Life insurance provides financial support to the policy's designated beneficiary in the event of the principal's death. While many individuals take out life insurance policies on their own lives so as to provide financial support to a dependent after they die, it is also possible to take out a life insurance policy for someone else, such as a relative. To take out life insurance on a third party, you must have an insurable interest in the person's life and the permission of the individual on whom you wish to take out a policy.
Step 1
Request permission from the relative to take out a life insurance policy on his life. Life insurance companies require the permission of the principal before opening a policy. Obtain permission before beginning the paperwork. This will save a lot of time and hurt feelings should your relative be offended by your attempt to take out a policy.
Step 2
Ensure that you have an insurable interest in your relative's life. An insurable interest means you must be able to prove that you rely on that relative for support or will suffer some kind of financial harm as a result of the relative's death. If neither situation is true, you will not be able to take out a policy on that relative's life, even if she gives you permission.
Step 3
Choose the appropriate type of life insurance and a suitable insurance agency for your situation. Insurance agents can help find a good policy to meet your needs.
Step 4
Request that your relative undergo a medical examination if the examination is required by your insurance agency for the type of insurance you wish to take out. Medical examinations are not always necessary.
Step 5
Submit your application to your insurance agent. Depending on the agency, the principal's signature on the application may satisfy the requirement of permission. In other cases, your agency may require the principal relative to contact the insurance agent to approve your request.
Tips and Warnings
- Pay all life insurance premiums on time and as required. Missing even a single payment may entitle your insurance agency to cancel your policy without reimbursement.
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