A key component of long-term financial planning is preparing and saving for your family’s secure future. A life insurance policy is an investment that most individuals make that guarantees your loved ones will have stability and financial protection in the event of your untimely death.
However, just like in any other industry, fraudsters have developed a number of cunning strategies to exploit the system. Bill Schantz stresses that one of the most prevalent sorts of fraud is insurance fraud, which can occur in a variety of ways.
Bill Schantz Explains Potential Signs of Insurance Fraud
The Submission Procedure Is Hurried
The fact that the majority of insurance companies require a medical exam as part of the application process is one of the first things you should be aware of. This is done to assess the risk associated with issuing a policy and to confirm the applicant’s health information as per Bill Schantz.
It should be a significant red flag if an agent rushes you through the procedure and makes no mention of a medical checkup. A trustworthy representative will take the time to address any questions you may have and make sure you comprehend all the procedures involved in applying for a life insurance policy.
Working with an Unauthorized Agent
An agent must hold a license in the state in which they are conducting business in order to sell life insurance. The company’s website typically contains this information, or you can contact the state’s insurance commissioner to confirm the agent’s credentials. When an agent lacks a license, it is obvious that they are not trustworthy, and you should avoid doing business with them.
An Agent Using Undue Pressure Is a Red Flag According to Bill Schantz
The purchase of life insurance is a significant decision, and you shouldn’t ever sense any pressure to do so. A trustworthy agent will acknowledge that this is a significant choice and will give you some time to consider it before moving forward. Finding another agent to work with is advised if an agent is utilizing high-pressure tactics or rushing you towards purchasing a policy.
The Salesperson Requests Personal Information Right Away
A life insurance salesperson shouldn’t ask for more information than is necessary; but, most life insurance firms do demand some personal information up front in order to present you with a quote. Before giving you a quote, be aware of any agent who requests specific details about you, like your Social Security number or bank account information.
Majority of the time, all an agent will need to provide you a quotation is some basic information like your name, birthdate, and whether or not you smoke. They may be committing fraud if they demand more than that, Bill Schantz notes.
The Quoted Premium Is Far Below Average
The cost of life insurance depends on a number of variables, including your age, general health, and the kind of policy you want. However, it’s a warning indication if an agent offers you a premium that is much less than the industry standard.
When an agent quotes you a premium that seems too good to be true, it most often is. Before selecting a life insurance policy, make sure you compare prices and obtain several estimates to ensure you’re getting a fair deal.
Conclusion
If you’re working with an agency and something just doesn’t feel right, trust your instincts, advises Bill Schantz. Although there are many distinct indicators of probable fraud, sometimes your own gut is the greatest one. It’s wise to err on the side of caution and look for someone else to work with if you have any reservations or worries about an agent. When it comes to life insurance fraud, it is better to be safe than sorry.