Important Facts

Could Someone Purchase Life Insurance On Me Without Me Knowing?

It is possible for a life insurance policy to be purchased on you without your knowing, but the odds of it fraudulently happening are slim due to safeguards such as insurable interest.

Insurable Interest Is a Safeguard Against Fraud

It may seem like something out of a mystery novel -- someone purchasing a life insurance policy on your life without you being aware. Life insurance companies have certain processes and safeguards that would make it extremely difficult for this to happen. Here's why:

For someone to purchase a life insurance policy on you, they must have what's called an insurable interest. This means that the person who wishes to insure your life would suffer genuine financial stress if you were to die. Some common examples of an insurable interest can include a child or grandchild, a spouse or former spouse, a disabled adult child, a domestic partner or live-in, and even a business partner. So for example, under normal circumstances, your neighbor wouldn't be able to show a financial interest in your life and therefore couldn't purchase a policy on you.

Larger life insurance policies usually require specific medical information on the people they insure during the underwriting process. This generally means that you would be required to sign a release of your medical records or even undergo a medical examination when applying for coverage. That would be next to impossible for someone other than you to pull off. And as a rule, life insurance policies generally require the insured's signature on all final paperwork - even for applications that are taken online or over the phone. In fact, many policies that typically wouldn't require a medical exam (such as no exam life insurance), will at the very least require your signature.

However, there are some exceptions to the signature rule. For example, a parent can buy life insurance on a baby or young child. In this instance, the insurance company wouldn't require the child's signature, making it possible that as an adult, the child is unaware of the policy's existence. Another exception could be a group policy or policy rider through your job that doesn't require your spouse's signature in order to sign him/her up for coverage. This practice is common among group life insurance policies.

It's not easy for someone to purchase a policy on your life without your knowledge. Since forging your signature is considered a criminal act of fraud and punishable by law, if the fraud were ever discovered, the insurance company would require the money to be paid back.

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All Learning Center articles are general summaries that can be used when considering your financial future at various life stages. The information presented is for educational purposes and is meant to supplement other information specific to your situation. It is not intended as investment advice and does not necessarily represent the opinion of Protective Life or its subsidiaries.

Learning Center articles may describe services and financial products not offered by Protective Life or its subsidiaries. Descriptions of financial products contained in Learning Center articles are not intended to represent those offered by Protective Life or its subsidiaries.

Neither Protective Life nor its representatives offer legal or tax advice. We encourage you to consult with your financial adviser and legal or tax adviser regarding your individual situations before making investment, social security, retirement planning, and tax-related decisions. For information about Protective Life and its products and services, visit www.protective.com.

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