5 Common Life Insurance Scams

Purchasing insurance requires giving a lot of personal information to insurers, and scammers know this: they will try to get you to purchase a policy just so they can get your private and sensitive information. The last thing anyone wants to deal with is a scammer. Between the constant scam call, texts, and emails that people get every day, you have probably become more cautious and suspicious than ever. But did you know that there are life insurance scams too? Whether you currently have a life insurance policy or are looking to purchase one, you need to be aware of the scams that are out there and know how to protect yourself. 

1. Fraudulent Websites scam on a computer and laptop

If you are searching for a new life insurance policy, you know that googling life insurance will bring up hundreds of companies. Unfortunately, some of the companies that claim to sell life insurance actually don’t – they are just fake companies that are trying to steal information from people looking to purchase insurance. The best way to protect yourself is to check the Better Business Bureau to confirm a business’s legitimacy.

2. Fake Calls

Some scammers who know you are on the hunt for a new life insurance policy might call you pretending to be an agent, and claim they can help you find a life insurance policy. If someone calls you from a life insurance company, ask them to verify their affiliation and then make sure to research the company online. They also should be able to provide you with a license number, known as a national producer number; once they have given you that, you can look up the number to verify if it is legitimate or not.

3. Beneficiary Scams

Not all scams happen when you’re looking to purchase a policy: unfortunately, there are scammers out there who will try to use your grief against you. They will find people who have recently passed away and email or call their loved ones, telling them that they are the beneficiary of a very large life insurance policy, but that they will first need to pay any outstanding premium balance to receive the money.

This is a very elaborate scam, but it does happen more than you might think. So if you do receive a phone call or email like this, contact the insurance company that the person claims they are affiliated with before taking any further action. 

4.Spam Emails/Texts laptop screen with a caution sign on it

Some scams can also be related to your existing policy. These scams are often similar to those scam emails or text messages claiming to be from your bank, saying that there are issues with your account, and asking you to click on a link to address the issue (which you already know never to do!) In these cases, life insurance scammers will say that there is an issue with your current policy, ask you to click on a link, and then either make a payment immediately or enter your personal information.

If you ever receive a text or an email that claims to be from your life insurance company, the best thing to do is to call your insurer and see if there is an actual issue with your policy.

5. Policy Changes

So you found a life insurance company online and purchased a policy from them, only to find out that your premium payments are double what you should be paying. This should be a red flag. Even “legitimate” online life insurance companies can scam you by switching you to a higher value policy without your consent or permission.

The best way to protect yourself is to keep your policy documents in a safe spot so that you know exactly what you have agreed to, and so you can contact your life insurance company immediately if there are any changes or inconsistencies. In addition, as we pointed out earlier, you should only work with reputable, top-rated life insurance companies. 

Working With A Legitimate Company

Your family has financial obligations that will not go away when you are gone; they will need your help more than ever with their expenses, and the last thing you want them to worry about is money while they are grieving. There are a lot of great, reputable life insurance companies out there, who can offer you multiple life insurance options that will provide enough money for your family, for a low monthly price. The best way to find the right life insurance policy for you and your specific needs is by working with an agent who specializes in life insurance. We have provided the top life insurance companies in the nation below; each offers hassle-free assistance and the most competitive rates. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

What is Insurable Interest in Life Insurance?

When many people think of life insurance, they think of purchasing a policy that will benefit their loved ones after they pass. But have you ever considered purchasing a life insurance policy on another person who you are financially dependent on? If you buy a policy to insure another person’s life that means you will be the beneficial owner, and will receive the benefits after the insured person dies; in order to purchase a policy and get the benefits, though, you will have to prove an insurable interest in, or financial dependency on, the insured person. Before you decide to buy a policy, you need to understand what insurable interest is, and know how you will have to prove it. 

What Is Insurable Interest?

african american man and woman looking at each other
You can take out a life insurance policy on a loved one as long as you can prove insurable interest.

When it comes to purchasing life insurance, you can’t take a life insurance policy out on just anyone: if you want to buy a life insurance policy on someone else and be considered the beneficiary, you have to be able to show an insurable interest in that person, which means that you would experience a financial loss or other hardship in the event of that person’s death. A good example of people with insurable interest in each other would be spouses wanting to protect themselves from loss of income, or business partners wanting to protect their business from financial loss.

