Life insurance scams occur when an insurance holder or agent falsifies information to benefit from life insurance benefits. Usually, old people are the target of this kind of fraud. Most times, they fall victim while trying to either change or upgrade their life insurance policy.
Fraudsters make use of different tactics to deceive their victims. They often bring out bargains that are exceptionally beneficial for the insured. Several insurance frauds are prevalent in the United States of America. Thanks to this article, we will be focusing on the kinds of life insurance scams. Additionally, we would also be looking at ways to avoid them.
Types Of Life Insurance Scams
Here are some common life insurance scams:
Money Request Scams
Most times, scammers would need your private information to carry out their plans. They might call you or meet you personally for these details.
For instance, they can inform you that you have a problem with your policy plan. In a bid to solve the issue, life insurance scammers would obtain private information from you. They would claim to fix this issue for you.
Another tactic they use is to request cash from you. They would not ask you straight away. Scammers often pose a problem to you as an avenue to request payment. Just like any fraudster, they would request the payment instantly. To pay them, you would need to give them your credit card number.
To avert this, you need to keep in touch with your insurer. Your insurer is in the best position to advise you on what steps to take. Never believe a random caller that asks you to call out your credit card.
Fake Beneficiaries
Another popular tactic scammers use is a fake beneficiary. How does this work? This works only if you recently lost a relative- an insured policyholder in death.
Scammers would call and inform you that you are the next in line to be indemnified due to the policy of the deceased. However, the big bait is that you would need to pay a fee for that.
Normally, news of this nature would gladden the hearts of the beneficiary. But, do not be swayed! This is another tactic used. Never let loose. Instead, try to reach out to the insurance company of the deceased! This would go a long way in guiding you.
Fake Insurance Agreement
This is another scam to be wary of! Normally, an insurance agent would spell out the contract of the insurance to you before signing, right?
In this case, a fake insurance agent may pose to have your interest at heart. They may issue a fake insurance contract that claims to be better than that of your company. It is important to note that there is usually an underlying information.
This contract would not provide additional coverage for you. Instead, the “fake” contact would request more money from you.
Siphoning Of Premium
First off, a Premium is a periodic payment paid to the insurance company for a particular policy as stated in the insurance contract. This kind of fraud exists when insurance agents siphon your premium.
Instead of paying the insurance company, they would pocket it. It is advised that you do not send premium payments to the personal number of agents. Instead, send your money directly to the insurance company.
How To Report Life Insurance Fraud
This section of this article provides ways to report life insurance fraud. Here are steps to report insurance fraud:
Step 1: Contact Your State Bureau
The first step to take is to consult the Fraud Unit. This unit is responsible for investigating and arresting fraudulent individuals in the insurance sector. Aside from the Fraud Unit, you can also report this case to the Federal Trade Commission and the National Insurance Crime Bureau.
Step 2: Provide Evidence
Of course, it may not be possible to notice when somebody is about to scam you.
However, you can provide the details the fraudsters disclosed to you. For example, most fraudsters may tell you their names. If possible, provide the phone call recording of the conversation.
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Step 3: Monitor Credit Card Payment
The next step involves monitoring your credit card transactions. Most times, scammers tend to obtain your credit card number. If you have told them yours, monitor the transaction carried out. Do well to call your bank to stop any transactions with any third party.
Step 4: Hire A Lawyer
You could invite a legal team to review the case. After due investigation, you can press charges against the scammer. Additionally, you can also use the scammer following the provision made by the law.
How To Avoid Life Insurance Scams
Here are tips to follow to avoid life insurance scams:
• Conduct research before supplying private details to a third party.
• Work with a familiar insurance company in the USA.
• Never include your credit card details in an insurance contract.
• Never disclose your Social Security Number to a third party.
Conclusion
Life insurance scams have been on the rise in recent times. Of course, the victims are usually current clients of insurance companies. When you suspect any issue of insurance fraud, report it to the right authorities!