Is it legal to get a life insurance policy on someone without that person knowing about it?

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Is it legal to get a life insurance policy on someone without that person knowing about it?

Asked on November 24, 2011 under Insurance Law, Missouri

Answers:

M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

When you buy life insurance on another person, you must have what is known as an "insurable interest" in the life of that person. Accordingly, when you apply for insurance, the insurer checks to make sure that this interest exists. Further, the person you are insuring must know that you are insuring their life.

Specifically, as to the an insurable interest, this is created when you have a personal and/or economic interest in the life of the person to be insured. This means that the person's death would cause you either personal and/or financial loss. For example, if you are insuring your own life, or the life of your spouse or your child.

As to consent, the person being insured must have given their permission prior to the policy being issued. Typically, there is a section in a life insurance application that indicates the insured individual's name. If this name differs from the policyholder's name, then the insured's signature is required. Additionally, most times (but not always) a health exam is required on the life of the insured; they would find out about the insurance then at the time of the exam or at least when it is scheduled.


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