- Protecting yourself against life insurance policy fraud
- June 30, 2015
A life insurance policy is designed to provide a steady flow of income for the policyholder’s family should he or she die suddenly. However, there have been incidents where unscrupulous individuals have taken advantage of the impending death of a stranger.
An anonymous consumer, whose brother recently died, wrote to Bankrate expert Don Taylor, saying that a life insurance policy was taken out on him just one month before his death. Because of this, she writes, social security has refused to pay off the brother’s medical bills, and his widow and child are in a difficult financial spot.
Taylor said that these facts make fraud a distinct possibility in this case, recommending that all of the relevant details be reported to state regulators and to the insurance company. The latter could begin legal action to recover the death benefit and begin to rectify the mistake, noted Taylor.
The FBI offers a list of common fraud schemes to help people avoid being victims. Basic tips to help in any scenario are as follows:
· Never sign blank insurance forms
· Get the names and extensions of customer service representatives and call back to verify their reality
· Investigate the reputation of the company
· Get a physical address
· Check e-mail addresses, send a response to make sure it is valid
· Websites can be deceiving so it is not the best to measure validity
· Check out the security encryption on the website
· Be careful of companies outside of your country
· Guard account information carefully
· Do not invest or purchase anything unless you understand the ins and outs
· Be wary of any opportunity that seems too good
In order to avoid becoming a victim of fraud, insurance experts suggest keeping track of all life insurance policies and updating your will when there is a serious life change.
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