4 Warning Signs of a Life Insurance Scam
Written by
Heather Taylor
Edited by
Chris Cluff
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The internet has made it easier than ever to shop for and buy life insurance, but this added convenience requires a bit of caution. Criminals are out there committing life insurance fraud, and if you’re not careful you could become one of their next victims.
There are several red flags you should be aware of when researching life insurance, and certainly before agreeing to buy coverage. Here are the four main warning signs of a life insurance scam.
You’re Being Contacted by an Agent or Company You’ve Never Heard Of
If you find yourself contacted by an agent or company you have never heard of before — or if you’re unsure of their legitimacy — proceed with extreme caution. They might be trying to push you into making a purchase right now or sharing your personal or financial information because they are fraudsters.
When it comes to life insurance, if an agent reaches out and you don’t know them, Progressive recommends contacting the company they work for and their state’s department of insurance. You can verify the agent’s identity and licensing. You can also look into the company’s existence and find out if it’s allowed to sell life insurance in your area.
Unrealistic Rates
If you’re being quoted extremely low rates that sound too good to be true, chances are this is probably the case.
According to the NAIC, a warning sign that an insurance company is illegitimate is that the premiums it is offering are more than 15% to 20% lower than comparable coverage from other legitimate companies.
Unsolicited Emails or Texts
Did you receive an email, or text message, from a life insurance company asking for personal information like your Social Security number or bank account information? Does this email claim you’re an “unexpected” beneficiary?
Do not reply or click on any links you may see in the email. If you’re already working with a legitimate life insurance company or have an insurer, you can call them at their valid phone number and verify.
The Agent Wants the Premium Paid Directly to Them
Another major red flag indicating a life insurance scam is an agent who wants you to pay the premium directly to them. They may also ask for wire transfers or cash.
Never pay an agent directly for your premium. The only place you should make this payment to is a legitimate life insurance company.
If You Are Uneasy, Remember This: Stop. Call. Confirm.
Those who feel overwhelmed or apprehensive about a life insurance policy are encouraged by the NAIC to “Stop. Call. Confirm.” before buying it. Here’s a breakdown:
- Stop. Take the time to verify the company is legitimate and the agent is licensed.
- Call. Speak to the state department of insurance to ensure the company is authorized and in existence.
- Confirm. Make sure to confirm these details along with getting coverage information in writing before buying a life insurance policy.
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