Even while life insurance has the potential to be a useful financial instrument, it’s crucial to be aware of the risk of fraud it poses. When someone lies about oneself to gain a policy or benefits they are not otherwise entitled to, it is called life insurance fraud. There are numerous ways through which shady individuals and groups execute these scams which is why Bill Schantz emphasizes to be wary of them at all times.
Common Scams per Bill Schantz
This kind of fraud, according to Bill Schantz, takes place when the policy owner gives false information on their life insurance application in order to receive a policy with reduced rates or to gain the coverage they would not otherwise be eligible for.
A beneficiary is someone who fraudulently claims to be the beneficiary of a life insurance policy in order to receive benefits they are not legally entitled to. This may occur if the beneficiary misrepresents their relationship to the insured or signs documents in the insured’s place without authorization in order to gain access to the policy monies.
The act of filing a fake or inflated life insurance claim in order to get benefits to which they are not legally entitled is known as claims fraud. This could occur if the claimant purposefully exaggerates the circumstances surrounding the insured’s passing or if they fabricate evidence to substantiate their case.
Tips to Avoid Insurance Fraud as Bill Schantz Notes
Examine Life Insurance Policies In Detail
Any life insurance policy should be carefully reviewed before being signed. Make certain that the application is complete and accurate, and that you are aware of all the policy’s terms and conditions. Prior to you signing anything, make sure to ask any questions you may have.
Be Wary of Policy Salespeople at All Times
Those that attempt to offer you a life insurance policy without first getting to know you and your needs should be avoided. Before offering a policy, a trustworthy insurance professional will take the time to comprehend your particular financial circumstances. Additionally, you should avoid anyone who tries to rush you through the application process or presses you to acquire a life insurance policy.
If you are not completely certain that someone is allowed to receive your personal information, do not give it to them. Your social security number, birthdate, and bank or credit card numbers fall under this category.
Give no personal information to anyone who contacts you on behalf of your life insurance provider unless you are completely positive that they are who they say they are. Hang up and call the customer support number listed on your policy to verify their identity if you have any questions.
Life Insurance Plans that Seem “Too Good to Be True”
Anyone offering to sell you a life insurance policy that pays out if you pass away from a specific cause, like an accident or natural disaster, should raise your suspicions. These insurance policies are frequently used to commit fraud and are typically unavailable to the general public.
Anyone who asks you to purchase a life insurance policy on the life of another person without that person’s knowledge or consent should be avoided. This is frequently used to commit fraud and is known as stranger-originated life insurance (STOLI).
Although life insurance can be useful, it’s crucial to be aware of the possibility of fraud. By following Bill Schantz‘s advice, you can help safeguard yourself from falling victim to life insurance scams.