Almost everyone knows what insurance fraud is, and most people have heard stories of insurers who’ve refused payouts on mere technicalities. Insurance fraud is a very old concept, with the first known case occurring in 300 BC when a Greek ship owner sunk the vessel in an attempt to collect on insurance. Whether a person is a shareholder or a customer, insurance fraud affects everyone. This article will focus on life insurance fraud and how the work of an Insurance Fraud Investigator in Washington DC, affects the bottom line.
Fraud: It Takes Two
Both buyers and sellers can be guilty of insurance fraud. Sellers commit fraud when they hijack the policy selling process in a way that only benefits them. Buyer fraud happens when buyers manipulate the purchase process to obtain higher coverage. Below is a breakdown of various types of buyer and seller fraud.
Seller Fraud
* The ghost company: In this scenario, policies are sold, and premiums are taken, but the company is illegitimate or doesn’t exist at all. This type of fraud isn’t typically discovered by an Insurance Fraud Investigator in Washington DC until a policyholder files a claim.
* Premium theft: Here, insurance reps take premiums, but they don’t forward them to the underwriting company, forcing the policy’s cancelation. This has become a relatively minor issue as companies have shifted to a direct deposit model, but it is still a possibility.
Buyer Fraud
* Post-dated policies: Here, a policy is arranged after an insured’s death, but is marked as being previously arranged. Agents are usually complicit in this type of fraud, and it is easily detected by insurers.
* Murder for profit: Here, a policy may be legitimate, but financial hardship encourages the suspect to kill the insured in order to inherit the proceeds of the policy.
* Faking disability or death: Many policies have disability riders, which can tempt many to fake disability to gain a payout. However, some take it further and stage their own deaths. In these cases, the perpetrator has to contend with the possibility of being found out.
Life insurance is a business focusing on probability and risk analysis, and every case puts pressure on a business. For these reasons, many companies opt to hire an Insurance Fraud Investigator in Washington DC such as Business Name. While this benefits investors, it can lead to higher premiums for buyers.
