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If you are worried about someone buying a life insurance policy on your life without your knowledge, you can most likely rest easy.  First of all, it isn’t legal, and there are systems in place to prevent this from happening.  Now, is it absolutely impossible that some kind of sophisticated fraud has taken place?  Of course not!  But life insurance companies are extremely sensitive to rooting out any fraudulent activity like this.  Chances of someone doing it successfully are very low!  And their chances of them ever collecting money upon your death are even lower.

It Is Illegal to Obtain Life Insurance Without Consent of the Insured

Can You Get a Life Insurance Policy on Someone Without Them Knowing?The most important piece to remember is that while life insurance laws are state-specific, every state requires that in order to take out a life insurance policy, the “insured” person provides their consent.  Without valid consent, the life insurance contract is void. In order to obtain the contract, the owner would need to apply using the social security number of the insured person, the name, address, and also the insured person would need to sign a number of pages in the document.

If someone somehow forged the signature and was able to successfully obtain a policy on someone who did not consent, it would constitute insurance fraud.  Insurance fraud can be punishable with fines and jail time.  It would also probably bring the life insurance company under regulatory scrutiny.  If someone was to obtain a policy without consent, it is a very serious matter that would involve the police, the court system, and the regulatory insurance bodies governing life insurance companies in the state in which they operate and issue the policy.

It Is Impractical

Not only is it illegal, but it is also impractical.  Most life insurance policies require that a medical exam be performed.  The medical exam typically requires an in-person examination and interview.  Furthermore, medical records are normally requested by the insured person’s physicians.  The insurance company also will likely perform a check of the address provided for the insured person to make sure they live in the address provided, and they will issue a notice to that address when the policy is issued.  It is difficult, though of course not impossible, for someone to accomplish all of this without the insured person noticing that a policy was issued on their life.

It May Not Actually Pay

Even if a policy was somehow issued without the consent of the person whose life it is written on, life insurance companies have entire departments dedicated to making sure that death claims are paid out appropriately.  At the time of death, an original death certificate usually needs to be provided to the insurance company along with other documentation.  These departments are adept at identifying fraud.  Not only that but today there is also help from technology in identifying possible fraud.  If there is any reason to suspect fraud has occurred, the claim will be passed to another special department that investigates fraud.  Upon investigation, they will do things like compare signatures on the application to other known signatures, interview family members, and even go so far as to hire private eye detectives.  Without valid signature and consent from the insured person, a life insurance contract is not valid, just like any forged document.

If you purchase a life insurance policy on someone who is not aware, the death claim will likely never be paid.  Furthermore, if fraud is suspected the life insurance company will bring in the local authorities, even if the person who committed fraud lives outside of the United States.  So it is a lot of risk, a lot of sophisticated procedures and fail-safes standing in your way, and very little chance of an actual death claim payout.  Put simply, it is not worth the effort.

That being said, it is still legal to purchase life insurance on another person who is not you as long as there is valid consent.  In order to do this, you will need to satisfy some requirements.

Who Can You Legally Purchase Life Insurance on the Life Of?

In order to purchase a life insurance policy, you must prove that there is what is known as insurable interest.  An insurable interest means that the purchaser of the policy would be financially harmed by the death of the person who is insured.  There are a number of connections that create an insurable interest.

You are always assumed to have an insurable interest in yourself.  You can purchase life insurance on your own life freely.  You are also assumed to have an insurable interest in a direct family member such as a spouse, child, or parent.  Getting further from the family nucleus, an insurable interest could exist on the life of a caretaker or guardian who is not a parent or the child they are in the custody of, a business relationship such as key man life, or even a creditor or lender.  Every state issues guidelines for determining if an insurable interest exists between the beneficiary of a life insurance policy and the insured person.

Again the insured person must provide their consent for the policy.

To Purchase Life Insurance for Another Party, You Will Need:

So to recap, you can not take out a life insurance policy on someone without their knowledge, and no one should be able to do it to you.  In order to have a valid policy, the owner must:

  • To clearly illustrate your insurable interest. In other words, you will have to show why you want to insure the individual. Insurable interest indicates that you have a financial stake in the individual you are insuring; for example, your spouse is the sole provider of the family and you and your children depend on his income.
  • To get the approval of the person being insured. Before an insurance company will issue a policy, they will need the insured to sign important documents; in other words, they will have to issue their approval for the policy.
  • A medical examination for the insured party. Most insurance providers will require a medical exam before issuing a life insurance policy to determine the risk of covering the individual.
  • Pass through underwriting without needing additional requests that can only be met by the insured person.

And even if someone does manage to commit fraud, and to take out a life insurance policy, they probably will not be able to collect the death benefit.  Today, it simply does not make sense to try to sneak this past the insurance companies given the risks and low probability of success.  If you suspect that someone has taken out a life insurance policy on your life without your consent, please present your information to your state’s life insurance regulatory agency.

