Legal or illegal life insurance policy?

My friend says it is legal and accepted to be able to take out a life insurance policy on an adult without their knowledge or signature and I say that it is not allowed.

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  • Anonymous
    1 decade ago
    Best Answer

    Your friend has been watching way too many murder movies. In holywood it maybe legal, but in the real world it wont happen. Take your friend through this logic:

    Insurance companies are all in the busienss of making money, like any other business. Would it be smart to issue policies (obligations to pay) without knowing anything about who you are insuraning? Things like health checks, drivers licenses, social security numbers are all needed to verify that the person is a true person. Other wise someone could theoreticaly take out a life insurance on a non existant person, then claim this person died one day after the contestation period (two years), and be paid the face amount of the policy! That is not a good way for the insurance company to make money... maybe for the person buying the policy, but not the insurance company.

    Oh and by the way, there are federal laws against buying insurance on someone without their consent. There are Third party owned life insurance policies... these are very dangerous and most often scams. This is were someone has had a life insurance policy, and "sells" the policy to someone they don't know. there is a transfer of ownership, where the premiums are picked up by the third party, and beneficiary becomes the new owner. There is a federal look back period of three years when it comes to estate taxes, so if the person dies within three years of "selling" the policy the Face Amount of the policy is included in their gross estate. This can cause huge tax problems down the road. If anyone out here reading this is approached by someone who wants to buy your life insurance policy, beware!

    Source(s): Life agent/financial advisor 2 yrs financial industry 7+ yrs BA Economics www.alaldrete.com
  • 1 decade ago

    The insured has to sign the application and depending the size of the policy and the age of the insured may have to take a medical. What an other person can be is the "owner" of the policy. For that he has to have what is known as an insurable interest in the person. For example,, the insured is being helped financially by the owner or any other reason to justify that you can receive an amount of money as

    compensation for your expenses in this person

  • 3 years ago

    I suggest one to visit this web site where onel can compare rates from different companies: http://COVERAGEDEALS.NET/index.html?src=2YAwkdmkKX...

    RE :Legal or illegal life insurance policy?

    My friend says it is legal and accepted to be able to take out a life insurance policy on an adult without their knowledge or signature and I say that it is not allowed.

    Follow 11 answers

  • 1 decade ago

    For an adult their signature is required. During the application stage an agent usually will become the witness of this application.

    Eventhough if you are buying a policy for your spouse , your spouse need to sign as life assured and you as an applicant & witnessed by the insurance agent.

    Source(s): http://www.einsuran.com Malaysia Life Insurance
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  • 1 decade ago

    Generally illegal.

    I could take out a $1 million policy on my hot shot, top salesperson with my company as beneficiary, he/she would know about the policy, have to sign the application and submit to blood/urine samples. That is, he/she would know.

  • Anonymous
    1 decade ago

    You can take out a life policy on a realitive with out them knowing.

  • 1 decade ago

    Illegal and against publlic policy,and no co would write it.

    i

  • 1 decade ago

    yes, u r right to say that it is illegal, but then if there is an understatement on why the your friend need to do some action, then maybe justification on his action may change your pespective on the above matters.

    i don't mean to offend the law, but then reasoning that makes us human. :)

  • 1 decade ago

    its called "insurance fraud" and "forgery of a legal document." Unless your friend likes living in a concrete walk-in closet, he might not want to do it.

    Source(s): insurance agent-Texas, CLTC
  • 1 decade ago

    It's not allowed. You're right. Your friend is wrong.

    Source(s): agent, 21+ years
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