How to Take Life Insurance on Someone Else

Step‑by‑Step Process

To take life insurance on someone else, you must first secure that person's written consent. Once consent is obtained, you submit a qualified application to an insurer. The insurer then evaluates the applicant's health, lifestyle, and risk profile through underwriting. If approved, you receive a policy that names the insured and the beneficiary—often the same person you purchased it for.

1. Obtain Consent

The insured must sign a release form or a life insurance policy application. Without this signature, the policy cannot legally bind the person to the insurer. If the insured is a minor, a parent or legal guardian must provide consent.

2. Choose Policy Type

Decide between term life, whole life, or universal life. Term life offers coverage for a set period at lower premiums; whole life provides lifelong coverage with a cash value component; universal life combines flexible premiums with a savings element.

3. Complete the Application

Fill out personal information for both the applicant (you) and the insured, including medical history, occupation, and lifestyle habits. Provide documentation such as medical records or a doctor's note if requested.

4. Underwriting and Approval

The insurer reviews the application, may order a medical exam, and assesses risk. Premiums are set based on age, health, and policy type. Approval results in a policy number and terms.

5. Funding the Policy

Pay the initial premium and any ongoing payments. Many insurers allow payment by debit card, bank transfer, or direct deposit. Keep records of payments for tax and beneficiary purposes.

6. Naming Beneficiaries

Specify who receives the death benefit. The insured can name multiple beneficiaries with percentages. The policy holder can change beneficiaries during the policy's life.

7. Review and Update

Periodically review the policy to ensure it still meets your needs and adjust coverage or beneficiaries as life changes. Keep the insurer informed of significant events like marriage, divorce, or major health changes.