49 Comments

  1. I suspect my brother and his wife has taken out a insurance policy on my life..
    Name of Byron R, H***…Brother
    Name of wife Gloria Ivy H***..wife of brother
    Wife employed as school teacher in the state of Georgia…

    1. Hi Lavelle. It would be difficult, though not impossible to commit this type of fraud in 2019. If you suspect this to be the case, you need to report it to your state insurance bureau. Laws are very strict regarding this activity and it is highly illegal.

    2. A lot of “targeted individuals” may have illegal life insurances taken out of them. Just a few weeks ago, somebody fraudulently used my credit card to try and take out life insurance in India of all places and I’m an American. A lot of people are being targeted in this human trafficking scam worldwide.

    3. I believe that my wife Tiffany Marie Martin has taken out a life into policy on me Christy Michelle Martin we are getting ready to file for a divorce and she has all my critical information that she would need to do such a thing. How would I go about finding out if such a thing has taken place?

      1. You can look here https://www.lifeant.com/faq/how-can-you-tell-if-somebody-took-out-a-life-insurance-policy-on-you/. This resource also may help: https://eapps.naic.org/life-policy-locator/#/welcome. You can also try to locate records of which insurance company it is and call them. Somehow the policy needs to be paid, can you see check records, bank records, credit cards, ect to find the source of the money and who it is paying?

  2. Person is married for 4 years, spouse lives a questionable life style, can the other spouse obtain life insurance policy without signature of the spouse with the questionable life style? Also, adult child has parent without life insurance, is it illegal for child to start life insurance for the parent so that they would not be left holding the bag (responsibility) for parent burial proceedings without signature?

    1. Hi LaTonya. Great questions! It is illegal to obtain life insurance on someone’s life without their consent. So no, one spouse can not get life insurance on the other without them knowing about it. Same goes for the child. Keep in mind that just because someone is the “insured” person on the policy, it does not mean that they have to own the policy. The other spouse, or the child, could own a policy and make payments on it, they just need the consent of the insured person to have their life insured.

      1. I recall seeing (I believe it was “60 Minutes” ) an expose-regarding WALMART taking out life insurance policies on their employees. (without consent)

        Have laws changed since then?

        Comment?

        1. Hi Shelley. There was a lawsuit regarding company-owned life insurance and Walmart, but it was not over whether or not employees had consented to the insurance (they had). In this case, the estates of the employees was seeking recovery of the claims money from Walmart. In actuality, IRS Code 101(J) requires written consent from employees for the life insurance premiums to be tax-deductible, and in addition the Pension Protection Act of 2006 requires the company to get written consent from employees and to keep it on record (this went into effect after the Walmart case where the purchase of policies ceased in the year 2000). So no it is not possible. In the year 2019, this loophole has been closed.

        2. Can my wife’s parents collect life insurance after she passed without me knowing

          1. Sure, if they were named as the beneficiary on a policy, the spouse does not have any right to the money.

    2. My dad was killed recently cause of dath claimed.as suicide. My unvle hus bro has been a parter in an insurance Co and has beej a licensed insurance sales agent for decades.he has in his cirle of associated first cousins practicing law, also law enforcement on state level. I wasn’t allowed an autopsy, a last look fter finding the body or any sort of insurance, legal, physical explanation for death. I know that there was a will ( with our cousins law firm) that had not been completed and was said to never have been legalgally viable i was accused of having envolvement in his death for supposed insurance gains. How can i find enough questionable material to ask for a exhumatiom of his body afyer having left the state due to legal harassment and efforts to keep me quiet?0

      1. Hi Candy,
        There’s a lot of the situation that is unclear but your best option is probably to speak with an attorney. If you suspect some type of fraud or foul play in your father’s death and that you are being made to be the scapegoat, then you definitely need to speak with an attorney.

  3. A friend of mine purchased a life insurance policy naming her former husband as the insured, which he agreed to following their divorce, and for which she has paid the premium. The policy was for $1M, which represents just over 11 years of the spousal support he was paying ($90K per year.) He recently died very unexpectedly, and my friend stated that even though he agreed to the policy, he was unaware of the amount. Is this possible? If he agreed to the policy, passed the medical exam, and signed the documentation required, how is it possible for him NOT to know the policy was for $1M? She claims that as long as he consented to the policy, it’s not required that he be informed of the amount she has insured his life for. This doesn’t sound very transparent to me.

    1. Hi Karen. It seems highly unlikely that he did not know the amount, though he may have forgotten. The application would have listed the amount of insurance being applied for.

