How to Avoid Life Insurance Scam?

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  • Post last modified:February 11, 2020

People purchase life insurance because they want financial protection for the future. So, you need to choose the insurance provider carefully. You need to ensure that the provider you are contacting belongs to the authentic insurance company.

You might be excited about buying the insurance, and anyone will try the tricks to play with you by providing fraudulent policies. They will capture your attention in many ways. Therefore, you need to be careful about the life insurance scams.

You are less likely to fall into the scams and frauds if you understand the policies and how life insurance works. Get the details of the types of life insurance along with the procedure of locating a reputable company.

Do not just rely on the rates and advantages, also check out the reviews and their previous record to ensure your safety and avoid any frauds. And to look out for the best deal you need to make sure of the company is reliable or not.

Points to Avoid Life Insurance Scam

Understanding of any subject is the first step to avoid fraud, lies, and scams. We live in a digital world, and people have marvelous skills that are mostly misusing instead of rightly using them. So, one must know in the depth to stay safe from the frauds.

  • Know the Needs

You shouldn’t buy the policy just because someone is offering you a considerable insurance policy. You have to make a list of your needs. Be clear about your requirements regarding the policy.

You may need the health insurance, property, car, education or anything. So, any policy is only right if you need it. Otherwise, you must keep looking for the options until one fits your needs.

  • Type of Insurance You Require

The next important thing is the type of insurance. There are several types of insurance, and every type has its benefits and drawbacks. Now it depends on your affordability and needs what type of policy is suitable for you.

So, get detailed information about the different types of insurance before you decide the purchase of it. Understand every type and ask an expert in case of confusion. Avoid any assumptions about them.

  • Get the Details of the Quote

Comparison is necessary, and one should never take the bait because it sounds convenient. Some insurance policies are expensive for no reason while others pay the price through the amazing benefits.

So, break down the rates and know if they worth your money or not.

  • Keep the Information Confidential

Never provide personal information about your business to the insurance company. No insurance company or agent needs the private details of your business for getting the basic quote. You need to be more careful if you are inquiring over the internet. Scams over the digital platforms are more common than in person.

  • Do Not Rush the Decision

A wise person will always take time in making decisions. So, be the one and do not rush your decisions. Any company may try to trick you into purchasing the first offer made by them. But you must check out every bit of the policy, understand the points and ensure the decision you made is perfect for you.

  • Ask for the Receipt

Never take the request of receipt for granted, and make sure you keep the track of your premiums for yourself. Do not just depend on the company for formalities and payment tracking.

  • Do NOT Pay Premiums in Cash

Never pay your premiums in cash even if the agent is asking for it. It may lead to premium theft. Agents collect cash from the customer and do not pay to the companies. So, be aware of these kinds of frauds too.

  • Read the Policy Documents

Always read the policy of the documents in detail. You don’t have to believe anything they said. So, read it out in detail. Ask for clarification if you have any doubts otherwise, contact the legal advisor to guide you about the details mentioned in the documents.

  • Do Not Sign Any Paper with Empty Spaces

There is another way of tricking you into the scam and that is through leaving the empty spaces in the paper or document. So, you must not sign any documents with empty places. So, check out the paper or any document that is included in the formal process of it.

  • Compare the Copies of Every Document

You might need to get the copies of the policy document and other papers that needed to sign. So, compare every copy. Check if they have altered any minor detail in it. Because any certain change can cause trouble in the future. So, be careful with the details on the copy too.

  • Check If the Offer is TOO Good to Be True

There is some policy offered with marvelous benefits. They are so amazing that they seem too good to be true. Therefore, if you are suspicious of the conditions, you might need to check the details of the policy and also get more information about the company.

How to Identify a Scam?

Understanding your side of the story and securing your ways of getting life insurance is only part of purchasing life insurance without getting into a trap of fraud. So, there are some more points that you must consider for identifying the scams immediately.

  • Check If the Company Exists in Real

Check if the company exists in real or not. Fraud agents and companies have many tricks to get your attention. They can use social media and reach out to you in many other ways too.

So, before you deal with them only on the internet of call, you must get the details of the company. If a company has no physical presence. Check for unfamiliar names, lower prices, agents asking to pay a premium in cash or providing vague details on your questions.

  • Know About the Premium Theft

Premium theft is the term used when you pay the amount to agents and the company is not receiving any of them. So, the foremost thing is to never pay the premium in cash and an odd case is, you have done this, you must cross-check from the company if they have received the payment or not.

Avoid the premium theft under any circumstances and always pay your premiums through the bank accounts.

  • Get Another Opinion

Be open to second opinions. If the agent is asking you to buy the expensive policy, do not rush the decision and seek the second opinion or advice from an expert or professional.

Moreover, you can also seek a second opinion about the company, policies and legal formalities. Understand each and everything before deciding anything on your own. Frauds can look quite real and authentic, but you need to stay alert and judge their intentions.

Find Reputable Insurance Company or Agent

The most important thing to avoid any company with an unfamiliar name. Ask for recommendations and also check out for the reputation of the company.

So, before you trust the company with your money, you must ensure if the company is reliable and trustworthy or not.

  • Solid Financial Strength

It is not only the company that checks all the factors of a customer before offering the insurance. It is also liable to the customer to check the financial stability and financial condition.

There are institutions under the government authority that may provide you ratings, or you can ask other sources about it. So, make sure that the company is financially strong and won’t leave you in the middle.

  • Reviews and Complaints About the Company

Reviews from other customers and rating is also an essential thing and it must bother to a larger extent. So, check out the reviews and most importantly lookup for the complaints that people have made. These complaints can be the real ones and might become a problem for you too in the future.

  • Reputation in the Market

Reputation matters. If someone is saying that you must not bother it, do not listen to them. It matters because you can’t trust the unreliable company regardless of how good they are working and maybe offering the most suitable policies. They might not have a good record at the backend.

So, check it out too.

Final Thoughts

Understand your needs and do not miss any single detail about the policy and the company. Remember that it is a matter of money, and you need to calculate the worth of every penny you are paying them.

Therefore, the company has to be authentic, and you should consider all the factors mentioned in the blog. Do not hesitate in sharing the factors you have in mind.

Let’s just stay alert and avoid scams of any kind!!

Linda Chavez

I'm a burial & senior life insurance expert, independent agent, Founder & CEO of Seniors Life Insurance Finder. I have been working in this sector since 2004 and established my own company in 2014. I have a team of seven members, and we are trying hard to share the knowledge we've gathered. We know how difficult often it is to find an affordable policy. Hence, we are doing our best to help you.