When a person dies, having a life insurance policy can benefit their family by providing a temporary stream of income to help pay for expenses and debt. But unfortunately, it can become a dangerous tool in the wrong hands.
Every state has strict rules, which govern the insurance industry, and awareness of common scams is listed on their websites to alert the consumer of unethical practices. According to the Department of Financial Services for New York, avoiding insurance fraud really means using common sense. They provide guides to auto, homeowners, long-term car and health insurance industries as well as understanding annuity products.
The following provides valuable advice to avoid becoming a victim:
-Do your research
-Know your agent or broker
-Always respond to any notices from insurance company
-Keep insurance papers in secure file to avoid identity theft
-Get receipt for payments made
-Get a copy of policy
-Read your policy documentation thoroughly
-If using your life insurance as an investment, understand exactly what is taking place and benefits that are being offered.
It is estimated that insurance fraud costs the United States over $80 billion dollars or more a year. The Division of Insurance Fraud in Florida is ranked as one of the leading examples of departments that fight against insurance fraud. Contact your state authorities if you have questions about possible insurance fraud and understanding the process to file a complaint.