Crooked insurance agents are a dime a dozen and due to this fact, it’s imperative that any insurance policy buyer is fully educated in the most common insurance scams.
It’s always good to keep in mind that these tricksters have been up to these schemes for years, have cheated hundreds out of their hard-earned dollars, and will absolutely make you their next victim if you don’t safeguard your own interests.
Here are three popular insurance scams commonly employed by crooked insurance agents, with details on how you can avoid becoming a victim.
SWITCHING
In order to successfully make a larger commission off of your insurance policy purchase, a crooked agent will go through all of the motions with you in what seems to be a completely legitimate fashion.
The rub comes when the agent files the paperwork as a completely different policy then the one you hand-picked to suit your needs. Instead of an affordable term policy, you’re suddenly saddled with a more expensive whole policy. These policies are considered permanent due to the high cost of cancellation—a figure that could devastate your finances.
Avoid Becoming a Victim
- Always read your contract! Just because you’ve gone every step of the way in preparing your policy with this agent, doesn’t mean that they won’t slip in a switch at the last minute
- If you do find something off in your contract, you should contact the insurance company immediately without going through the agent
TWISTING
In this case, a crooked insurance agent will “twist” your worth, or inflate it, promising that your annuities purchased will render larger payouts eventually. Through this inflation, they’re able to substantiate a bigger annuity for you—gaining a much bigger commission in the process—but when you later try to collect the payout, you find out that you haven’t been making payments large enough to receive it.
In most cases, individuals will make payments for years thinking that they’re making a sound investment that they’ll one day be able to live off of. Unfortunately, since they haven’t been paying enough—and weren’t aware of it—they’re required to pay a very large lump sum just to receive the payout, completely negating it at the same time.
Meanwhile, the agent has long since taken the money and ran.
Avoid Becoming a Victim
- Always be aware of your own net worth
- If you’re not privy to this information, seek out a financial legal expert’s opinion and make certain that their estimate of your worth matches the agent’s
CHURNING
Usually reserved for elderly clients of crooked insurance agents, Churning occurs when an agent advises an annuity holder to replace it with one that will allegedly produce a more immediate cash value.
These annuities replaced are usually long-standing ones that are almost fully matured, and replacing it for a brand new one starts the process over again. Of course, these agents don’t fill the holders in on this fact. They take their commission on the new annuity purchase and while the holder might see a small amount of cash, they will not see the full amount until after the annuity matures 10 to 15 years down the line.
Avoid Becoming a Victim
- Educate yourself on all of the stipulations of your current annuity holding and know exactly how much time you have left on its maturity
- Before signing for any new annuity, get confirmation on how much time it needs to mature
Always receive a second opinion from a financial legal professional before signing into any new contracts that could jeopardize your retirement plans
The best way to avoid becoming a victim at the hands of an unscrupulous insurance company is to only deal with reliable providers. That means only concerning yourself with big names, like the Australian life insurance provider Suncorp. They are one of Australias most trusted insurance providers & offer a range of solutions to suit everyone. Find out more at suncorp’s website today & discover a package that best suits you.