5 Life Insurance Scams You Should Be Aware Of

The most beneficial feature of life insurance is that it ensures your loved ones have financial support after your demise. The coverage amount can be used for varied purposes like your children’s education, settling liabilities, or any other purpose of your beneficiary’s choice. Buying a life insurance policy is now easier than ever, with prominent life insurance companies selling policies online. However, you face the risk of being lured into life insurance scams when you choose to buy your policy from insurance company websites.

Insurance expert Gary P. Cubeta from Insurance for Final Expense recommends verifying the website’s authenticity before you buy a life insurance policy online.

Fake Online Quotes

In this kind of scam, the insurance company website uses fake quotes as click baits. The intention is to get users to submit their personal information in exchange for details about the quote. The personal information is then sold to insurance agents who use it to promote their business. The quotes presented on the website may be considerably lower than those provided by other insurance companies. You may want to watch out for insurance quotes that look like they are too good to be true.

Identity Theft Scams

Sometimes, scammers pose as insurance companies or insurance agents to execute the scam. The scammer may initiate a conversation with you and extract sensitive information from you under the pretense that the information is for a life insurance policy. Unassuming users may submit their bank details and other private information under the false presumption of applying for life insurance.

Professionals like Gary P. Cubeta from Insurance for Final Expenses assert it’s best to avoid submitting details like your SSN, PIN, and other account details online if you want to avoid exposure to life insurance scams. Confirm the identity of the insurance provider or agent before giving them any valuable information.

Identity theft scams may take the form of false insurance websites or fake insurance agents. Scammers may employ special measures that make it difficult for others to trace their identity. Legitimate insurance companies and agents will most likely not ask for your credit card information online.

Scammers may even run elaborate false websites that resemble the website of a reputed insurance company in the country. They may post similar logos, taglines, and descriptions to trick potential victims. The website may even offer policies that require no medical verifications or attractive offers for people with pre-existing conditions.

Issues with Your Present Life Insurance Policy

Scammers may send you emails or messages stating an issue with your current life insurance policy. The email may tell you that the insurer did not receive your last premium or that you will receive an additional bonus if you submit your credit card information. The email may resemble the regular emails that your insurance company usually sends.

Experts like Gary P. Cubeta from Insurance for Final Expenses advise customers to cross-check the authenticity of the information with their insurance company and their insurance agent before submitting details and responding to any emails relating to their insurance policy to avoid life insurance scams.

Declaring You as the Beneficiary

You may receive emails or calls telling you that you have been registered as the beneficiary of someone’s life insurance policy. The scammer will trick you into believing that you are eligible for benefits of another person’s policy and that the said person passed away, leaving you eligible to claim insurance benefits. The scammer may ask you to submit personal information like your SSN or credit card details to claim the amount. 

Overselling a Policy 

Insurance agents work for a commission. The higher the price of the policy you choose, the higher will be the agent’s commission. The commission charged by the agent is typically based on the premium of the life insurance policy.

Insurance agents trying to earn high commissions may trick you into buying expensive life insurance policies that you do not need. The policy will give you the promised benefits, but it will contain clauses and conditions that serve you no benefit.

Clauses like the double indemnity rider clause and the waiver of the premium rider clause may be completely irrelevant. The average cost of life insurance coverage in the US is approximately $125. The number could be higher for older applicants. Overspending on terms and conditions that you do not need will further increase your life insurance coverage cost.

Consider working with an expert insurance consultant to better understand the terms of your policy before buying it.

Get the Help of Insurance Experts

Working with expert insurance consultants can minimize the possibility of you falling prey to life insurance scams. Consultants can put you in touch with reputed insurance agents and insurance providers and help you with the application process. Experts can also educate you on different life insurance policies you can buy and the benefits of each of those policies.