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Can I buy term insurance for someone else?

10 Oct 22      |       | ShareShare Share Blog Or copy link Copy Share this link via

Authored by: Anurag Ainapurapu
Reviewed by: Krupa Kenia

The Long Read


Everything you *need to know* is right above this. Scroll down, only if you'd still like to read more (honestly, why?)

Yes, if you can prove your insurable interest in them aka you need to be able to prove that their untimely death can cause you financial trouble. 
 

For example: You can buy term insurance for a parent, spouse or your business partner. But not for a random acquaintance because you will not be able to prove your insurable interest in them, in the absence of a blood or legal relation.

Nope, sorry. You can’t. To be able to do that, you must prove that you are financially dependent on them aka you need to be able to prove your insurable interest in them to your insurer.  It’s extremely difficult to do because there’s no legal relationship like marriage or business partnership. You can’t even buy it as a surprise because they need to know and be involved in the entire process.

Technically yes, but practically no, because it’s difficult to prove “insurable interest”. You need to be able to prove that you’ll suffer from financial trouble if your partner dies, which is difficult to prove in the absence of a legal contract like marriage. 

 

However, you can still ensure that your live-in partner receives your term plan payout. Click here to know more. 

 

No, you can’t. Due to the absence of a legal relationship, it will be difficult to prove insurable interest.

Simple! You can buy term insurance for anyone you can prove you have an insurable interest in i.e. their untimely death will cause you financial distress.
 

So you can buy a term plan for:

  • Wife and kids

  • Business partner

  • Key employees

  • Parents

  • Siblings

and so on!


Remember, they have to be in the know and involved in the entire process. 

 

Yes, you can buy a term insurance policy for your business partner, even if they are not blood-related or are your spouse. You will need to prove your insurable interest in them, i.e. how will you be financially impacted if your business partner passes away. 
 

If you are planning to buy a term insurance policy for your business partner, ensure that they are involved in the process and that they know about it as well. You can’t buy a term insurance policy as a surprise for them.

Yes, you can buy a term policy for your homemaker wife, even if she doesn’t earn, provided that she is: 
 

  • 18-65* years old
  • an Indian citizen, resident, PIO (Person of Indian Origin) or NRI (Non-Resident Indian)
     

*may vary from insurer to insurer



But remember, her life cover will be less than a working spouse since she has no income.

Yes, you can buy term insurance for your adopted child provided that they have been legally adopted.

Yes, you can buy term insurance for your parents but remember that some insurers may have an age limit for offering term plans. For example, an insurer may not offer term plans to people above the age of 65 years. So, it’s best to check with your insurer regarding this. 

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