Can I take an buy an insurance policy on anyone AND be the beneficiary? To what extent does insurance companys let you take out policys and who’s it limited to? (Family, immediate family, friends, etc…) I can really double my chances if I pick the right people. (Don’t give me that look, you’d it too 
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Mods, feel free to fix my thread title.
No, you can’t buy an insurance policy on just anyone. You need to show that you have a vested interest in something/someone, and their demise would adversely affect you.
Insurance is designed to protect against unforseen calamity, not provide a windfall for opportunists. How else could the insurance companies stay in business?
I worked briefly as an insurance agent so I can tell you definitely, you have to have what is called an insurable interest - spouse or child, business partner, etc. Even for a sibling or grandparent, you’ve really got to have some kind of dependency involved. I’m not sure if this is law or just the company I worked for but there was also a reduced limit on what a grandparent can take out on a child without the parents’ permission, unless the grandparent was the primary caretaker. Although if a parent takes out a huge policy on a minor child, that’s likely to raise some eyebrows as well, unless you’re talking about the Olsen twins or something, because with kids you’re mainly talking about burial and possibly medical costs, not wage replacement.
~ Randi
I should also add… the policy owner, who may be the insured, the beneficiary, or neither, has the right to name any beneficiary he/she chooses, and that right (as well as all rights including policy ownership) is assignable. There is also what is called an irrevocable beneficiary. This commonly comes into play in divorces - Mr Jones may have to make the former Mrs Jones his irrevocable beneficiary as part of a settlement, for example. Nothing about this prevents him from taking out another policy with Mrs Jones 2.0 as the beneficiary.
What the really clever opportunist would do is brainwash a lot of people into making him the irrevocable beneficiary. That’s perfectly legal although ethically suspect. But you didn’t get that idea from me.
~ Randi
I am divorced and my ex is a retired military man. I receive part of his pension. When he dies it ends and I’m up s…t creek without a paddle, financially speaking. I contacted the NY state dept. of insurance to see if I could get a life insurance policy on him to give me something when he dies. They told me there was no way I could insure him without his permission. If they were wrong I should sue. It’s too late now because he would never pass a physical.
I knew a guy who murdered his parents for insurance-no not a Menendez. He owned the policy, so despite mom’s protests, the insurance stayed in force. By the time he was caught, he already spent the $500,00 proceeds. BTW, now on death row ,for what it’s worth, in San Quentin.
Some large companies such as Wal-Mart have taken out insurance policies on their employees and have profited from it when the employees died. The employees’ families got nothing. Morally wrong, but apparently it’s perfectly illegal.
Apparently it’s illegal in Texas, but it’s legal in many states according to this page.
Not that I’m defending Wal-Mart, but depending on the capacity Mr. Sims worked in, the company may have had legitimate insurable interest. Since the article only mentions that he worked in the distribution facility I can’t say one way or the other if I believe that’s actually the case. If he were in a position of some importance and had accumulated a great deal of knowledge that only 11 years in the postion can provide, it’s perfectly legitimate because the company can say the policy covers the cost of hiring and training a replacement. If he’s been working on the loading docks for 11 years, then no, the company should not be able to take out a policy on him with itself as the beneficiary.
I’m not sure how Camelot Music was able to get away with policies on part-time, minimum-wage earners, as they wouldn’t fall into the category of “essential employees.” Also, if the assertion that Wal-Mart employees were denied health benefits if they opted out of the death benefit is true, that sounds like blackmail.
~ Randi
Wow, this dead-peasant business is fascinating. But frankly I see nothing morally wrong with it. I certainly see no reason why the family of the deceased is entitled to a dime of the insurance money, even if the arrangement was illegal in the state (TX) where it occurred. They didn’t pay the premiums, nor were they injured in any way by the transaction.
And all the suspicions about about an employer having an “incentive” to kill the insured with unsafe workplaces sound like a huge conspiracy theory to me. The way these things probably work is that some CFO-beancounter type in the head office hears about the “dead-peasant tax dodge” (hell, there’s probably a fat book listing all the thousands of tax-dodges out there that all CFOs have) and goes ahead signing up the low-level employees willy-nilly. Word of the arrangements never get past the finance department and it all amounts to paper pushing and bookkeeping.
Does anyone seriously believe the CFO makes a call from his yacht to the night manager of the El Paso BurgerWorld and says, “Who’s on tonight? Julio? Julio Rodriguez? Umm… you know what Willy, maybe it would a better idea if you fixed that gas leak next week. Know what I mean?”
A work related death COSTS the employer $. In Cal, the death benefits just rose to about $180,000 + $$ for dependants until age 18. Of course, many employers have WComp ins, but some illegally do not, & some are legally self-insured.
I’m a working life agent, and they are quite correct. Our forms have multiple instances of the proposed insured needing to sign. The owner is a different story, being the person paying the fees. Your ex would have to sign many things and take a physical.
Imagine if this were not the case. I’d then be able to insure your life for millions, kill you in a traceless “random” act, and collect the money.
And I hope this isn’t too harsh, but you’re veeeeery right that if he’s got a bad heart condition or something, then no company will touch him for a private policy. That would be a gift, not insurance.
It occurs to me, though, that he could possibly get something if he’s a member of a group that is getting group rates on life coverage. In that case there should be no physical to pass. He’d simply pay for his age. The problem there is that he may not care to do that for you. Would he if you paid for it?
I think even groups like AAA have some group coverage options. The drawback is that if he leaves the group, he can’t have the insurance. Also, watch out for the accidental-only policies. If you’re paying $20 for $250,000, it’s probably accidental. They not only don’t pay for natural causes, but in many cases, not all kinds of accidents.
There have been some similar threads in the past. Here is one of them:
Taking out life insurance on someone
To expand on the comment about “insurable interest,” I remember reading that “back in the day” people would take insurance out on the town drunk or a vagrant who would wind up dead soon after. I think I read it on the boards here, but can’t remember.