Life insurance policy fraud: top five ways to avoid it
There are many examples of life insurance policy fraud, and many people have been affected – including individuals, businesses, and even the companies behind the life insurance policies themselves.
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The Florida life insurance policy scam
In 2004 in Florida hundreds of people aged between 70 and 94 were victims of a life insurance policy scam by salesmen who promised to save them money on their health insurance -- but instead gave them applications for whole life insurance, which carries a high commission for salesmen. The gang were said to have netted more than $2 million.
Viatical life insurance policy fraud costs the US insurance industry billions
The US life insurance industry loses millions of dollars each year in something known as viatical fraud. This involves a terminally ill person taking out one or more life insurance policy and answering “no” to all the medical questions in the application. They then send a healthy impostor to attend any medical evaluation requested by the insurance company – who frequently scoops the cash when the policyholder inevitably dies.
Man fakes death in life insurance policy fraud
And a man was sentenced to jail in Australia in 2005 after faking his own death in order to benefit from his life insurance policy.
He staged a tragic boating accident – complete with on-deck empty champagne bottles – in an attempt to fool the company underwriting his life insurance policy. Unfortunately for him (and his second wife), they refused to make the $3.5 million Australian dollar-payout until they were completely satisfied he was dead.
Top five tips to avoid life insurance policy fraud
Here are five pieces of advice on how to protect yourself against life insurance policy fraud:
- Never let yourself be pressured: there are no deadlines when applying for life insurance – so if you don’t want to rush, don’t.
- Don’t agree to anything you don’t understand: The person selling the insurance has a responsibility to explain everything to you and should always provide a “key facts” document to help make the life insurance policy clear to you.
- Be careful when buying a life insurance policy that doubles as an investment: At the very least, some of your ‘investment’ will be used to pay for your life cover – which may impact on the ‘investment’s’ profitability. Make sure you are aware how much this is – and if necessary, consult an independent financial adviser.
- Never give a salesman money without getting a receipt, and never sign a form that includes blank spaces – even if the salesman assures you they are just a formality.
- And lastly: if it sounds too good to be true, then it probably is.
Jump Money is a specialist in critical illness and life insurance cover and is happy to answer any questions you may have related to life insurance, life assurance, term assurance and life cover. The company will strive to fit an insurance package to the exact criteria you need in order to help you avoid buying products you do not need as well as helping you fully understand your purchase.
To find out more about how Jump Money can help you protect yourself and your belongings call now on 0845 8516262 or fill in an online quote form today.
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