Taking out insurance is a complex process. It involves so many steps that even a person with extensive knowledge of the insurance industry must double-check everything before signing the contract. Getting acquainted with the policy’s terms and conditions — many of which are written in the fine print — is the most challenging factor in this department.
Most insurance providers will refrain from exploiting your inexperience and walk you through every element featured in the policy. However, not everyone is so honest. Numerous life insurance scams prey on those who do not know what practices are regarded as disadvantageous for customers.
That’s why it’s crucial to learn the basics from the experts, especially, how life insurance premium is calculated. However, there are many more things that you should be on the lookout for as well.
Many agents sell add-on products (so-called riders) as a part of the whole life insurance policy. Add-ons are usually additional insurance policies that you can purchase with your life insurance — such as critical illness coverage or accidental death benefit.
When taking out insurance for the first time, the agent could try to sell you additional services that you might not need. It is their way of increasing the commission they receive.
Of course, these add-ons can be quite beneficial if you have them in place. However, they come up less frequently than people think, so you should always ask for a separate price quote. It is not uncommon for dishonest agents to charge you for these add-ons without your consent — and without explaining their benefits.
If you ever notice that your insurance policy has been upgraded to include an add-on, make sure to get a written confirmation from the agent who sold it to you. Before agreeing to anything, ask your agent to explain what you are paying for and why you need it. If they avoid answering your questions or give you vague responses, they are likely trying to scam you.
Making You Believe That Everyone Needs Life Insurance
Some agents might tell you that everyone needs insurance or that, sooner or later, you will surely regret not taking it out when something bad happens. But it’s not that simple. You can lead a happy and fulfilling life without spending a penny on insurance. Statements these agents make are often misleading and do not reflect the reality of the insurance industry.
An experienced insurance agent will never force you into taking out a policy. Instead, they will help you understand what kind of coverage you may need and how much it would cost. The goal is to give you enough information for you to make an informed decision without being pushed into anything.
Still, this doesn’t mean it’s impossible to find a policy that fits your individual needs. Whether you’re a new parent or have a chronic illness, there’s always a special policy designed to meet your needs.
Exorbitant Premiums for Little Coverage
The premium is the amount of money you pay for your life insurance policy every month. It is based on various factors such as your age, health, lifestyle, and family history.
In most cases, the insurance provider will determine your premium by taking into account your age and the amount of coverage you want. The older you are, the more you will have to pay because there is a higher chance of you passing away while the policy is active.
One of the leading life insurance scams is convincing customers that they can save money by paying disproportionately high premiums for a small amount of coverage. Beware of such practices and always check if the premium you pay matches the amount of money your relatives will receive after you pass away.
Contacting You via Email
This is one of the most common scams. Scammers often use emails to present themselves as insurance provider or a representative of the company. They send emails that look like they are sent by a real insurance agent and claim that you need to immediately take out a life insurance policy.
The email will give the impression that you won a jackpot or that your family member has just been diagnosed with an incurable disease. The latter is particularly popular among scammers who steal pictures from Google Images and place them in their emails.
Other times, scammers will offer you lifetime cover and provide you with coverage details. You will be asked to confirm some personal information via email. But they won’t send you any documents confirming your contract or policy.
The problem is that, upon closer inspection, you may discover that the sender’s email address has nothing to do with your insurance provider. It could very well be a fake one created for the sole purpose of tricking you into providing private data.
If something seems suspicious, reach out to your life insurance provider to ensure they sent the email. Or, if you receive a fishy-looking email from a company you have never heard of, you might be better off just deleting it and contacting a reliable insurance provider on your own.
Buying life insurance is a complex process that requires time, effort, and research. If you have no clue where to start, get acquainted with what each company has to offer.
Stay away from frauds that are out there to make a quick buck. Your best bet is to go through a review platform and find out what other customers have to say about the insurance companies you have on your list.
When you have chosen an insurer, make sure you do everything in your power to avoid getting scammed. Read the terms and conditions of your policy carefully, and consider consulting an expert if you are not sure about something.