Can You Take Out a Life Insurance Policy on Anyone?

The simple answer is yes—you can buy life insurance for someone else if they agree and are aware of the decision.¹ However, you can’t buy a plan for anyone without an insurable interest and consent from the person you are buying life insurance for.²

Insurable interest is present when you can prove to an insurance provider that it would be financially harmful to you if the person you aim to take a policy out for passes away. Simply put, you must prove that you rely on someone else while they are alive and would suffer financially if that person died.³

How Does Life Insurance Work?

Before we dive into buying life insurance for someone else, it’s crucial to understand how life insurance works. In a nutshell, a policyholder purchases life insurance to help ensure their loved ones have financial protection after they pass. The policyholder pays regularly scheduled premiums to ensure their beneficiary receives the death benefit or predetermined cash payout.⁴ The beneficiary is the person chosen to receive the death benefit after the policyholder passes.

Aflac offers two life insurance plans, term and whole life. Term life insurance provides coverage for a specified period, like 10, 20 or 30 years.⁵ If the policyholder passes during the term, the beneficiary receives the death benefit. Term life insurance plans are usually affordable, and premiums typically stay the same throughout the life of the plan.

On the other hand, whole life insurance lasts the policyholder’s entire life. Part of the premium payments go toward the standard death benefit, and another portion goes into an investment-like benefit known as the cash value. In some cases, like in Aflac Whole life Insurance, policyholders may be able to borrow against the cash value in the form of a loan.⁶

How to Buy Life Insurance for Someone Else

After you have proven that you have an insurable interest, you need to show that you have consent from the person you are trying to insure. The person the life insurance policy is for must be present for every step of the application process.⁷

From there, you can fill out a straightforward application form that clarifies your benefits and how the life insurance policy functions. The application may ask you who the beneficiary is, who the policy is for and how much coverage you would like. At Aflac, the person being insured may not be required to have a medical exam completed by answering a set of questions instead. Requirements vary based on the different levels and options. There may also be different requirements based on the state of residency as well.