Male   Female
  • What are the most common types of life insurance fraud?
  • August 1, 2013
  • By Emily Miller

    Life insurance fraud is a crime that costs the industry hundreds of millions of dollars each year. It involves deceiving insurers, family members, or business partners and it translates to higher rates for honest policyholders.

    There are five common types of life insurance fraud:

    Stranger-Owned Life Insurance

    This is when a stranger owns the policy on someone’s life. It is one of the biggest scams out there right now. The insurance is purchased in the intent of eventually transferring ownership to a third party, typically investors.


    This is when an agent offers a “better” but more expensive policy to current policyholder. In reality, there is little to no difference between the two other than the fact that the agent will collect a nice commission.


    Fraud like this involves an agent increasing your net worth, making it appear that you can afford a bigger annuity. As a result, you may have to pay a large surrender fee in order to access your money.

    Fake Death

    A common but rather difficult type of fraud to execute is faking the death of someone who is insured. The person could still be alive or is some cases never even existed. Some people go to extremes measures to execute this, such as staged funeral and forging a death certificate.

    Bait and Switch

    In this scenario, you believe you are getting one type of insurance but soon find out that you are purchasing life insurance. The commission on life insurance is higher than most other types of insurance.

    Before purchasing any type of life insurance, make sure you are going through a reputable company and you understand what you are getting. Investing in life insurance is an excellent way to protect you and your family in the future. If you treat purchasing life insurance like any other major decision, you shouldn’t run into any problems.

  • Category: Life Insurance, Life Insurance; Tony Steuer Columns

One Response

  • jean p dachille says:

    I have a very unfortunate situation, My son has somehow mnaged to change the ownership names and beneficiary on a life insurance policy that my late husband Richard Dachille and I purchased back in 1961. When each of our 3 children were born we purchase a life insurance policy. The first life policy was through prudential for our first child samual r dachille in 1954. the owner of policy Richard Dachille & Jean Dachille and beneficiary was samual r dachille, the next was for our son Richard D Dachille in 1961 same owners and beneficiary was Richard Dachille ( this is the policy that was fraudulently changed (ownership and beneficiary names changed sometime after 2006) my husband passed away in 2006 at that time all three life insurance policies were reviewed by the estate attorney and were correct. I was informed by my estate attorney almost 6 months ago that the life insurance policy with Richard dachille isted as beneficiary was changed to reflect the following…the owner of the policy was changed to my son Richard Dachille and his son Benjamin R Dachille was listed as the beneficiary on the policy. Prudential was notified immediately and reported of the fraudulent change in names. they requested a formal written letter explaining the fraudulent incident. Do you have any advise for me as I move forward with getting this policy changed and reinstated to its initial form. thank you please respond asap

Leave a Reply



Consumer Insurance Guide SM provides a wide selection of originally-authored articles and expert advice targeted to the self-directed insurance shopper. Our mission is to provide consumers with useful, money-saving information on all things having to do with making sound insurance purchase decisions.

Consumer Insurance Guide SM is owned by Life Quotes, Inc. 8205 South Cass Avenue, Darien, IL. For editorial, content feeds, advertising and lead purchase opportunities, contact Robert Bland, Publisher at

Life Quotes, Inc. owns and operates and, two online consumer insurance information services that cater to the needs of self-directed insurance shoppers.

About Us  |   Contact Us  |   Press Releases  |   The Best Privacy Policy  |   Life Insurance  |   Careers
For Agents & Brokers  |   Site Map  |  

Copyright ©1984-2015 Life Quotes, Inc., 8205 South Cass Avenue, Suite 102, Darien, Illinois. Life Quotes, Inc. and certain of its personnel are licensed as insurance agents, brokers or producers in all states. CA agent #0A13858, LA agent #200696, MA agent #333509159. dba Life Quotes Insurance Services in CA under agent #0827712, in LA under agent #205078. dba Life Quotes Insurance Services, Inc. in UT under agent #90093. All rights reserved. Telephone (630) 515-0170. Founded 1984.