Taking out life insurance on behalf of a parent, grandparent, sibling or close family member is possible. However, before you call an insurer or search online, there are three things you will need to find the right policy for them.
Have the discussion
Before you do anything else, a starting point is to have a discussion with the person you are planning on taking out cover for. Keeping them in the know regarding why you want to take out the policy along with which insurer you are going with can make things less complicated when it comes to the application and claims process. Things that are important to discuss are:
Who will be paying for the premium. To keep the policy active, it will need to be paid for every month. Having a clear understanding on who will be paying for it, even in the event where the person paying for it passes on, can help you avoid having the policy closed.
Proving insurable interest. Depending on the insurer, you may have to prove insurable interest which simply means that you will have to prove that you will suffer financial consequences in the event where the person you are taking a policy out for passes on. This usually happens when a spouse, parent or business partner takes out a policy on behalf of someone else.
It is crucial to have a discussion so that everyone is on the same page. It also makes it easier for you and insurers who will be making the payout during the claims process to handle the claim efficiently.
Get the relevant information
Having the relevant information that you can use for the underwriting process will help you secure a policy for your loved one. During the underwriting process, you will be asked questions such as age, gender, health, occupation, lifestyle and medical information that can make it possible for insurers to give you a policy that will be suitable for you.
Therefore, have information such as the person's I.D number, medical history and relevant occupation and lifestyle choices which can impact your policy. Knowing why an insurer can deny your application can make it easier for people who are planning on taking out life cover for a loved one. Always remember that you can ask an insurer why they have denied your application to help you improve your application when you apply again.
Use an online calculator
Sometimes thinking about how much life cover is enough cover can be a daunting question. An online life insurance calculator is there to help you take out the daunting part of such questions and also helps you navigate your way to a cover that will be suitable for you. Using an online calculator can helps you make the right choice by taking a policy that will not leave you exposed financially.
