insurance fraud is a black eye on both life insurance and life insurance customers. Both sides have been guilty of a life insurance fraud and will be back – especially since, unfortunately, fraud appears to be increasing according to the most statistical measures.
Research on non-profit The Coalition Against Insurance Fraud concluded that life insurance fraud committed by all parties cost the average household $ 1,650 a year and increases life insurance premiums by 25%.
Life insurers are often guilty of insurance fraud in the form of their agents make “churning”. This is where the agent seeks to stop the current policy of life insurance and replace it with a new policy that is paid for by the “juice”, or the cash value of your existing policy. Drugs do this to get more commissions for themselves without having to look for new opportunities for the company. Churning can lead to increased premiums to the client and explain the costs out of the cash values.
Another insurance fraud practiced by agents, however, is called “windowing”. This is where, being unable to reach the signature of the client or the applicant has the necessary document but when these signatures elsewhere, the agent has a signed document back to the unsigned document, presses it against the window to make the light shine through, and traces the signature with a pen in order to design a signature client or applicant.
When a large company name insurance companies have their agents do bad things it makes big headlines, but the fact is that the public is far more guilty of insurance fraud but companies are. And of course make false claims is a thing that they do the most, which is why all the requirements of the life insurance death benefit payouts are subject to investigation.
But wrongly stated income or background information is another form of insurance fraud often involved in the consumers. They might be embarrassed by their medical history or income, or they may realize that if they tell the truth they will have their coverage reduced or their premiums will be very high. If a life insurance company finds someone lied on their application and they have the right to pay the claim or not pay the full death benefit on the situation and policies.
But there are things that life insurance buyers can do to protect themselves against insurance fraud, since they have limited investigative resources of the life insurance companies do.
Remember that when it comes to life insurance, if it sounds too good to be true, it probably is. There is no free lunch.
Save all your life insurance paperwork, including obtaining receipts for every penny you give the agent, and never ignore any notifications from your life insurance company.
Life is never free and there is no pension plan, although certain trends can indeed become self-financing – they never start that way.
Never buy any review that you feel strongly is unnecessary, never let yourself be pressured, and never borrow to fund life insurance.
Although it may be part of the portfolio, insurance is the number one role is protection against the unforeseen – and most people do not need life insurance in later years. It is intended to be temporary.