How to Buy Life Insurance for Someone Else

Shawn Plummer

CEO, The Annuity Expert

Buying life insurance for someone else is possible, but it involves certain legal and ethical considerations, primarily revolving around ‘insurable interest’ and consent. Here’s how you can go about it:

1. Understand Insurable Interest

  • Definition: Insurable interest exists when the policyholder would suffer a financial or emotional loss in the event of the insured person’s death.
  • Examples: Typically, insurable interest is found in relationships like spouse, child, parent, or business partner.

2. Identify the Relationship

  • Close Relations: You can usually buy life insurance for a spouse, child, or parent because these relationships naturally imply insurable interest.
  • Business Relationships: In some cases, business relationships can also qualify, like insuring a business partner or a key employee.

3. Obtain Consent and Knowledge

  • Legal Requirement: The person for whom the insurance is being purchased must know and consent to the policy.
  • Application Process: They will likely need to be involved in the application process, especially for answering health-related questions or undergoing a medical exam.

4. Choose the Right Policy

  • Policy Type: Decide whether term life, whole life, or another type of life insurance best suits the needs and circumstances of the person you’re insuring.
  • Coverage Amount: Consider how much coverage is appropriate based on the financial loss that would be incurred.

5. Complete the Application Process

  • Providing Information: You’ll need information about the insured person, including health details.
  • policy ownership: As the policy owner, you will be responsible for premium payments, but the insured person’s health and age will affect the policy terms and costs.

6. Consider Ethical Implications

  • Respect and Transparency: Ensure the process is transparent and respectful to the insured.
  • Avoiding Conflict of Interest: Be mindful of potential conflicts of interest or ethical concerns, especially in sensitive relationships.


Buying life insurance for someone else requires demonstrating insurable interest, obtaining consent, and involving the person in the application process. It’s a decision often made to protect against financial loss or provide for dependents and must be handled with care and consideration for legal and ethical guidelines.

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Shawn Plummer

CEO, The Annuity Expert

Shawn Plummer is a licensed financial professional, insurance agent, and annuity broker with over 14 years of first-hand experience with annuities and insurance. Since beginning his journey in 2009, he has been pivotal in selling and educating about annuities and insurance products. Still, he has also played an instrumental role in training financial advisors for a prestigious Fortune Global 500 insurance company, Allianz. His insights and expertise have made him a sought-after voice in the industry, leading to features in renowned publications such as Time Magazine, Bloomberg, Entrepreneur, Yahoo! Finance, MSN, SmartAsset, The Simple Dollar, U.S. News and World Report, Women’s Health Magazine, and many more. Shawn’s driving ambition? To simplify retirement planning, he ensures his clients understand their choices and secure the best insurance coverage at unbeatable rates.

The Annuity Expert is an independent online insurance agency servicing consumers across the United States. The goal is to help you take the guesswork out of retirement planning and find the best insurance coverage at the cheapest rates

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