John McTighe SCAM Life Insurance
I've been wanting to write about this for a while, and it is about the subject of SCAM LIFE INSURANCE sales tactics.
Most anything can be considered a "scam" of some kind in business you simply add a unethical or shady person to ANY kind of business and presto, you have yourself a scam.
In the case of life insurance, there are a number of state and federal laws in place to protect consumers which is nice...BUT, this has little effect in reducing or eliminating scam artists since some of the most vulnerable people are the victims and usually have no idea they have been "scammed" until it is too late.
Here are some top life insurance scams to look out for...
Scam #1 Bogus Company /or Horrible Ratings
A common scam in the old days (and possibly happening today), was a door-to-door salesman that sold someone a life insurance policy from a bogus company, collecting premium money upfront, and never to be heard of again.
One other thing to watch out for is a recommendation to a HORRIBLE life insurance company. One with a low consumer rating or very bad claim payouts. You can check objective company ratings on Weiss Ratings.
How to avoid this scam: Check out the life insurance company as mentioned, and make sure it is real. Do some research about the plans being offered, to make sure it is legitimate, has value and the company has a reputation for paying out on it's life insurance claims.
Scam #2 Personal Information Theft
Getting personal information is part of the life insurance application process, and this information is valuable to the right scam artist. Along with this is the scam of simply going into a person's home and stealing items during the appointment.
How to avoid this scam: The way to reduce or avoid these scams is to check the National Producer Number of the salesman or broker you are working with, before they call or visit your house. Also ask for references and check Google Reviews.
These are your BIG traditional scams, but let me shed light on scams that happen EVERY DAY that might not be as obvious, yet just about as unethical.
Scam #3 "This is a state regulated final expense program..."
The purpose here is to get you to believe that you have some kind of entitlement with the government that will help pay for your final expenses (using life insurance).
That is not the case. This deceptive call or letter in a plain envelope seems like it could be from a government agency, but it is not, it's from a life insurance salesman. Although not necessarily illegal, the practice is highly unethical in my opinion and as much of a scam as any.
Simply, it's a deception.
And if that is on the first call, watch out for the appointment and presentation!!
How to avoid this scam: If you hear a telemarketer say the phrase above, or one similar to it, hang up!
Scam #4 Information Drop Off Scam
This involves a supposed "information courier" just stopping by to drop off information you requested. Again, it's a ploy to get to your house and sell you a life insurance policy.
Some companies use this as actual field training!!! I do not understand the reasoning behind this, or who came up with it, but to me why be deceptive?
If someone is interested, great, let them know exactly who you are and what your do. If they are not, there are plenty of other people to talk to that need life insurance help.
How to avoid this scam: If you requested information on life insurance, be aware someone may want to either visit you in person or by phone, in order to get an accurate quote put together. If you don't want an "information courier" coming over to visit, request a phone appointment and realize they are going to put a quote together for you and the appointment is about life insurance. If you are not interested in such a thing, DON'T REQUEST INFORMATION ON LIFE INSURANCE.
Scam #5 Overselling
This is a way for a salesman to increase the benefits of the policy by promising more than the policy can deliver. It can also mean selling you a policy with premiums you simply cannot afford, and you were pressured into the sale.
Perhaps every salesman has done this in one way or another. In my example, I am an insurance broker, I work in your best interest to provide the best rate and benefits, and am not beholden to any single company. I would rather not sell you a policy than oversell you a policy that you cancel 45 days later because you can't afford it.
How to avoid this scam: Work with a professional broker such as myself that represents YOUR best interests and looks at you as a friend and client, not just another sale for the books.
Another option to mention is a fee based financial professional, however some of them have little experience with the companies and carriers involved in the actual life insurance coverage.
These are just a couple of scams in the life insurance business. There are many MORE and I might touch on those in a future post. Until then have a great week!
PLEASE PASS THIS ON TO SOMEONE WHO MIGHT BENEFIT FROM THIS INFORMATION.