Research by the non-profit The Coalition Against Insurance Fraud comes to the conclusion that the insurance of life insurance committed by all parties costs an average household $ 1650 per year and increases premiums for life insurance by 25%.
Life insurers are often guilty of insurance fraud in the form of their agents who “churning”. The place the agent seeks to cancel your existing life insurance policy and replace it with a new policy that is paid for by the “juice” or money value in your existing policy. Agents do this to earn more commissions for themselves without seeking new prospects for business. Churning can result in an increased premiums for a customer and costs them clearly of their money value.
Another insurance fraud practiced by agents, but is called “windows”. In this case, the agent could not obtain the signature of a client or applicant on a necessary document, but he had already signed it, and kept a signed document behind the unsigned document. Over the signature with a pen to forge the signature of the client or applicant.
When big name insurance companies have their agents do bad things, it makes big headlines, but the reality is that the public is much more guilty of insurance fraud than companies. And obviously the false claims is the thing they do the most, which is all that claims on life insurance death benefit payments are subject to investigation.
But incorrectly stating information about background or financial income is another form of insurance fraud that consumers often encounter. They may be embarrassed by their medical history or income, or they may realize that if they tell the truth, the coverage will be reduced or their premiums will be very high. If a life insurance company finds that someone lied on his application, they have the right not to pay the claim or not pay the full death benefit depending on the circumstances and the policy.
There are things that buyers of life insurance can do to protect themselves against insurance fraud, because they do not have the large investigative resources that life insurance companies do.
Remember that it probably comes in life insurance if it sounds too good to be true. There is no free lunch.
Save all your paper for life insurance, including receipts for every penny you give your agent, and never ignore any notifications from your life insurance company.
Life insurance is never free and this is not a pension plan, although certain policies can really become self-funding – but they never start on the road.
Never buy any coverage that you feel strongly is unnecessary, never allow yourself stress and never borrow to finance life insurance.
While this may be part of an investment portfolio, the number one role of life insurance is protection against unforeseen – and most people do not need life insurance in their later years. It is intended to be temporary.