Getting Life Insurance Coverage for Someone Else: What You Need to Know

Many people wonder if they can get life insurance on anyone they choose. The answer is nuanced: while it’s legally possible, significant restrictions exist. Insurance companies won’t approve a policy on a third party without meeting two critical conditions. You must obtain explicit consent from the person being insured, and you must demonstrate that their death would cause you financial harm. Understanding these requirements is essential before attempting to secure coverage for anyone other than yourself.

The Two Essential Requirements

Before you can get life insurance on someone else, two conditions must be satisfied simultaneously.

First: Obtaining Consent

It’s illegal to purchase a policy covering someone without their knowledge or agreement. This legal safeguard prevents insurance fraud—the scheme of insuring people’s lives without their permission to collect benefits upon their death. The only exception is for minor children, where parents or legal guardians can act on their behalf. To prove consent exists, insurance underwriters will require a signed authorization form from the person being insured. Beyond signing, that individual must participate fully in the underwriting process, which typically includes medical examinations and detailed questionnaires about their health history.

Second: Demonstrating Insurable Interest

The second requirement is proving you have what’s called an insurable interest in the other person’s life. This means you would suffer direct financial or emotional loss if they died. You’re essentially establishing that their death would negatively impact your wellbeing or finances. This must be convincingly demonstrated to the insurance company’s underwriting department. Without satisfying this requirement, your application will be denied regardless of consent.

Who Has the Right to Obtain Coverage

While restrictions apply, several categories of people regularly obtain life insurance on others. Each relationship typically presents a clear insurable interest.

Spouses One spouse can purchase a policy on the other, particularly when one partner is the primary earner. Should the wage-earning spouse die, the surviving spouse would face immediate financial hardship. However, the purchasing spouse must have the income or assets to pay ongoing premiums.

Parents and Guardians Parents, grandparents, and legal guardians can insure children and designate themselves as beneficiaries. This protects against future insurability issues—if a child later develops a chronic illness or medical condition, they might become uninsurable at standard rates. Locking in coverage early ensures the child remains insurable.

Business Partners Co-owners often insure each other’s lives to protect the business partnership itself. If one partner dies unexpectedly, the other receives policy proceeds sufficient to either continue operations or purchase the deceased partner’s stake from their heirs. This prevents forced business liquidation during a crisis.

Key Employees Companies can insure the lives of critical employees whose unexpected death would create significant operational or financial disruption. This coverage protects the business from the specific financial consequences of losing essential expertise or leadership.

Creditors Lenders or creditors can take out policies on borrowers to ensure that if the debtor dies, the policy benefit satisfies the outstanding debt. This protects the creditor’s financial interests.

The Approval Process Explained

Getting a policy approved requires navigating the insurance company’s underwriting process. It’s more stringent when getting life insurance on anyone other than yourself.

The proposed insured must complete detailed applications, answer health-related questions, and often submit to medical examinations. The underwriting team will request documentation proving your insurable interest—correspondence showing financial dependence, business agreements, loan documents, or family relationship verification. You’ll be required to explain precisely how the insured person’s death would affect you financially or emotionally.

Insurance companies take these requirements seriously because they’re designed by law to prevent fraudulent policies. If underwriters cannot verify both consent and insurable interest, they will reject the application.

When It Makes Financial Sense

Though unconventional, obtaining coverage for someone else can be strategically sound in specific circumstances.

For families, life insurance on a breadwinner provides financial security. If the worst occurs, the surviving spouse and dependents won’t face immediate economic crisis. The family can maintain housing, pay bills, and sustain their standard of living during the grieving period.

In business contexts, this type of coverage prevents catastrophic outcomes. Rather than forcing a business sale to pay an heir’s inheritance claims, partners can use insurance proceeds to maintain continuity. For companies dependent on specialized talent, coverage prevents operational collapse when a key person dies.

Bottom Line

Life insurance offers a legitimate financial tool for protecting yourself against loss when someone else’s life is critically important to your wellbeing. Whether you can get life insurance on anyone depends entirely on two factors: securing their informed consent and proving you’d face genuine financial or emotional consequences from their death. These safeguards exist to prevent fraud while allowing responsible individuals to protect their financial interests through properly structured policies.