Can I buy life insurance for someone else?
Yes, you may be the owner of a life insurance policy that insures someone else. Typically, there are three parties in a life insurance contract:
- The owner, who has the right to make decisions
- The insured, who’s life is covered
- The payor, the individual or entity that is paying for the policy.
However, you will need three items to be able to buy life insurance on another party: Insurable interest - there needs to be reasonable financial risk for the owner if the insured passes away Medical exam - most often, there is a medical exam required for the insured to complete Consent forms - the insured will need to sign the application and policy approval form to acknowledge their consent Some examples of individuals you can purchase policies on are: business partners, children (the one instance where you do not need their consent as long as they are under 18 years old), spouse, and parents.
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