What Do You Need to Get Life Insurance on Someone?

To get life insurance on another person, you need three things: an insurable interest (a real financial stake in that person’s life), the person’s written consent, and enough identifying, medical, and financial information about them to complete the application. Insurers require all three before issuing a policy, and missing any one of them is enough to stop the application or void the policy later.

An Insurable Interest in the Person

Insurable interest means you would suffer a genuine financial loss if the insured person died. Without it, the policy is treated as an illegal wager on someone’s life and can be voided entirely.¹

Certain relationships create an automatic insurable interest:

Spouses and domestic partners. Shared income, debts, and household expenses make the financial impact of a partner’s death clear.
Parents and dependent children. A parent can insure a minor child to lock in future insurability or cover final expenses.
Business partners and key employees. Losing a co-owner or essential employee can disrupt operations and reduce revenue, giving the business a direct financial stake.
Creditors. A lender may take out a policy limited to the outstanding balance of a loan or mortgage to protect against default if the borrower dies.

The insurable interest has to exist when you apply. What the law prohibits is arranging coverage from the start when no genuine financial relationship exists, which is why schemes that recruit strangers to take out policies for later transfer to investors are void in most states.¹

The Insured Person’s Consent

An adult cannot be insured without their knowledge. The person whose life will be covered must sign the application, confirming they understand a policy is being taken out and who will own it. The signature can be handwritten or electronic, depending on the insurer. Minors are the main exception: a parent or legal guardian can apply on a child’s behalf without the child’s signature.

Submitting an application without the insured person’s authorization is fraud. The insurer will void the policy, and the applicant may be flagged in industry databases, which makes future coverage difficult to obtain.

Extra Consent Rules for Employer-Owned Policies

When a business insures an employee, federal tax law adds its own requirements. Before the policy is issued, the employer must notify the employee in writing that it intends to insure their life, state the maximum coverage amount, and disclose that the company will receive the death benefit. The employee must then provide written consent acknowledging that coverage may continue even after they leave the job.²

Skip these steps and the death benefit loses most of its tax-free treatment. The employer can only exclude the total premiums it paid; the rest becomes taxable.²

Personal and Identifying Information

You will need the insured person’s full legal name, date of birth, current home address, and Social Security number. A valid government-issued ID, typically a driver’s license or passport, is required to verify identity. The date of birth matters because premiums are calculated based on the insured’s exact age when the policy is issued.

Medical History and Lifestyle Details

The application asks for a detailed medical history: current and past conditions, surgeries, and hospitalizations. Have the names and contact information for doctors the insured has seen in recent years ready, along with a list of current medications and dosages.

Lifestyle questions go beyond the medical file. The insurer will ask about tobacco use, alcohol consumption, and higher-risk activities such as skydiving, rock climbing, or private aviation. Travel to regions with significant health or safety concerns may also come up. Every answer needs to be accurate, because the insurer will verify what you report during underwriting.

What the Insurer Does With It

Most traditional policies require a paramedical exam. A licensed examiner visits the insured at home or another convenient location to measure height, weight, and blood pressure, and to collect blood and urine samples. Results go directly to the insurer.

The insurer also pulls a report from MIB, Inc. (formerly the Medical Information Bureau), which tracks medical conditions and high-risk activities reported by other insurance companies. If the insured previously applied for life or health insurance, conditions disclosed on that application may appear in the MIB file, and the insurer will check for inconsistencies with the current application.³

You can request a free copy of the insured person’s MIB report once every 12 months, and you have the right to dispute errors before applying.³ Underwriting commonly takes four to six weeks, longer for complex cases or large coverage amounts.

Financial Documentation to Justify the Coverage Amount

Insurers will not let you buy an unlimited death benefit. The coverage has to be proportionate to the actual financial loss the owner would face. For individual policies, carriers generally cap coverage at roughly 8 to 10 times the insured person’s annual income, though the exact multiple varies by insurer and age.

To support the amount you’re requesting, be ready to provide tax returns, business financial statements, or loan balances that show the economic relationship between you and the insured. A business insuring a key employee, for instance, may need to demonstrate that employee’s contribution to revenue. Requests that exceed what the insurer considers financially justified are reduced or declined.

Watch for the Three-Party Tax Trap

Life insurance death benefits are generally not included in the beneficiary’s taxable income.⁴ But when you’re buying a policy on someone else, it’s easy to end up with three different people in the three roles, and that creates a problem the IRS calls the Goodman triangle.

If one person owns the policy, a second is the insured, and a third is the beneficiary, the IRS treats the death benefit as a taxable gift from the owner to the beneficiary. Own a $1 million policy on your business partner, name your spouse as beneficiary, and when your partner dies the full $1 million is considered a gift from you to your spouse. Gifts to a U.S.-citizen spouse qualify for the unlimited marital deduction, but gifts to anyone else can eat into your lifetime gift and estate tax exemption, currently $15 million for 2026, or trigger gift tax if you have already used that exemption.⁵

The cleanest fix is to collapse the arrangement to two people: make the owner and the beneficiary the same, or make the insured and the owner the same. If three parties are necessary for estate planning reasons, talk to a tax professional before the policy is issued.

Why Accuracy on the Application Matters

After a policy is issued, the insurer has a window, typically two years in most states, during which it can investigate and potentially deny a claim if it discovers the application contained material misrepresentations. This is the contestability period. If the insured dies within that window, the insurer may review medical records and other documents to confirm the application was accurate.

A failure to disclose a serious health condition, or false information that would have changed the insurer’s decision, can lead to a denied claim or a reduced death benefit. After the contestability period ends, the insurer generally must pay the full benefit regardless of application errors, with narrow exceptions for outright fraud or unpaid premiums. The best protection is answering every question on the application accurately the first time.

1
National Association of Insurance Commissioners. Guidelines on Gifts of Life Insurance to Charitable Institutions
2
Office of the Law Revision Counsel. 26 USC 101 – Certain Death Benefits
3
Consumer Financial Protection Bureau. MIB, Inc.
4
Internal Revenue Service. Life Insurance and Disability Insurance Proceeds
5
Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026