BS
Licensed insurance agent
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You’ve probably read about it happening. A spouse took out a life insurance policy on their husband or wife without their knowledge and then did away with them. However, the case was investigated, and the perpetrator was apprehended.
That not only makes for exciting reading; it actually does happen. There are many documented cases of people finding out that someone, known or unknown to them, had taken out a life insurance policy on them. Once you find out, it can be made invalid. But you’ll no doubt be looking over your shoulder until that happens.
Are you 100% certain that nobody has taken out a policy that names you as the insured and them as the beneficiary? Could it be that an ex, boss, or disgruntled neighbor has a policy on you that you’re not aware of?
If you think that’s remotely possible, read on. You’ll learn how to find out if someone has a life insurance policy on you without you knowing about it, what you can do about it if it happens, and more.
Yes, it is possible, but it’s improbable. Life insurance companies have safeguards that make this very difficult for someone to do.
Most life insurance policies require the person who’s going to be insured to take a medical exam, but that’s usually reserved for policies with face amounts of $100,000 or more. Having an exam is a sure tip-off that someone has named you as the insured on a policy.
It’s also not unusual for only a signature to be required for policies with smaller face amounts like $10,000, $25,000, or $50,000. Without telling the insured person, these smaller policies could be taken out illegally by someone who forges a signature. For this reason, life insurance companies typically call the insured to confirm that they’re aware of a policy being taken out on them.
There is one legal exception to someone taking out a life insurance policy on someone without their consent. A parent or guardian can take out a policy on a child under age 18. If the child is older than that, they’ll have to give their consent for any policy that names them as the insured person.
If you’re wondering how you can find out if someone took out a life insurance policy on you, here are several things you can do to uncover if there’s a fraudulent policy on you:
If you discover that someone did, in fact, take out a policy on you, your first call should be to the insurance company that issued the policy. If they’re not cooperative with helping you resolve the issue, contact your state insurance department and law enforcement.
Someone taking a policy out on you without your knowledge may have committed insurance fraud and could face jail time and/or a significant fine.
No, you usually can’t cancel a life insurance policy that someone took out on you. The person who took out the policy is the owner, and only they can cancel it. As the insured, you have no legal rights concerning the policy, so you can’t legally cancel it. If you know the person, friend, or relative, you can always ask the policy owner if they’ll transfer ownership to you.
If you still have questions about life insurance ownership, the answers to these frequently asked questions might help.
Yes, you can take out a life insurance policy on your spouse if you have an insurable interest. That means that if your spouse died, it would cause you considerable financial hardship.
It’s always a good idea to get your spouse’s approval and go through the standard life insurance application process by having them take out a policy with you as the beneficiary.
No, you will need your parents’ consent before taking out a policy on them. Many children help their parents buy burial or final expense insurance to cover funeral costs and related expenses, but the parents must know about it.
There are specific policies called “key employee” policies. Companies take these policies out on employees whose deaths would have a significant financial impact on the company.
For example, a company that depends on a sales force to generate income may need to protect itself financially by taking out a life insurance policy on its sales manager and top salesperson.
The company may be required to provide documentation justifying the policy and proving that it would hurt the company financially if the employee passes away.
Of course, the employee must know the policy is being taken out and approve of it, and they must complete an application and medical exam if necessary.
Like anything, there are pros and cons to taking out a life insurance policy on another person.
The best way to find out if a life insurance policy is valid is to contact the company that issued the policy. Even if the policy has lapsed due to non-payment of premiums, you may still be able to get it reinstated or receive a return on your investment by receiving some dividends.
You can do a couple of things when you’re buying a life insurance policy on someone’s life to avoid breaking any rules.
First, make sure you can show that you have an insurable interest in the person. Second, be sure to have the consent of the person being insured.
The first thing they’ll need to do is complete and sign an application. Next, they’ll need to provide personal information (name, address, phone number, etc.) and answer some detailed questions about their medical history.
For larger face amounts, it’s pretty likely they’ll have to submit to a medical exam. These exams usually include a paramedic or nurse:
It’s doubtful that someone has taken out a life insurance policy on you without your knowledge. However, if you’re concerned that it has happened, follow the steps above to find out the truth of the situation.
If you suspect that your life is in danger because someone took out a policy on you without your approval, contact the police immediately.
