Life insurance scams

Discussion in Life & Health Insurance started by foodietr • Jun 5, 2014.

  1. foodietr

    foodietrNew Member

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    A lot of companies in India scam their customers by not settling the full bill and hence making the customers pay for a portion of the expenditure citing reasons like room rent, luxury services which just includes basic amenities like sanitation. Don't you have the same in USA?
     
  2. lindbergh

    lindberghWell-Known Member

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    In my place, I've heard of some insurance companies that went bankrupt thus not being able to pay its members. However, if a company goes bankrupt and cannot pay, it doesn't mean that it's a scam. Entering into a life insurance policy is a risk unto its own. You're not sure what you would get. Plans right now are not fixed. It depends upon the performance of the fund that you invest. When you enter into a life insurance plan, be sure to research the company thoroughly first. Are they well known? Are they international? Are they affiliated with banks? Are others availing of their plans too? Have they paid people already?
     
  3. Kek

    KekActive Member

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    I've never heard of a life insurance scam like the one you explained here in Europe, Slovenia. My mother is an insurance agent, so she would definitely tell me if she encountered a potential scam. She works for a big firm and they are definitely legit. I mean, as much as an insurance company can be legit, that is.
     
  4. vij

    vijNew Member

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    Not just that. They use the condition 'diabetes' to wriggle out of most situations. I have documented this at

    Please Log In to view this link!

    - please comment on it. I hope people know that the same can happen to them or their loved ones. Be very careful and read the fine print before signing up.
     
  5. ReDGuNNeR

    ReDGuNNeRMember

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    Insurance should be very regulated butI guess that's why you go with a reputable name, no matter where you are. Always do your research on the company and the agent offering you their services. It's your life! and life insurance!
     
  6. GemmaRowlands

    GemmaRowlandsActive Member

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    I have heard of a lot of insurance scams, but a lot of them are very clever, in that they include certain terms in the small print using the assumption that the person who is signing up will not have the time or the inclination to read through all of it. Usually they are correct in this assumption, and people then sign up to policies that don't cover them for certain things, which they don't find out about until it's way too late. Then, people will have wasted a lot of money that they could have enjoyed during the course of their lives, when they shouldn't have signed up to the policy in the first place. So the thing that I would say to all of you is that you should always read what you're signing up for, because you will definitely regret it if you don't.
     
  7. pafjlh

    pafjlhActive Member

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    Well, I did have life insurance once who didn't seem to know I was a member. I had the policy and I was paying the monthly premium to it. But when I went to cancel it out when I got a better plan through my job they couldn't find me. Serously, they couldn't even find the account number. I finally just stopped making the montly payments to them and the policy was terminated. Apparently somewhere in the organiaztion I was acknowledged, yeah the one that took my money. Anyway, I walked away from that situation grateful to still be alive because I would of hated my family to be given the run around from them the way that I was.
     
  8. lindbergh

    lindberghWell-Known Member

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    People should treat life insurances like any other investments. It is not the same as depositing your money in a bank. If you enter into some sort of investment, there is always a possibility that you are going to lose money. If you set up a business and you go bankrupt, would you call yourself a scam? We should take a look at the definition of a scam first before we go about announcing that this or that insurance company is a scam.
     
  9. Happyflowerlady

    HappyflowerladyWell-Known Member

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    I am not sure how this OP even relates to a life insurance policy. Normally, we buy life insurance to pay our family money if we die, so it can help with final expenses, and often, for ongoing expenses until the family can get re-established.
    They just pay the lump sum of the insurance amount; so expenditures (as mentioned) would not even be an issue with a life insurance policy.
    Insurance companies have to be rated; so it is easy to check their rating before purchasing a policy form any insurance company.
     
  10. xTinx

    xTinxWell-Known Member

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    Shouldn't those insurance companies be reported to the authorities or sued? They are abusing basic human rights yet still get away with it. Clients are equally responsible. They should not buy insurance without checking the provider's background. Before making any final purchase decision, a background check may be in order. They could look through insurance forums or ask for feedback from previous customers.
     
  11. luckycharm

    luckycharmActive Member

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    Yes, that is a real pain and we will experience it only when we approach them with a claim. They have a number of hidden terms and conditions which are not disclosed at the time of taking membership. But it mostly happens with health insurance schemes. They have a long list of diseases which are not covered and they never tell you this while joining the scheme. You need to specifically ask for details. In most of the mediclaim insurance policies you need minimum 24 hours hospitalization to get your money back. If it is less than 24 hours and you are not admitted in the hospital you are not going to get any benefit.

    Now there is stiff completion in insurance field and companies are ready to do anything to get customers. But the real issue comes up when there is a claim and in most of the cases by that time the sales person who actually done the process of enrolling the customer might have left the organization.
     
  12. Binu

    BinuActive Member

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    In my home country Nepal, if you buy life insurance products from reliable insurance companies, there will be no hidden charges. If you bought an insurance products worth $1000 you will get that amount along with bonus when your product matures. There are no cheatings here.
     
  13. Ray1

    Ray1Well-Known Member

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    I am an Indian but I have yet to experience the kind of scams the OP has explained in his opening post but I have come across certain other experiences. In one case the agents of a reputed company spread an alluring scheme systematically which was too good to be true. They were caught and the scheme failed miserably.
     
  14. Alexandoy

    AlexandoyWell-Known Member

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    I have a life insurance policy but I have not heard of issues especially scams. The pproblematic insurance here is the pre need plans where you insure the educational expenses of a child. You pay the premiums regularly and when it is time to collect, the insurance company closes down. There are many cases of such scam so people have learned not to trust much those insurance companies.
     
  15. AlexZ

    AlexZMember

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    Life insurance is a highly regulated industry. It's much easier for a scammer to try somewhere else.
    As with India, there are incontestability laws in each American state. They may vary, but are generally for two or three years. The insurance company has a duty to find any fraud within that period or live with the consequences.
    If someone dies and the insurance company is not notified, they generally do not pay until they are notified, but some interest is normally paid from date of death to payment. A few years ago, some regulators got upset that the insurance companies were checking with the Social Security Death Master File to see whether their annuity holders had died, but then didn't check to see if their life policy holders had died. This has been changed in most jurisdictions.