The purpose of life insurance is to protect your family financially in the event of your passing, but falling for a life insurance scam can have the opposite effect. How can you protect yourself and your loved ones? Keep reading to learn what scams are out there and how to prevent falling for them.
Scammers may get in touch with you via email, phone, or text message while posing as someone else and asking for cash or personal data. They may claim there’s an issue with your policy in order to get your social security number.
How to avoid being scammed: Avoid clicking on suspicious links or email or text attachments. Check all correspondence carefully for typos or strange email addresses that can indicate a scam. If someone calls you claiming to be from the insurance company you have a policy with, hang up and contact the company yourself. Never divulge private information to unknown contacts, especially financial information.
Scammers may claim that you are the beneficiary of a recently deceased person’s life insurance. They’ll say that even though the policy was specified as you, they cannot pay you because of some unpaid premium balance. If you just lost a loved one, be on the lookout for this fraud. To discover possible victims, thieves frequently search obituaries.
How to avoid being scammed: Don’t divulge any personal information or provide money to the con artists. If the insurance provider is authentic, get in touch with them directly using the information on their website after consulting your state’s insurance department. If you can, look through any documents that your loved one may have left behind to see if there are any life insurance policy details.
Without a license, scammers market fake insurance policies and pocket the premiums.
How to avoid being scammed: Ensure the company and agent are licensed by contacting your state’s insurance department before making an insurance purchase.
Untrustworthy insurance brokers will use financial bonuses to persuade you to switch plans or buy more coverage using cash value. The new coverage might not be any better than your current policy and is frequently more expensive or limiting, but they will make a commission on the sale.
How to avoid being scammed: Only alter your permanent life insurance coverage after first comprehending the associated costs, limitations, and advantages. Inquire about the insurance agent’s relationship to the product’s commission.
Insurance agents may impersonate you to access your account, change the beneficiary, or access other linked accounts by using a forged signature.
How to avoid being scammed: Ensure that the insurance agents you use are licensed. Every year, check the specifics of your policy to make sure that nothing has changed without your permission.
What it means is that insurance con artists entice you with promises of lower premiums before switching you to a policy with less coverage. Even worse, they might convert your permanent life insurance to a less expensive term policy.
How to avoid being scammed: Never consent to a modification in your policy without first having the specifics in writing. You should seek the advice of a lawyer or financial counselor.
Insurance agents may try to upsell you on add-ons you don’t need. Due to their numerous restrictions and limitations, such policies might not be worth the cost
How to avoid being scammed: A reputable, certified insurance agent can assist you in determining how much insurance you require and in accurately identifying potential dangers. Know the policy’s restrictions and limitations before purchasing it.
Scams involving life insurance can jeopardize your finances and possibly your identity. Fortunately, guides like ours exist to help keep you safe.