Don’t Be Scammed: Beware of Life Insurance Fraud and Ghost Agents

Fake insurance coverage is one of the different types of life insurance fraud you should watch out for as a potential policyholder. There are fraudsters out there that pose as legitimate insurers or insurance agents. Usually, they defraud people by taking money for premiums on non-existent health plans. These scammers may sell policies at rates that are considerably lower than standard market prices, but they have no intention of paying your claim.

The Dangers of Health Insurance Fraud

Having a bogus health insurance plan can give you a false sense of security, and it may jeopardize your family’s welfare and financial health. Worse still, you may not even recognize that you have a fake policy until you file a claim. Then, to your chagrin, the legitimate insurance company informs you that you no longer have a valid policy with them.

Are you looking to purchase life insurance or a health plan? Here are different ways to recognize potential insurance fraud:

Learn How Fake or Ghost Insurance Agents Operate

An insurance scammer may initially get you a genuine policy in your name and take your premium payments. Shortly afterward, they’ll cancel the policy without your knowledge. From then on, they’ll be keeping your premiums without letting you know that your coverage is no longer in effect. You’ll typically discover that your policy was canceled after you’ve filed a claim with your insurer.

Most ghost agents or brokers don’t operate a bona fide business website. Instead, they advertise insurance products on social media sites or messaging applications. Also, their policies are much cheaper than their competitors’, according to the National Association of Insurance Commissioners (NAIC). Typically, any premium rates that seem too good to be true should be a red flag.

An insurance agent is likely to be a scammer if they show any of the following telltale signs:

  • Advertising cheap insurance policies on Facebook, Twitter, or messaging apps
  • The agent is impossible to reach by phone. Instead of listing a phone number, scammers communicate with clients only via social media or email.
  • Scammers usually accept cash-only payments in person. Also, they might accept payments via non-standard platforms, such as social media or mobile money transfer apps.
  • Insurance fraudsters insist on setting up your coverage without facilitating any direct communication between you and your preferred carrier. You may also find it difficult to get information or documents directly from a legitimate insurance company.

How to Avoid Purchasing a Bogus Health or Life Insurance Policy

Be sure to conduct a thorough background check and ask the agent a lot of questions to avoid being an insurance fraud victim. You may take these steps to clear any lingering doubts about the legitimacy of a broker or insurance policy:

  • Verify with your state’s insurance department: Call to confirm that the agent in question is licensed to sell insurance policies where you live.
  • Confirm before signing your insurance contract: Don’t commit to any deal or send any payments before verifying the legitimacy of your prospective agent.
  • Avoid “cash-only” agents: As a general rule of thumb, be wary of any broker that doesn’t want to leave a money trail behind after selling you an insurance policy. Always call to confirm the license status of an agent that only accepts cash payments.

It’s in your best interests to beware of health insurance scams when you’re looking to purchase policies for yourself and your family. To avoid being scammed, talk to the verifiable and state-licensed insurance agency in Fresno, McCarty Insurance, today. We’ll provide you with legitimate health or life insurance plan based on your unique needs.

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