Who Can Buy a Life Insurance Policy on Me?
A life insurance policy protects your family from your financial debts after you die. But, what if you aren't the one buying the policy on your life? Other people may purchase life insurance on you in certain circumstances. Don't worry though, there is an important restriction that prevents someone from buying life insurance on you without your knowledge.
Other People Are Reading
-
Spouse
-
Your spouse may need to be protected if you predecease her. Money that replaces your income may be needed. Life insurance to cover this and any shared expenses may be bought. The life insurance company is generally going to be very generous when it comes to spouses buying life insurance on each other, since there is an assumed personal and economic interest in the life of your spouse.
Business Partner
-
When you go into business with someone, you have to make continuation plans. A continuation plan is a plan that outlines what happens if one of the partners dies while the business is in operation. A buy/sell agreement is drafted by a lawyer. Life insurance is used as the funding vehicle. The death benefit buys out the deceased partner's half of the business allowing the business to continue uninterrupted.
-
Children
-
Your child may purchase life insurance on you. Generally, this is done to provide burial money and money for funeral services. This type of policy is important if you don't have life insurance or if your insurance is insufficient to pay for final expenses. Your child may not have enough savings to pay for your final expenses. Thus, the insurance company allows the purchase of life insurance in situations when it is deemed appropriate for the children to have insurance on their parents.
Limitations
-
Regardless of who purchases life insurance on your life, you must consent to the purchase. Life insurance companies do not allow random strangers or even family members to buy life insurance on individuals without the person's consent. You must sign the application. You typically have to submit to a health exam, as well.
-
