Purchase life insurance for someone else secretly!

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PostPosted: Mon May 27, 2013 11:37 am   Post subject: Purchase life insurance for someone else secretly!  

Can I buy a policy for someone else without he/she knowing about it? Actually, I want to give my wife a surprise on her 33rd B'day.


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RobertBar
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PostPosted: Mon May 27, 2013 2:57 pm   Post subject: Purchase life insurance for someone else secretly?  

No, you cannot buy life insurance on another person without their knowledge.



You would need insurable interest in that person, which you have, being her spouse.



However, you also need the person's permission/consent, signature on the application, and she may need to answer health questions, and/or take a physical exam or paramed.



Also, if you want to surprise her for her birthday, why not buy life insurance on yourself naming her as the beneficiary, that way she benefits, not you?



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PostPosted: Tue May 28, 2013 4:51 am   Post subject:   

Life insurance as a birthday present? Not high on my wife's list of birthday gifts.



"Here you go honey, a $1,000,000 life insurance policy and I'm the beneficiary. Would you like a little more arsenic in your coffee?"



It would make more sense for you to give her a $1,000,000 policy on your life, with her as the beneficiary. And give up drinking coffee.



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PostPosted: Tue May 28, 2013 5:26 am   Post subject:   

Since itÂ’s a life insurance, the answer is NO! Every insurance company requires that the person sing the application to acknowledge the buying of the policy and correspond to it.



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PostPosted: Tue May 28, 2013 11:38 am   Post subject:   

It depends upon what you mean by "buy her a policy".



If it is going to be "her policy" meaning that she is the owner, it is not possible. She would need to sign the application.



If it is going to be a policy in which you own on your life and she is the beneficiary, it can be done easily.



If it is a policy in which you own, but she is the insured, it is possible, but doubtful. As long as there is an insurable interest, there is no law against it. The challenge is finding a life insurance company that will write this type of policy. I know of none that will.


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PostPosted: Wed May 29, 2013 2:24 am   Post subject:   

Quote:
If it is a policy in which you own, but she is the insured, it is possible, but doubtful. As long as there is an insurable interest, there is no law against it.
CA Insurance Code Section 10110.3 and similar statutes in several other states do prohibit such policies (CA looks the other way if the policy is for less than $50,001:



10110.3. (a) An insurer may not issue an individual life insurance policy to an applicant that insures the life of the applicant's spouse unless the applicant's spouse has signed the policy application or has otherwise been notified in advance of the issuance of the policy.

(b) This section shall apply to policies of individual life insurance with face amounts exceeding fifty thousand dollars ($50,000) that are issued on or after July 1, 2004.


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PostPosted: Wed May 29, 2013 10:26 am   Post subject:   

No, that wouldn't really be possible without her approval.

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PostPosted: Wed May 29, 2013 1:26 pm   Post subject:   

Good catch, Max. I stand corrected. The bigger issue is still that even if it is less than $50,000 or if one is in a state that does allow it, there is probably not an insurance company that will write it. Without the insured's signature, it would have to be a policy without medical underwriting, so it would be very expensive.


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PostPosted: Wed May 29, 2013 4:31 pm   Post subject:   

On November 9, 1994, I worked on a case in which a Gay couple wanted to name each other as beneficiaries. Of course, the insurance company prohibited this claiming a lack of insurable interest.



In the press release, the Insurance Commissioner stated, "I should be very clear to all insurers doing business in California that consumers buying life insurance in California have the unassailable right to pick anyone they want as a death beneficiary."



California law clearly state that an individual purchasing life insurance may have policy made payable to whomever he or she pleases, regardless of whether the beneficiary has an insurable interest.



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PostPosted: Wed May 29, 2013 6:22 pm   Post subject:   

Yep. One always has insurable interest in their own life. This isn't the same as what we are talking about in this thread. We are talking about buying insurance on someone else.



I think that most people don't understand that "insurable interest" is between the owner and the insured and not between the insured and the beneficiary.


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