  4. My mother passed an i just found out she had a life policy on me however she passed an has my sister name as beneficiary whom is someone who i have no contact with an who is not in my best interest whom had no prior knowledge of he policy ,the inc company said there is nothing i can do about it , i o not give my concent on this policy if it does not benefit my children

    1. Hi Brian, if you can prove that you never provided consent and somehow your consent was forged, you may be able to get the policy rescinded. Otherwise, if you do not pay or own the policy you, unfortunately, do not have any recourse.

  5. Hi. If you take out a policy on someone’s life (with their consent) and you pay all the premiums and you are named as the sole beneficiary, would you need to provide insurable interest when claiming (when the insured passes away)? I know their needs to be insurable interest when the policy is taken out but do you need to do it again at claim stage?

    1. Hi Elmare, great question! No you do not need to prove insurable interest after the policy is issued.

  6. My sister in law and mother in law stole copies of my moms death certificate. Now I’m suspicious that they had taken out a policy on her without her consent. How do I have them investigated?

    1. Well you can report them to the insurance bureau in your state, or call the FBI. If they did take out a policy and paid it, it probably doesn’t hurt you in any way. Are you worried that foul play was involved in the death? It would have been tough for them to get a policy issued without your mother’s consent so the certificate is probably for something else.

  7. Hi,
    My sister does not work and is constantly in financial trouble. I have given her
    loans that she will never pay back and I will be 100% responsible for her funeral
    costs if outlive her. Is this a valid reason to get a life insurance policy on her with her consent?

    1. You can not get a policy without her consent. The question is why would she withhold consent? If you pay for the policy it does not detract from her life in any way. You have an insurable interest in her both as a lender and as a direct family member.

  8. My childs father has been shot at twice in 2 weeks & I think he may be involved in illegal activities… Is there NO WAY to get life insurance on him for her??

    1. You would need his permission to have a policy issued and he may need to take a paramedical exam. A bigger issue is that his illegal activities may cause a life insurance company to not issue a policy, depending upon his criminal record and their suspicions based upon his medical records. Lying on an application can be grounds for a company to deny a claim.

  9. when my husband and brought our house I got a life policy on myself with him beneficial. and one on him with his consent with me as beneficial for mortgage protection..im paying both policy..now in argument he treats to cancel policy..can he cancel after he has given consent and after I’ve paid so much into it

    1. You can contact the insurance company, law enforcement, and insurance bureau in your state. I would recommend seeking shelter if you are worried that your spouse poses a danger to your and your children.

  10. in addition..on both policies I’m owner and are paying myself..now my husband threatens to cancel the policy that I have on him with his consent..can he just change he mind and cancel?

    1. No, if you are the owner, the insured person can not cancel the coverage

  11. My friend’s ex-husband has a life insurance policy on her (established during the marriage). The divorce was ugly and they are not amicable. Would he be able to collect on her death?

    1. As long as he is still the named beneficiary, and the divorce decree did not give other instructions.

  12. My husband passed in early November when my mother in law went to the Funeral Home she took his life policy with her needless to say the Funeral Home told her that the policy wasn’t any good
    Why & how could that be

    1. Hi Pamela,
      It’s difficult to provide an answer without knowing exact details of the situation and the policy. It’s possible that the policy had lapsed a long time ago and wasn’t in force anymore, or perhaps it was a 20 or 30 year term policy that had expired.

  13. I’ve been working all my life. Unfortunately, my two kids are not doing well for themselves. Can i buy life insurance for them if the live in another state? They both have high blood pressure. But i am buying insurance for myself so if something happen to me they will be set. And honestly, I feel kind of uncomfortable around one of my kids. Let’s just say I don’t feel safe so that’s why I distant myself.

    1. Hi Cheryl,
      It’s not real clear what you are asking, but yes, you can buy life insurance for your children, even if they live in a different state. If you are buying them a policy and designating you as the beneficiary, then you’ll want to get their approval. You’ll want to get their approval no matter who the beneficiary is, because you’ll also likely need to involve them in the application process, but you can buy the policy and pay for it on their behalf.

  14. My book club just read Furious Hours and we’re curious about when and why the laws changed so that you can no longer take out a policy on someone in secret. (This occurs in the book.)

    1. We don’t know the year the law was first enacted in the United States! Traditionally, this was governed by each individual state, which required an insurable interest in order to take out a policy. In 2010, Stranger originated life insurance (STOLI) laws were enacted federally. However, this law does not cover someone who does have an insurable interest, but not permission to obtain a policy. We will research further unless someone in our community knows the answer!

  15. Rebecca Whetstone

    My mother just found some life insurance documents stating that both her and my baby brother each have an active life insurance policy that lists them as the insured, each with their own policy numbers. My mother’s roommate is the person who applied for both of policies. He is responsible for paying the monthly premiums as they were approved and issued with him being both the owner and the beneficiary of the policy amounts. My mother was not aware of these policies being issued until today, and while I was looking over the copies of the applications, my mother’s signature was forged on the application where the “proposed insured” is required to sign. Who do we contact regarding the forged signature on an approved and active life insurance policy my mother did not give consent to that her roommate took out on her without her ever knowing???
    .

