January 24, 2008
Q: Can someone get a life insurance policy on me without my knowledge?
A: Anything under the sun is possible. In order to get a life insurance policy issued, a person should have:
1. An insurable interest in the insured (you’re financially impacted if someone dies)
2. A need for the insurance $$ amount requested (no $5 million polices on your kids, unless she’s Miley Cyrus)
3. Access to personal information IE DOB, SSN, address, medical history
4. Signature of the insured (if insured is an adult)
5. Cooperation from insured if insurer requires paramedic exam (blood, urine, saliva, med history) or a physical exam. The people performing the exams are required to check IDs.
In order to collect on the policy, the person would need:
1. Cooperation from family or the executor of the estate to get death certificates.
2. Be outside the contestability period of the policy (usually two years from policy issue date) to avoid the scrutiny of the insurance company.
In the US, there are around 1,500 - 2,000 life insurance companies and they all do business in a similar manner with small differences in underwriting. None of them would make a profit by paying death claims on fraudulently obtained policies; so safeguards are put in place to guard against deception.
Without a paramedic exam or physical, there is a limit on how much insurance you can purchase. The industry limit seems to be around $250,000. So purchasing a $1M life insurance policy without the insured’s knowledge would be a challenge requiring a good amount of deception and fraud at policy issue. There is one currently incarcerated agent who got busted filing fraudulent death claims.
This limits the size and type of policy someone could purchase. Small policies (say less than $100,000 for a young person, $25,000 for an older person) get less scrutiny. Group policies require only a few questions, but again limit the death benefit that can be purchased (usually only spouses can be named to purchase 50% of employee’s death benefit).
So, my conclusion; unless you’re the target of a well thought out deception, you’re probably just paranoid or watch too much TV.
Editors note: Aaron at Council Financial pointed out to me there are some specialty programs that allow people with an insurable interest to obtain a policy. Say you’re Brittany Spears’ publicist, this makes your livelihood depends on one person; there is a specialty program that allows you to obtain a death benefit from a life policy without the insured persons’s knowledge. My guess is the premiums would be fairly steep.
You should mention programs like this one from Lloyd’s of London. It is still only available in very limited circumstances, but I would hate for you to be wrong about something.
http://www.piu.org/confidential_life_insurance.html
Thanks Aaron, I never heard of such; I’ll keep this in mind when I become Led Zeppelin’s new manager.
It would be nearly impossible for this to happen. Insurers want to know and understand a relationship between insured and policy owner. Plus you, as the insured, would need to undergo some underwriting.
My ex mother-in-law had a life insurance policy on me due to suicide attempt after we were divorced without my consent. I only found out about it because the insurance company sent me a small rebate check in the mail….which I called to ask who paid for the policy? They told me my ex in laws. Is there anything I can do about this?
Your mother-in-law is paying for the policy. Try contacting the insurance company and finding out who the owner of the policy is, who is the beneficiary is and when the policy was issued.
If your mother-in-law is the owner and the policy is past the contestability period, ther’s probably not much you can do except outlive the policy. If you’re the owner, cancel the policy. Drop us a note and let us know what happened.
They thought to give me a written statement that i had 6 months with no treatment to a year with treatment, this loving M-I-Law tells me to live a full happy 6 months and not put the children through seeing me so sick from cemo treatments. I am betting she has a policy , PLEASE HELP ME FIND IT. And have it nulled and have it aired what kind of person she is and forgery and fraud carries a healthy vacation in prison
My oldest brother had a life insurance policy on me, with my approval. He was the owner and I am the insured. My brother died in 2010. Do I have the right to become the owner of the policy instead of my brother’s wife since I am the insured and the agreement was with my brother and me?
My oldest brother had a life insurance policy on me, with my approval. He was the owner and I am the insured. My brother died in 2010. Do I have the right to become the owner of the policy instead of my brother’s wife since I am the insured and the agreement was with my brother and me?