Can I write a policy for a family member and pay their premiums?

[Spin]

A family member of mine needs life insurance and may not be able to afford the premiums, is it illegal, unethical, a conflict of interest etc if I write their policy for them and cover the cost?

 

[WinoBlues]

A family member of mine needs life insurance and may not be able to afford the premiums, is it illegal, unethical, a conflict of interest etc if I write their policy for them and cover the cost?

It may boil down to the face amount and insurable interest.

I personally have owned, paid for, and been beneficiary for my wife's, kids', grandchildrens', my mothers' and brother's policies. I have written many policies were a person is payor for a relative, partner or close friend.

Sometimes a simple note in the remarks section or a cover letter is all you need. A lot will depend on size and type of the policy.

 

[Spin]

This would be a FE policy.

 

[WinoBlues]

This would be a FE policy.

Much easier.

I would suggest posting the details in the FE forum. And one of those guys can probably tell you how the company you are using will look at it.

 

[fed up]

When the application simply asks for a routing number and acct number, supply one. I would not make myself a beneficiary of the policy if at all possible

 

[Newby]

This would be a FE policy.

It’s not unethical. You do want to disclose that it is controlled business. Meaning the person that is getting paid the commission is the one making the purchase and paying decision.

The reason companies want to know that is because weak agents will abuse it. They write business for the wrong reasons. To get an advance to have working capitol. Or to just take a policy out for one year and cancel at the 13th month. If you do that, expect to get termed. It’s a scumbag move and is common at bottom-feeder agencies because the scumbag managers teach their agents to do that.

But if you are writing legit coverage on your family member and are going to keep paying the premium ongoing, it is perfectly fine.

 

[WinoBlues]

When the application simply asks for a routing number and acct number, supply one. I would not make myself a beneficiary of the policy if at all possible

Beneficiary - Curious as to why?

 

[Baseball7]

Short answer

Yes.

 

[fed up]

Beneficiary - Curious as to why?

Raises eyebrows

 

[WinoBlues]

Raises eyebrows

In my experience both personal and with clients it has not been a problem. In the case of a friend being owner and bene it may take a cover letter or an explanation especially if the face is say $100,000 or more. But for a little >$25,000 FE policy it has not been an issue. For me.

I find most underwriters just need cover. A reason to say yes.