    1. Call the life insurance company regarding the fraud (each company has a specific fraud department who works closely with law enforcement). You should also notify the bureau of insurance in your state.

  16. I hold concern a fraudulent life insurance policy was filed on me without my consent or awareness; my signature and other data forged. This action taken by a sibling who has a history of hostility toward me for all my life; and whom my mom appointed as power of attorney for her, which expired upon her death, however something was said to me by another family member that as power of attorney my sister convinced my mom to take out a life insurance policy on me with her (said sister) the beneficiary. Just prior to my mom’s death she told me she suspected my sister had been exploiting her trust as well as her bank accounts, thus I have just cause for this distrust of my sister. Given I live in a different state, how do I discover if this is true; what gov’t agency must I call? Is this worthy of contacting the FBI about? Much obliged for your expertise.

    1. Hi Max,
      First you should contact your State’s Life Insurance Regulatory Agency, which has a link in the above article. It’s a part of your state’s department of insurance. Notify them of the situation and they can tell you the next steps. It is illegal to do what you suspect your sister has done and it likely will never even work for her, but it’s best to contact the authorities.

  17. My mother just passed away on January 9, 2020 and after an ugly family battle over her care with one of my sisters, she was granted guardianship over my mom. A few family members and myself feel strongly that she may have talked my mom into letting her get a life insurance policy on her prior to her death. Could she have gotten a policy on our mom by being her guardian? She was also already her medical power of attorney before all of this.
    Thank you.

    1. It is unlikely that a life insurance company would issue a policy on someone with such a short life expectancy. Technically she could have with guardianship and power of attorney. If she did, it is perfectly legal assuming that she did not contribute to her death at all and no fraud was committed on the application.

  18. My father passed away last November. I was named beneficiary on his life insurance policy since 2009. I was the only child out of 6 to visit him and talk to him regularly. I found out the day after his passing that he had “supposedly” changed the beneficiary to my sister a month prior to his passing. I hired a forensic document examiner to compare signatures and chelc for forgery. She agreed with my hunch. I made the insurance company aware of this possible forgery and sent them several of my fathers signatures to compare. They told me they Willis have their legal dept look into this. Well, almost a year later the insurance company now has filed suit for interpleader. I hired an attorney and they just informed me the ins wants to be released form suit and wants $1,000 of the policy money as well. My attorney agreed with this but I DO NOT. It’s obvious my sister forged my fathers signature. I have a credible expert examiner to back this and if they had done their job in the first place b checking signature then none of this would be happening. Their are certain procedure set in motion by these deep seated ins companies for this reason, but they did not follow through. Plus, when this supposed change took place, their was not a witness or notary which they say is their policy when a change in beneficiary is made. How can my attorney urge me to pay the insurance company and let them off the hook??

    1. Your best bet is to speak with the insurance bureau in your state. The life insurance company may be forced by them to reconsider the fraud.

  19. I am currently going through a divorce and I am from upstate New York. I have found out that my wife had taken out a life insurance policy on me through her company a few years ago without my knowledge. My attorney says that it is no big deal as it was for under $8,000.00 and I should not pursue it. I fell that my wife, her company, the agent and the insurance company should be held responsible. All of my research shows that this is an illegal activity. What is my recourse and who is responsible for allowing this to happen. Do I have any legal ground to stand on. If so can you recommend an attorney?

    1. Hi Jim, if your ex-wife fraudulently took out a life insurance policy in your name it is illegal. The insured person needs to give their permission on a policy. I don’t know that you will win any money or the policy, but you may force the life insurance company to cancel the policy and hopefully return all premiums paid. I would start by contacting the life insurance company and notifying them of the fraud, and you can escalate the case to the bureau of insurance in your state. Your attorney is correct though, she was your wife at the time and it is only $8k, you need to weigh if it is really something worth pursuing. If it is, good luck with the case!

  20. I just recently found out that my grandmother got life insurance policies for myself and two siblings. she took out loans on all the policies. My siblings and I had no idea she got these policies and she now asked us to contact the insurance company asking how much is owed on the loans etc… I know she got mine in the early 1980s i’m in my 40s now. I guess this is one of those pay 2 cents a month type policies and it’s only worth 350 with a loan against it at 348$ I was told since the policy is in my name and i’m a legal adult i’m responsible for the loan in the event she doesn’t pay this off before her death. I’m confused on how she was allowed to do this and why I wasn’t contacted DIRECTLY after I became of legal age. I just want to know if this is legal and how I as well as my siblings can get this responsibility that wasn’t ours out from under us ?

    1. You may want to consider not paying the loan. You do not need to pay anything, the policy will just be worthless. Why bother paying?

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