Life Insurance and Fraud

At times when an economy is struggling, the chances of fraud go up.

Fraudulent claims account for a major portion of all claims obtained by insurers, and cost billions of dollars each year.

Insurance crimes also range in severity, from barely exaggerating claims to deliberately causing accidents or damage in order to gain profit.

Fraudulent activities also affect the lives of the innocent, both directly through accidental or purposeful injury or damage, and indirectly as these crimes lead to larger insurance premiums. Insurance fraud results in a very significant problem, and governments and other organizations are making attempts to deter such activities.

Due to the large volume of claims submitted on a daily basis, it would be far too expensive for insurers to have employees check each claim for symptoms of fraud.

Instead, many insurers utilize computers and statistical analysis to identify suspicious claims for further investigation.

If you as a consumer or agent are suspicious of life insurance fraud, there are steps you can take to report it.

Individuals should look at the health and legal standing of a life insurance signatory to see if insurance fraud has occurred. It is important to report occurrences where people sign the name of an elderly, comatose or disabled relative in order to achieve benefits at the time of death.

Another way to zero in on possible fraudulent activities is by assessing the amount of money paid out through a life insurance policy to decide the odds of fraud. The information should include a breakdown of ongoing benefits along with funeral benefits to give an overview of the severity of fraud.

If you suspect fraud, track down the contact information for witnesses to acts of life insurance fraud for the report. It is important to ask witnesses to put aside time with your attorney for an official detailing of the acts they observed.

When passing along potential fraud information to an individual, outline the form of life insurance highlighted in fraudulent activities to assist those investigating whether or not there is fraud taking place.

It is also good to approach a criminal lawyer in the community to assist in completing the report regarding life insurance fraud.

The lawyer should have familiarity with insurance law and the penalty for criminal activities independent of life insurance to the report the proper context.