Despite its damaging consequences, life or funeral insurance fraud remains a relatively low-key subject in society. However, this type of fraud has the potential to ruin people’s lives and negatively impact the viability of insurance providers.
Lee Bromfield, CEO of FNB Life says identity theft is the predominant cause of life or funeral insurance fraud – where criminals steal the identities of unsuspecting individuals to defraud life or funeral insurance providers, disguised as policyholders or beneficiaries.
“This can ruin innocent lives because identities used to commit fraud are flagged with industry bodies and law enforcement. Importantly, clearing your name as a victim will not only cost you time and money – it could cost you job opportunities and derail your future plans. This is why is it important to be vigilant when it comes to protecting personal information.”
Bromfield says paying attention to the following suggestions could go a long way to helping people to stay vigilant and not fall victim to life or funeral insurance fraudsters:
Keep personal information safe
Fraudsters exploit mistakes and negligence. Always keep personal information safely stored. This also applies when you are in public spaces such as shopping malls and other crowded areas.
Never lose sight of your ID or Driver’s License
In some cases, you may be asked to produce your ID or Driver’s License as some form of verification. Regardless of the circumstances, try not to lose sight of such items because you never know people’s intentions.
Pay attention to random communication or phone calls
People tend to ignore or dismiss random calls about life or funeral policies they are said to have taken – Do not make that mistake. If someone is calling you about a policy you are not aware of, follow up with the provider to ensure your identity has not been stolen.
Accepting cash in exchange for your identity
No matter how desperate you are for money, never accept any offer which includes compromising your identity. A reputable lender will not ask you to do such a thing as it is illegal.
Only take life or funeral insurance from a reputable provider
Ensure that you take up insurance with a licensed insurance provider. You could lose a lot of money should you mistakenly take up life or funeral insurance with a bogus provider.
Report life or funeral insurance fraud
Make it a personal your responsibility to alert law enforcement authorities about potential fraud to prevent being the next victim.
“Like most systematic crimes, insurance fraud evolves, but a lot of it can be stopped by following basic safety principles such as denying fraudsters access to personal information. As an insurance administrator, we encourage clients to guard against negligence which could be exploited to advance illegal activities,” says Bromfield.