A lot of people don’t know this but amazingly life insurance fraud cost millions of dollars every year. These frauds includes a number of nefarious activities that has to do with sales of life insurance policies and often involves criminal scheming which usually isn’t violent in nature just lucrative.
There are a few things you could do to avoid being a victim of life insurance scam, here are some of them.
• As a rule, verify that the insurance company you intend to buy life insurance coverage from is licensed with your state department of insurance before making payment for your life insurance policy. The reason being that policies issued by non-licensed insurance companies is worth zilch so if an insurance agent or broker does not let you have adequate information about the company underwriting the life insurance policy, don’t even go there.
• Some fraudulent insurance agents/brokers retain policy premiums paid by customers instead of sending it to the insurance company, in a case like this no policy will be issued and even existing coverage will be terminated, so if after you sign up for your life insurance and make a down payment you don’t receive a policy in your mail go directly straight to the insurance company. Making checks payable to the insurance company and not the insurance agent is the best way to avoid this premium fraud and also don’t make payments with cash because cash transactions makes stealing your money a cinch for fraudster insurance agents.
• Make sure the insurance agent or broker you are dealing with is a full time licensed agent, it’s illegal to operate as an insurance agent or broker without the proper credentials. Verify that the agent is licensed by putting a call to your state insurance department to get assurance that the insurance agent you are dealing with has an up to date and real license.
• Always read all fine prints on all offers and ask what charges you are liable for on each deal, this is so because some fraudulent insurance agent might urge you to upgrade existing policies unnecessarily or to buy additional coverage or even suggest you purchase financial products you don’t need. Most probably the insurance agent or broker makes money off these transactions at your own expense so if you are contacted about existing policy and told that it’s not okay for your needs and the insurance agent or broker is somewhat pushy and seems anxious to replace your existing coverage, beware, that could be your warning sign.
• Never for any reason give false information on your insurance documentation or lie to the insurance investigators. This could result in your insurance policy being cancelled and you could lose your insurance claim. Make sure your health and medical history is upright, you don’t want to be paying premiums on your life insurance coverage and at the end of it all some false information stops you or your family from getting your insurance claim when it’s most expedient.
