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. However, you can’t buy a plan for anyone without an insurable interest and consent from the person you are buying life insurance for.¹

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.¹ Read on to learn more about how to life insurance works and how to get a policy for someone else.

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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 usually 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.² 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.² If the policyholder passes during the term, the beneficiary receives the death benefit. Term life insurance plans are usually cost-effective, and premiums typically stay the same throughout the life of the plan.

On the other hand, whole life insurance typically lasts the policyholder’s entire life. Part of the premium payments usually 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.²

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How to Buy Life Insurance for Someone Else

To get a life insurance policy for someone else, you usually need to first prove insurable interest. 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 insured person’s only role in the policy is to go through underwriting. ¹

From there, you can fill out an application form that clarifies your benefits and how the life insurance policy functions. The life insurance 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, however, they may need to answer 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.

Who Can You Take Out a Life Insurance Policy On?

While you can’t take out life insurance on just anyone, you can apply for a plan for someone else if all criteria is met. There are a handful of people you may be able to prove you have an insurable interest for more easily:¹

Your Spouse: It’s not uncommon to take out a life insurance policy for a spouse if you and your loved ones rely on them financially.
Your Business Partner: If you have built a business with someone else and they were to pass suddenly, it may leave your venture in a tough spot. Taking out a life insurance plan for your business partner may help protect your work.
Your Parents: If you rely on your parents for financial support or may be responsible for their final expenses, it may make sense to help them get a life insurance plan. Some life insurance plans, like Aflac Whole Life Insurance, can also help cover the costs of funerals and ceremonies.
Your Child: Instead of insuring someone you rely on financially, the reasons for taking a life insurance policy out on a child are different. Instead, you can help your child get life insurance early in life to protect their future insurability or to provide some money for them through the cash value account.

Aflac Offers Life Insurance

While you can’t take a life insurance policy out on anyone, you can get a policy for someone else if you have an insurable interest. If you’re interested in getting life insurance, Aflac offers term and whole life insurance plans for the people you care about most. You can get a life insurance plan for yourself or someone close to you if you have their consent and show you have an insurable interest. Get a quote today to understand your life insurance coverage options more in-depth.

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