Can you buy Life Insurance for a family member?

Family Life Insurance

Everyone should have life insurance. If you pass away, and you don’t have a life insurance policy, your family members will be responsible for the cost of your funeral. It will also give them the extra money that they need to pay off your debts. If your loved one doesn’t have an insurance policy because they cannot afford it or they aren’t old enough to have their own policy, you can take one out for them. If this is something that you are considering, there are a few things that you should understand.

Also read: Can You Have Multiple Life Insurance Policies?

Do I Need To Tell My Loved One That I’m Taking Out a Policy?

If you are taking out a life insurance policy on a loved one, they need to know. First, the individual is going to need to give the insurer a detailed list of their risk-factors such as their health, family medical history, their age, and occupation. Your loved one might also need a medical examination and a blood test before the policy is finalised.

Related: How Much Life Insurance Do You Need?

Who Can I Purchase a Life Insurance Policy For?

You can buy an insurance policy for your spouse or your children; however, there are other people outside of your immediate family who insurers will allow you to buy a policy for.

• Your Parents: If your parents don’t have life insurance, you could end up paying for their funeral when they pass away. Taking out a policy will save you money in the long run. If you are thinking about buying a policy for your parents, you should do it soon. The older they are, the more expensive your premiums will be.

• Your Partner: You don’t have to be married to someone to buy an insurance policy for them. If you are with someone but not married, you can still buy a policy for them. In cases like this, you would need to choose between an individual policy and a joint policy. Joint policies are cheaper; however, they pay out just once. These policies are only available to couples with similar risk profiles. An individual policy would pay out for both people, and they can be purchased regardless of your risk profiles.

• Business Partners: Taking out a life insurance policy on your business partner will protect your business if they should die.

• Key Employees: Taking out an insurance policy on a key employee whose knowledge or contributions to the company are uniquely valuable to the company can protect the business.

• Additional People: If you can prove that the death of another person will cause you to suffer on a personal or financial level, some insurers will allow you to buy these policies on a case by case basis.

Related: Things to Look for When Buying Life Insurance

If you are living in Australia and you are worried about the financial ramifications when someone dies, you should consider buying them a life insurance policy. Absolute Insurance understands the importance of family. Contact them today to get the policy for your loved one.

Buying life insurance for a family member or someone else is the responsible thing to do. If the worst happens, you will be happy that you did. To understand in detail, it is best to consult a life insurance broker.

Also Read:
– What are the different kinds of life insurance?
– Is Life Insurance Worth the Cost?
– Types of Life Insurance Payouts
– High-Risk Life Insurance

Greg Maguire

Greg Maguire

Greg is an experienced Insurance Broker in Perth, WA, with an Advanced Diploma of Financial Planning from Deakin University and a Bachelors Degree from Edith Cowan University. He is a member of the Chamber of Commerce & Industry WA and Baldivis Rotary, as well as Vice President of the local high school's Parents & Citizens Association. Greg provides personalised and dedicated services to his clients that bigger firms are unable to match.