Could someone secretly take out a life insurance policy on me?

By Posted : 01/01/2011

Safeguards built into the life insurance application process would make it extremely difficult for someone to secretly take out a policy on your life.

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When someone applies for a life insurance policy, there are several requirements that help prevent secret policies. They include:

  • Insurable interest. The person taking out the life insurance policy must have an "insurable interest" in you. Basically, that means he or she must be at risk of a financial loss if you die. Examples of people with an insurable interest in your life include your spouse, blood-related family member or a business partner.
  • Medical exam or release of medical information. Most life insurance policies require medical information about the person whose life is being insured. Unless you sign a release or undergo a medical exam, your medical information cannot be accessed without your knowledge.
  • Your signature. Life insurance policies usually require consent via your signature. Most insurance companies also follow up with paperwork, an e-mail or a phone call.

Technically, it might be possible for someone to successfully commit fraud and take out a secret policy on your life. But this is extremely unlikely and would involve actions such as someone getting a hold of all insurance company correspondence and forging your signature.

Some businesses also offer group life insurance where it's possible to take out a policy on your spouse. But such policies typically do not have substantial payouts and are unlikely to inspire a nefarious scheme.

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3 Responses to "Could someone secretly take out a life insurance policy on me?"
  1. Sandra Anselm 27, Apr, 2013

    RE: insurable interest. Question is, does the 63 year old spouse of my 83 year old mother's husband qualify as insurable interest? The funds. life insurance, if the man passes before her,would be for her support and care?

  2. Mike Clark 15, Nov, 2011

    Semi-hypothetical question: if a husband has had an insurance policy on his wife's life of a substantial amount, with himself as beneficiary, does she has any recourse if, for example, the marriage is beginning to break up and she has reason by virtue of his behavior to believe that her husband might take some action causing her death, such that she could revoke her permission to be the named insured on the policy?

  3. Annie Goldberg 25, Aug, 2011

    What is the legal basis for Rick Perry's efforts beginning in 2003 to let UBS buy life insurance policies on retired Texas teachers? My understanding is that the teachers themselves or their survivors would receive nothing; it was a scheme simply to raise money for the state of Texas.


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