Why Can’t I Take Out a Life Insurance Policy on Anyone I Choose?

To take out a life insurance policy on someone, you must have what is known as an “insurable interest” in that person. This is in order to prevent life insurance from being used for nefarious purposes, such as taking out a life insurance policy on a stranger without his or her knowledge and then hoping to cash in on it, or worse yet, cause their death. Insurable interest means the person for whom you are purchasing the insurance must be a spouse or other close relative that you rely on for some support, or whose death would cause you financial or other personal harm. For the purposes of purchasing life insurance, all persons are assumed to have insurable interest in their own lives. Generally speaking, even if a person has an insurable interest to you, such as a spouse, or business partner, you cannot take out a life insurance policy on him or her without his or her knowledge.

Affordable Life Insurance Rates
Are Waiting For You!
Choose Your State

Related Information

Spouse Life Insurance Definition

You can buy a life insurance policy on behalf of your spouse or partner. Find out how this type of insurance works and how to purchase it.

Read More

Do You Have To Have Life Insurance With A Mortgage?

You aren't required to have life insurance to get a mortgage, but having a life insurance policy while you are making mortgage payments could be beneficial.

Read More

Final Expense Life Insurance Policies

Final expense insurance is a type of life insurance designed to cover funeral costs and other end-of-life expenses.

Read More

Calculating Your Life Insurance Needs

Before purchasing life insurance, calculate how much money your family will need if you die unexpectedly. Learn how to evaluate your life insurance needs.

Read More

How Life Insurance Payouts Work

How does term life insurance payout? Learn how to claim your financial benefits from a life insurance company.

Read More

You Can't Buy Life Insurance On A Parent Without Their Consent

Purchasing a life insurance policy on a parent cannot be done without their consent. Trying could be an act of fraud.

Read More

Do I Pay Income Tax as a Life insurance Beneficiary?

Income to a life insurance beneficiary is not typically taxed by the federal government, but there are some exceptions if interest proceeds are involved.

Read More

Shopping for Life Insurance? This Guide Can Help

Life insurance can be a crucial form of financial protection for your loved ones. Here's what to consider if you're shopping for a life insurance company.

Read More

How to Make a Life Insurance Claim

Follow these 3 simple steps to make a life insurance claim.

Read More