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Can someone remove life insurance?

June 3, 2025 11 Min Read
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Can someone remove life insurance?

Life insurance is usually taken out by individuals whose life is insured. But that’s not always the case. If you already have a life insurance policy for yourself, you may wonder if you can take away life insurance for your spouse, relative, or business partner. As long as you can prove it, you can usually take out life insurance to someone you are interested in getting insurance.

Can I use life insurance for someone else?

To take out life insurance from someone other than yourself, you need to have financial interests in their lives. For example, it is impossible to take away life insurance from sick politicians and athletes in high-risk sports. Betting on someone’s life is not only unethical, but also financially unwise for a life insurance provider to undertake this type of coverage.

It is possible to take someone else’s life insurance if:

  • There is some kind of relationship between you, whether you are a business partner, a spouse, or a parent.
  • Those who have insurance will be taken along with life insurance.
  • The relationship passes the “insurable profit” test. This means that you can demonstrate that the death of the insured will have a negative effect on you.

For example, one spouse can purchase life insurance for another spouse because they rely on each other’s income. Additionally, employers can obtain life insurance for employees as losing employees can cause financial damage to the company.

How life insurance works

If you are considering taking away life insurance for someone else, it is important to understand how insurance works. In the first place, when purchasing a life insurance policy, there are three parties involved.

  • Insurance policyholder: The policyholder is the owner of the policy and is permitted to pay premiums and make changes.
  • Insured: This is someone whose life is insured by policy. Policy death benefits are paid upon insurance death. This was a proactive policy, premiums paid, no evidence of fraud or criminal activity, and death was not the result of suicide during the 1-2 year exclusion period.
  • Beneficiaries: This is the person or people listed in a life insurance policy where the insured receives death benefits when the insured dies. The beneficiary can also be a trust, real estate, or an organization.
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In many cases, the insured and the policyholder are the same person. However, there are situations where someone may want to take life insurance from another person. Bankrate’s insurance editorial team conducted research to help them understand the process of stealing life insurance from someone else.

Who can get life insurance?

In most cases, you need to prove that you suffer financial losses or suffer financial difficulties as a result of the death of someone who wants to buy life insurance. It is common to purchase life insurance for the following individuals:

  • Spouse or life partner
  • Adult children
  • Business Partners
  • Former spouse or life partner
  • Grandparents
  • Minor children (under 18 years old)
  • parent
  • Brothers

However, not all life insurance policies require financial relationships. Some insurance companies may be willing to write policies based on emotional or sentimental relationships, such as between grandparents and grandchildren, or between siblings. If there is no financial need but is involved in a caregiver relationship, insurable benefits may be established between the parent and the child or spouse. An unemployed spouse can also obtain life insurance as the losses will result in financial burdens.

Keyman Insurance has another type of insurance relationship established. This type of policy acknowledges the importance of founders, owners, management, or required employees or business employee groups. In this case, the reason is that such individual losses cause financial difficulties for the company, thus making them an effective hedge to buy the company to decide on the next step.

How to get life insurance for someone else

Although each insurance company has a different underwriting process, there are some general steps you will need to take to buy life insurance for someone else.

Select the type of life insurance

The first decision is whether permanent or temporary compensation is required. Term life insurance is generally cheaper than permanent life insurance and is a temporary solution for a certain period, such as 10, 20, or 30 years. Full life and universal life insurance is a type of permanent life insurance designed to continue your entire life, as long as you build a cash amount that can also be paid and used to borrow or withdraw money.

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Get quotes

No matter what type of life insurance coverage you need, we recommend shopping quotes from several life insurance companies to find the best prices and conditions. According to the Insurance Information Institute (Triple-I), it is beneficial to get multiple estimates as prices for the same type of coverage may differ from carrier to carrier.

This is especially true if the insured has an existing condition, such as diabetes or heart problems. Long-term illnesses like these are likely to affect your rates, and insurance companies will charge more to cover their increased risk. However, since all carriers have their own way of determining risk, there is a possibility that shopping will occur for carriers who have less policy billing than other companies.

Get permission

When it’s time to apply for compensation, the next step is to get permission from the person you plan to guarantee. They should sign the consent form and perhaps get a medical checkup before the policy is approved. Telephone interviews between insured persons and carriers are not unusual as a way to ensure that insured people are satisfied with their policies and verify information about their applications. Even if a policy is chosen that does not require telephone interviews or health checks, if you are unable to obtain consent from the person who has guaranteed it may be considered an insurance fraud.

Prove that you have insurance

“Insurable profit” is the term used to indicate that death leads to you or another beneficiary suffering financial losses. Generally, you need to prove that you have an insurable interest in purchasing life insurance. Below are some examples of relationships that you may be interested in getting insurance.

  • Spouse Relationship: As they generally share financial obligations, it is hardly difficult for most spouses and life partners to prove their insurable interest. In some cases, if the child’s custody is shared, the ex-spouse may also have an interest in insurance-free.
  • Parents and children: If parents rely on the financial support and care of an adult child, or vice versa, there is an insured interest.
  • Business related: Essential employees or business partners may take out insurance if the losses have a significant financial impact on the company.
  • Siblings or other family relationships: Other family relationships may have insurable interest, especially if family members provide care or financial support.
  • Creditor Relationship: Although not common, lenders may be able to demonstrate insurable benefits to borrowers if their debt is important and their death affects repayment.
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Proving family relationships is generally not difficult by interviews and checking medical or personal history. For non-marriage partners, rental agreements or joint mortgages can be accepted evidence. In business relationships, documents such as contracts may be required to prove the relationship.

When to buy life insurance for someone else?

Some circumstances allow life insurance to someone else to be a wise financial decision.

Protect your family financially

For those raising children together, life insurance can compensate for losses in income if one of them dies. The life insurance for elderly parents can provide cash to pay off any remaining debts or cover burial costs. Families with higher net worth may want to consider life insurance paying real estate taxes.

Ensuring business continuity

The death of a business partner or a key employee can put the company’s operations at risk. Life insurance payments do not replace individual skills and knowledge, but can provide capital to adopt exchanges and cover significant costs while adjusting the business to remain viable.

Guaranteed future coverage

Some families have a history of genetic conditions and chronic diseases that make it difficult to obtain life insurance coverage. Permanent life insurance for children or young adults purchased while still healthy will guarantee coverage for the entire life expectancy, even if diagnosed with future health conditions.

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