Law Commission consults on changes to life insurance law
Consumers should be able to insure the life of their children or people on whom they are economically dependent, the Law Commission has proposed.
In a consultation paper issued today, the Commission suggests that the law on life insurance is currently “unduly restrictive”. People can only insure their own life and that of their spouse for an unlimited amount, and not the life of a cohabitant, child or parent. In order to insure the life of another person they must be able to show that the death of that person would mean that they lost money they were legally entitled to.
The consultation paper suggests that it should be enough to show that the death of the insured would result in the policyholder suffering an economic loss. There is also a suggestion that people living together should be able to insure each others’ lives without having to show an economic loss, as married couples can.
It is proposed that parents should be entitled to take out insurance on the life of a child under 18, possibly for a capped amount.