No one wants to think about being scammed, but unfortunately, it’s a risk we all face when applying for life insurance and the like. Life insurance scams are especially prevalent, and can be devastating if you’re not careful. In this guide, William Schantz of Mid Atlantic Financial LLC will show you how to spot life insurance scams and, more importantly, how to avoid them.
Types of Life Insurance Scams
William Schantz has extensive knowledge on the different types of life insurance scams out there. Some of the most common ones include:
Phony Contacts
You may receive a call or email from someone claiming to be from a life insurance company, asking you to update your contact information. They may even say they need to verify your identity. This is a scam. Do not give out any personal information – hang up the phone or delete the email.
Beneficiary Scam
In this scam, someone will contact you claiming to be a life insurance agent or representative. They’ll say that the policyholder has named you as a beneficiary, and ask for your personal information to process the claim. Again, do not give out any information. You can verify beneficiaries by contacting the life insurance company directly.
Free-Look Period Scam
Some scammers will tell you that you have a “free-look” period, during which you can cancel your life insurance policy without penalty. They may even say they’ll refund your premiums. This is not true – there is no such thing as a free-look period for life insurance policies. If someone tries to sell you a policy with this guarantee, it’s a scam.
Forgery
In this scam, someone will forge your signature on a life insurance policy, name themselves as the beneficiary, and then file a claim after you die. This is a serious crime, and William Schantz suggests that you should immediately report it to the police if it happens to you.
Premium Diversion
In premium diversion scams, the scammer will set up a fake life insurance policy in your name and then divert the premiums to their own account. This can leave you with no coverage if you actually need to make a claim. To avoid this, only purchase life insurance policies from reputable companies and never give your bank account information to someone you don’t know.
Changing the Policies
Some scammers will try to sell you a life insurance policy and then later convince you to change the beneficiaries or other information on the policy. They may even say they need to do this in order to process your claim. Do not make any changes to your policy without first verifying with the life insurance company that the person requesting the change is legitimate.
Conclusion
Life insurance scams are unfortunately common, but there are steps you can take to protect yourself. William Schantz advises you to be wary of anyone who contacts you unsolicited and to never give out personal information or make changes to your policy without verifying with the life insurance company first. If you’re ever in doubt, contact your state’s insurance department for more information.