Proving Insurable Interest

Before a life insurance company will allow you to purchase coverage on another person, they will take steps to verify insurable interest, which will usually include requesting identification from the people involved and conducting a phone interview. During this phone interview, the insurer will ask about the relationship between the beneficiary and the insured, because you can only take policies out on certain people. Relationships that guarantee insurable interest are:

  • Certain essential employees–  You can prove that you have an insurable interest in employees who are considered executives, such as the CEO or president of your company, or your business partners, because if  they were to pass away your business would experience a loss of profits. Purchasing what is known as business life insurance is  common practice.
  • Immediate family members–  It is easy to prove insurable interest in parents, children, siblings, grandparents, and spouses.
  • Debtors–  Creditors can ensure debtors, as long as the debtor consents to the coverage.

Other Relationships

extended family silhouettes with a city background
Normally extended family members cannot claim insurable interest unless they have proof of dependence.

As stated above, insurable interest is easy to prove for immediate family members and people who you have a business relationship with; it is harder to prove an insurable interest in other people and, unless you have proof of financial dependence, you will have a much harder time insuring:

  • Aunts and uncles 
  • Cousins
  • Nieces and nephews
  • Stepchildren and stepparents

Insurable interest protects the insured, as well as the insurance company, from insurance fraud, so when applying for a policy, you will have to prove your relationship to the insured, and that you are at risk of financial loss if the insured passes away.

If you are looking for a life insurance policy, either for yourself or someone that you are financially dependent on, know that there are many different kinds of policies to choose from, like whole life insurance, term life insurance, and final expense insurance. If you’re not sure where to begin looking for a policy, consider using online tools, or speaking with an agent. The right policy for you is out there! We have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Final Expense Life Insurance

Final expenses are not easy to talk about, but it is necessary to do so. Funerals can cost $10,000 or more, and this does not include other end-of-life expenses such as medical, legal or credit card bills. Without final expense insurance, these final expenses will fall on your family’s shoulders and strain their finances. But your family doesn’t need to be left with this financial burden: you can provide them with the cost of your funeral arrangements and more with an affordable final expense life insurance policy. 

Final Expense Life Insurance Explained

white casket being carried by men in black suits.

Final expense life insurance is a type of permanent life insurance that covers the costs of your funeral and burial, as well as any outstanding bills. As long as you pay your premiums, your  policy will never expire. There are two types of final expense life insurance policies to choose from:

  • Guaranteed Issue Life Insurance– You are almost certain to get approved for this type of policy because it provides coverage regardless of health status. These plans are more expensive than other policies, and offer amounts anywhere from $5,000 to $25,000.
  • Simplified Issue Life Insurance- You can get this type of policy if you are considered a moderate risk. You will have to provide answers to a medical questionnaire, but there will be no medical exam required for this policy. You can get coverage up to $50,000.

Check Out These Discount Life Insurance Options Below! Make Sure You Compare More Than One For The Best Rates!

Advantages Of Final Expense Life Insurance

Putting aside $10,000 dollars or more for funeral expenses is hard for many people to do, especially in today’s economy. Buying an affordable final expense life insurance policy will provide your family with this money. These policies offer peace of mind, and they are easy to get and maintain. The advantages of these plans include: :

  • No medical exam– You are not required to undergo a medical exam in order to purchase a final expense life insurance policy, which is beneficial if you have any serious health conditions that would hike up the cost of other life insurance policies.

    approved written on a paper with a person's hand holding a pen about to sign underneath the approved stamp
    The application is easy and coverage starts immediately after you are approved.
  • Quick approvals– The application process is quick and easy, and coverage begins immediately after you are approved, which can be the same day you apply.
  • Lower premiums– Final expense rates can start as low as $20 a month.
  • Payment flexibility– You have the option to pay monthly or annually. 
  • Tax benefits – The cash value of the policy accumulates tax-deferred.

It is not easy to accept the fact that one day you will no longer be with your family, but it is a grim reality. Your family will go through a difficult time, and the last thing they should worry about while grieving is how they will pay for your funeral and end-of-life expenses. You can give them at least financial peace of mind with a final expense insurance policy. There are multiple affordable policies to choose from that you can budget into your monthly expenses, and you do not have to worry about passing a medical exam.

If you are interested in providing your family the financial stability to pay for your funeral arrangements and more, then a final expense life insurance policy is perfect. For low monthly payments now you can make sure your loved ones are taken care of later. Picking a Final Expense Life Insurance policy is an important decision. You want to make sure your family is taken care of when you’re gone without getting tied to a policy that is going to be a financial burden. There are multiple coverage options, some with added benefits. To make the process easier consider using online tools, or speaking with an agent. We have provided the top Final Expense Life Insurance companies in the nation that offer hassle free assistance and the most competitive rates below. Always check multiple sites to make sure you have bargaining power and know the different advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check Final Expense insurance rates today.