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Top Ten Things You Need to Know About Life Insurance Fraud

Life insurance fraud is rampant and very costly, but there are things to be done about it, and ten proven areas of knowledge can be learned about his problem to help people be smarter consumers when purchasing life insurance.

  1. Bogus Agents – Phony agents are on the rise because of the Internet. They can scam people in many different ways. People need to trust their instincts. Getting excessively low life insurance instant quotes can be the first sign of a scam.
  2. Fraudulent Policy Enrollments – Many agents offer ridiculously low life insurance instant quotes that can’t possibly be realistic. This can lead to equally fraudulent new policies being issued in a person’s name so watch the fine print carefully.
  3.  Claims to be Licensed – Not every agent is licensed, especially the scammers. Just because a person gets cheap life insurance quote doesn’t mean it’s coming from a state licensed insurance broker. Contact the better business bureau and state insurance boards for the truth.
  4. Phony Website – Getting a free term life insurance quote on a website doesn’t mean the site is legitimate. Look for signs of phishing, required downloads that may be malware, etc. Legitimate sites may ask for some information like your state or zip code before getting a quote…this is fine. But before you submit any confidential or private information (especially your SSN) make sure you are securely logged into an encrypted webpage (you’ll see https:// at the top).
  5. Stealing Premiums – Finding a good rate on a free term life insurance quote online is a convenient way to compare rates. However, some scammers set up fraudulent payment schemes. So before you send a check or submit credit card information, perform due diligence with all companies who ask to collect your premiums.
  6. Letters of Coverage Lapsing – Once a person has a free term life insurance quote that appeals to him, it’s okay to take out a policy. But if frequent letters are being sent that state the policy coverage has lapsed when it really has not, this is a genuine sign of a red flag fraud case occurring.
  7. Be Careful Who Checks Are Made Out To – Only make insurance checks out to the company itself, never to the actual agent, because he can then easily pocket the money.
  8. Adding Unneeded Coverage – Some agents try to supplement their income by adding unnecessary riders to standard life insurance policies without ever telling the consumer. Read all written polices that are sent to prevent this from happening.
  9. Selling Inadequate Coverage – Many unscrupulous agents committing life insurance fraud will state that a person is fully protected when they’re really underselling adequate coverage and pocketing the difference. If the price sounds too good to be true, check your life insurance policy coverage and limits so you don’t fall for this type of fraud.
  10. Referrals into Kickback Policies – Many agents in order to earn more income will only steer potential clients into various insurance policies that generate illegal kickbacks for them. So it’s essential to thoroughly investigate any claims of unfamiliar coverage elements that an agent tries hard to sell and convince an individual with.

Related posts:

  1. HIV and Life Insurance Policies
  2. Top Ten Ways to Find a Life Insurance Policy
  3. When to Cash in my Universal Life Insurance
  4. Determining If a Life Insurance Policy was Issued in Your Name
  5. What Kind of Deaths are Not Covered by Life Insurance Policies

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