Sounds a Bit Funny to Me.

A man goes to see a fortune teller.

She begins with: "your name is Steve",  - "wrong".

"Your favorite color is green",  - "wrong".

"You have a dead uncle who passed away 2 years ago",  - "wrong".

"Your wife's name is Carol", - "wrong".
"You have 2 children named John and Christian", -  "wrong".

Getting flustered the fortune teller asks "What in hell do you do then?"  "I investigate fraud".

It's no laughing matter that some people will try anything once and try it a second time if they can get by with the first time. Insurance companies have entire departments dedicated to finding fraudulent claims. Did you ever see "Double Indemnity"?

Most people who try to run a scam on their insurance company get caught. After all, this is a multi-billion dollar industry whose entire business model depends on weeding out the truth from the liars. That doesn’t mean people don’t try though.

Here are several types of insurance fraud to be aware of. And please, don't try this at home!

Application Fraud

Application fraud happens when you knowingly and intentionally provide false information on an insurance application. It is generally the most common form of insurance fraud, being responsible for up to two-thirds of all denied life insurance claims. 

If you later realize you provided incorrect information after an application was submitted. You can and should contact the insurance company to make the correction. The insurer will appreciate your honesty.

Faked Death Fraud

This is another form of false claim fraud, but a highly specific one.It is surprisingly common for individuals to try to defraud life insurance companies by faking their own deaths. 

Often in this scheme their beneficiary will collect the money and share it with the claimant. At least, that’s the idea. The reality is that it’s a lot harder to get away with faking your own death than most people seem to think.

And for those curious, it doesn’t work if you actually kill the person either. If someone’s life insurance beneficiary kills them, the murderer loses all rights to the money.

Inflation Fraud

Inflation fraud is the doctor charging your health plan for a couple of tests he didn’t really run or which you didn’t need. It’s the slip-and-fall claimant who says that they can’t move their arm… then goes out for a game of tennis the next day.

Forgery and Identity Theft Fraud

This has become too common but you can protect yourself. People sometimes try and file claims under someone else’s insurance. This is particularly common with health insurance. Individuals will get another person’s identifying information and then try to make claims against their insurance.

Illegitimate Denial Fraud

Arguably the second most common form of insurance fraud is committed by insurance companies themselves. According to the legal website NOLO: “Also known as ‘bad faith insurance practices,’ fraudulent activities on the part of insurers include actions such as denying valid insurance claims, denying coverage to individuals for certain conditions that should be covered, failing to properly investigate claims, and deliberately underpaying claims.” 

You can have confidence when working with a licensed independent life and health agent who works with only the most reputable companies. When you start with trust, you should never have an issue with your life and health coverage.