According to studies, life insurance fraud costs insurers more than $300 billion each year. Unfortunately for insurance policyholders in Florida, a large portion of that cost gets passed onto them through higher premiums. There are three types of life insurance fraud that are more common than any other type.
Filing false life insurance claims
While you may assume that people faking their deaths is the sort of thing that only happens in movies, that’s not the case. There have been countless cases over the years of people faking their own death or filing a false claim by claiming that someone else died. Additionally, anyone who murders a policyholder in an effort to gain access to their life insurance fraud is not only guilty of murder, but also fraud.
Changing someone else’s policy
Making unauthorized changes to someone else’s life insurance policy is a fraudulent act. According to experts within the insurance industry, this form of fraud typically involves impersonating someone in an effort to collect their data and steal their money. In 2017, a Pennsylvania court convicted a funeral director of forging clients’ signatures in order to name his business as a beneficiary on their policies.
Providing misinformation on an application
When applying for a life insurance policy, you will answer questions about your health, hobbies, income and lifestyle. The answers you provide on this application have a direct impact on the amount that you pay for your policy. Lying on this application in an effort to get a lower rate is the most common type of insurance fraud according to industry experts.
The consequences of committing life insurance fraud depend on the severity of each case. Typically, criminal charges only apply to the most extreme instances. Insurers have the legal right to reject your application or increase your premiums if they find out that you lied on your application.