There are many types of Insurance in the market, just for example life insurance, vehicle insurance, property insurance and health insurance. People often want to secure everything for future and for that they buy insurance policies. Do you know how Insurance Agents do fraud with your savings or policies? Here are top 5 ways where you can be cheated by agents.
Insurance Agents take Lapping Approach:
Agents steal premiums and cover them up by crediting a fake customer account with the premium of another customer.
Skimming Ways: Agents just steal premiums before the payments are credited to the account of customers maintained by the insurer.
Making fictitious policies: They just create these through the investing their own money as premiums. Agents use money from insurance companies’ incentive programs and bonuses to cover the “investments.” After receiving this money, they let the fictitious policies lapse smartly. Let me tell you that the crooked agents can also sell policies to customers and then neglect to file the policies with the carriers.
Usually, most customers do not want to file claims on their policies, especially early in the terms. Why, because they fear that their premiums will rise. Therefore, the agents keep all documentation on the policies instead of turning it over to the carriers. The agents are able to skim the customer’s payments because the carriers don’t know the policies exist. (You can confirm the ACFE 2014 Fraud Examiners Manual, 1.306.)
Forgery System: Insurance Agents forge policyholders’ signatures to steal premiums and cash values of insurance policies too. This is a very easy way to make customers fool.
Churning Policies: Company agents persuade their customers to terminate their existing policies and buy new ones so they can earn extra commissions. Often, they do not tell the customers that they will lose their money by switching to new policies.