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Tips for Avoiding Life Insurance Scams

Tips for Avoiding Life Insurance Scams

Having a life insurance policy is a smart and responsible way to ensure that employees’ loved ones are taken care of in the event of death. Unfortunately, sometimes an organization can be taken advantage of by scammers selling fraudulent policies.

When trying to compare rates and policies, many business managers and human resource professionals turn to the internet for help. This can be a good idea, especially when trying to seek out the very best deal. But it’s good to know how to be careful when comparison shopping online.

Know What Is Needed

One of the things that make organizations vulnerable to a scam is not knowing what products are needed. By telling the agent exactly what is desired, they will have less of a chance of offering something that is neither wanted nor needed.

Keep Private Information, Just That – Private

Never offer any personal information (especially over the internet) about the business or employees simply to obtain an insurance quote.  No insurance company needs detailed information like a social security number in order to provide a basic quote. Sure, they will ask for that information when individuals apply for a policy; but not beforehand.

Look for a Reputable Company to Deal With

Many companies offer term life insurance policies. When choosing a plan, be sure to pick an insurer that has an industry rating of at least a AAA or A+++.  To ensure a good reputation, check out their website, ask for referrals, do a Google search, check for disgruntled policyholders on blogs and even request the most recent copy of their annual financial report. Following these simple steps should help avoid companies that are blatantly fraudulent.

Never Make a Quick Decision

Picking the right level term insurance for business (or any other plan for that matter) takes time and patience. Don’t allow any agent to rush a quick decision. There is no such thing as an insurance sale or one time only offer in this business. A quote that is solid today will still be good in a week.

Never Pay Premiums in Cash

A cash only deal is a tell tale sign that something isn’t right.  Always pay your insurance premiums with a check or money order.  Even if an insurance company is in good standing, does not necessarily mean that the agent is.

Always Get a Receipt

Be sure to get a written invoice or a receipt for every premium paid. Even having a cancelled check, should any payment discrepancy arise, will allow proof of payment with a signed receipt from the agent.

Never Sign Any Documents with Empty Spaces

By leaving empty spaces, there is no way to control what is added to the spaces later. Be sure to make some markings on in the spaces to ensure nothing can be added after signing the policy. There have actually been instances where the scammer puts his own name in the line, becoming the policies beneficiary; leaving the insured’s family out of luck.

Read the Entire Document

Don’t just read the first page of the policy; read the entire policy before signing on the dotted line. Some policies add stipulations. Ask for clarification when something is not understood, or better yet, let someone else (like a lawyer) look it over before signing.

Make Sure Everything Matches

Be sure to compare copies of the signed policy with the final version received in the mail later. If there are any discrepancies, contact the Better Business Bureau and a lawyer right away to protect your rights under the policy contract.

If a Deal Sounds Too Good to Be True, It Probably Is

Too good to be true deals usually are and should be avoided.

It is sad but true, thousands of people and businesses fall victim to insurance scams each year. While many companies highlight some of their best insurance deals via the internet, there are also many more scammers using this technology to reel in suckers anxious to get something for nothing. To remain safe from scams, be sure to follow the tips listed above and be smart when making insurance decisions.  If you feel uncomfortable, remember to take the time needed to make sure everything is valid before moving forward.

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