importance of insurance. For 28 years I’ve been paying for life Insurance on my two sons they both gave consent. Now my son decided he wanted to take out a loan on as he calls it HIS INSURANCE . Can I stop him from doing this. I told him that the insurance was for his funeral and to leave money for his two children. But he wants it now he said it was his policy. But for 28 years I have sacrificed so I can take care of his funeral expenses and his children.

Tony

Monday 7th of October 2019

Hi there, it is my understanding that if you own the policy and have been making payments on it, with him as the insured, it is your policy. It is not his to claim and is not his insurance. It is your insurance to cover your costs if he were to pass. Hope that helps.

Layla

Sunday 9th of June 2019

I was engaged to be married to the father of my child. In preparation for marriage he took out a life insurance policy on me for 400k. I signed the policy which clearly shows my consent. We are now broken up, but he still has this life insurance policy out on me. How can I get my name removed from the policy? I have asked him to remove it, but he has not done it and I don’t think he plans to. Please help!

Dustin

Tuesday 30th of April 2019

My boyfriend put an accident life insurance policy soon after we started dating for 500k, only after he died in an accident did I find out. I never signed anything and why so much only after only dating. I live in Georgia and was wondering if the insurance company could be at fault. He must have done something so I wouldn't know.

Aimee

Wednesday 27th of March 2019

My parents set up a life Insurance policy on me while I was a minor. I’m now 35 and have been trying to close this policy for 15yrs. My parents are divorced and I do not have a relationship with my mother nor do I want her to know my personal information. She has access to my address through this policy account and the company will not allow me to do anything about it. Can I legally close the account myself? My dad is trying to help but cannot do it without her signature. She is unwilling to cooperate.

Amanda L Grossman

Thursday 28th of March 2019

Unfortunately, from my research, it's legal for them to keep the policy on you (even though you're no longer a minor). If you move, since you're not the holder of the policy, I'm assuming they wouldn't have your current address anymore? That's because your mother would have to give them the new address...and if she doesn't know it...

Sue

Wednesday 27th of February 2019

My younger brother is an irresponsible person. Since I am probably his next of kin, I will have to pay for burying him. I have asked him to take out a life insurance policy but I am pretty sure this won't get done. He is 60 years old. I don't want to be surprise with burial expenses when he passes. But I also don't want to enable him by assuming the responsibility he should assume himself. Do I have to let him know I am taking out a policy?

Amanda L Grossman

Thursday 28th of February 2019

From everything I've read, Sue, it would be almost impossible to get a life insurance policy without his consent because he would need to sign something (at least).