How to Find if Someone Has a Life Insurance Policy on You

Updated

You’ve probably read about it happening. A spouse took out a life insurance policy on their husband or wife without their knowledge and then did away with them. However, the case was investigated, and the perpetrator was apprehended. 

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That not only makes for exciting reading; it actually does happen. There are many documented cases of people finding out that someone, known or unknown to them, had taken out a life insurance policy on them. Once you find out, it can be made invalid. But you’ll no doubt be looking over your shoulder until that happens.

Are you 100% certain that nobody has taken out a policy that names you as the insured and them as the beneficiary? Could it be that an ex, boss, or disgruntled neighbor has a policy on you that you’re not aware of?

If you think that’s remotely possible, read on. You’ll learn how to find out if someone has a life insurance policy on you without you knowing about it, what you can do about it if it happens, and more.

Can Someone Take Out a Life Insurance Policy On You Without Your Consent?

Yes, it is possible, but it’s improbable. Life insurance companies have safeguards that make this very difficult for someone to do. 

Most life insurance policies require the person who’s going to be insured to take a medical exam, but that’s usually reserved for policies with face amounts of $100,000 or more. Having an exam is a sure tip-off that someone has named you as the insured on a policy.

It’s also not unusual for only a signature to be required for policies with smaller face amounts like $10,000, $25,000, or $50,000. Without telling the insured person, these smaller policies could be taken out illegally by someone who forges a signature. For this reason, life insurance companies typically call the insured to confirm that they’re aware of a policy being taken out on them.

There is one legal exception to someone taking out a life insurance policy on someone without their consent. A parent or guardian can take out a policy on a child under age 18. If the child is older than that, they’ll have to give their consent for any policy that names them as the insured person.

Steps for Finding Out if Someone Took Out a Life Insurance Policy on You

If you’re wondering how you can find out if someone took out a life insurance policy on you, here are several things you can do to uncover if there’s a fraudulent policy on you:

  • Pay attention to educational or marketing materials that you receive in the mail from an insurer that you never signed up for coverage with. For example, the life insurer may send you materials advertising additional services. Check the mail you get from them for any reference or policy numbers. 
  • If you have doubts about whether or not a company has a policy on you, call them as soon as possible and talk with policy-holder service. They can quickly tell if that’s the case. If it is, have them immediately connect you with their fraud department.
  • Check your bank statements for life insurance premium payments to a life insurance company. These payments may show up on your account if a family member committed this crime or if you’re the victim of identity theft.
  • Look through your documents and see if there’s anything there that indicates a policy covering you that you didn’t buy. For example, your spouse may have applied for group life insurance on you through their employer without you knowing about it. If you’re going to separate from your spouse or get divorced, it’s very likely the policy is still in force. 
  • It’s also possible that your parents took out a policy in your name without you knowing about it. They may have done it when you were a minor and kept it when you reached adulthood.
  • Contact your state insurance department and inquire if your state has a special fraud bureau that investigates insurance fraud. If you suspect fraud, you can call them to register a complaint.
  • Check the Medical Information Bureau (MIB) website to see if a secret policy exists with you as the insured. The MIB keeps files on consumers who have applied for individual life or health insurance in the last seven years.
  • Ask a family member’s financial advisor. If a family member worked closely with a life insurance agent, financial planner, CPA, or other financial professionals, they might have information on a policy on your life or the life of a loved one. 
  • Use policy inspector. This is a service that attempts to find existing policies. You have to pay to use its services, but it may be worth it to see if there is a policy out there on you.

What Can You Do If You Find Out a Policy Exists on Your Life?

If you discover that someone did, in fact, take out a policy on you, your first call should be to the insurance company that issued the policy. If they’re not cooperative with helping you resolve the issue, contact your state insurance department and law enforcement.

Someone taking a policy out on you without your knowledge may have committed insurance fraud and could face jail time and/or a significant fine.

Can You Cancel a Life Insurance Policy Someone Has Taken Out on You?

No, you usually can’t cancel a life insurance policy that someone took out on you. The person who took out the policy is the owner, and only they can cancel it. As the insured, you have no legal rights concerning the policy, so you can’t legally cancel it. If you know the person, friend, or relative, you can always ask the policy owner if they’ll transfer ownership to you. 

Frequently Asked Questions About Life Insurance Ownership 

If you still have questions about life insurance ownership, the answers to these frequently asked questions might help. 

Can I take out life insurance on my spouse?

Yes, you can take out a life insurance policy on your spouse if you have an insurable interest. That means that if your spouse died, it would cause you considerable financial hardship.

It’s always a good idea to get your spouse’s approval and go through the standard life insurance application process by having them take out a policy with you as the beneficiary.

Can I get life insurance issued on my parents without them knowing about it?

No, you will need your parents’ consent before taking out a policy on them. Many children help their parents buy burial or final expense insurance to cover funeral costs and related expenses, but the parents must know about it. 

Can I take out life insurance on one of my employees?

There are specific policies called “key employee” policies. Companies take these policies out on employees whose deaths would have a significant financial impact on the company. 

For example, a company that depends on a sales force to generate income may need to protect itself financially by taking out a life insurance policy on its sales manager and top salesperson.

The company may be required to provide documentation justifying the policy and proving that it would hurt the company financially if the employee passes away.

Of course, the employee must know the policy is being taken out and approve of it, and they must complete an application and medical exam if necessary.

What are the pros and cons of buying life insurance for someone else?

Like anything, there are pros and cons to taking out a life insurance policy on another person.

Pros include:

  1. As the beneficiary, you’ll receive a lump-sum death benefit that can help you pay bills and other expenses if someone you depend on for income passes away.
  2. It’s relatively easy to get a policy issued on someone else. The person who will be the insured individual will just need to answer questions on an application and submit to a non-invasive medical exam, which is paid for by the insurance company.
  3. You and the insured person will have peace of mind knowing that you’ll be protected financially in the event of their death.

Cons include:

  1. The person you want to insure has to agree to all of the plan’s details, including policy type, face amount, and riders. If they don’t, you won’t be able to buy a policy.
  2. Some people don’t like medical exams or needles and won’t submit to an exam.
  3. The money you’re spending to insure someone else’s life may be better off spent or invested elsewhere.

How can I find out if a life insurance policy is still valid?

The best way to find out if a life insurance policy is valid is to contact the company that issued the policy. Even if the policy has lapsed due to non-payment of premiums, you may still be able to get it reinstated or receive a return on your investment by receiving some dividends.

How do I avoid doing anything fraudulent when buying life insurance on someone else?

You can do a couple of things when you’re buying a life insurance policy on someone’s life to avoid breaking any rules.

First, make sure you can show that you have an insurable interest in the person. Second, be sure to have the consent of the person being insured.

What will the person I’m taking the policy out on have to do for the policy to be issued?

The first thing they’ll need to do is complete and sign an application. Next, they’ll need to provide personal information (name, address, phone number, etc.) and answer some detailed questions about their medical history. 

For larger face amounts, it’s pretty likely they’ll have to submit to a medical exam. These exams usually include a paramedic or nurse:

  • Checking vital signs, including pulse and blood pressure
  • Measuring height, weight, and body mass index
  • Collecting blood and urine samples that a laboratory will analyze
  • Confirming answers to the medical question asked on the application

Finding Out if Someone Has Insured Your Life 

It’s doubtful that someone has taken out a life insurance policy on you without your knowledge. However, if you’re concerned that it has happened, follow the steps above to find out the truth of the situation.

If you suspect that your life is in danger because someone took out a policy on you without your approval, contact the police immediately. 

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