Insurance is helpful for most people to invest in as it helps protect one’s belongings, property, or even themselves. Many people invest heavily in insurance so that they can live the rest of their lives without worrying about protecting their precious items or suffering after a loved one’s death. If they don’t have enough money off the bat, they might consider insurance premium financing. For example, someone living in Nairobi would likely go for insurance premium financing Kenya. However, with the popularity of insurance, there are also many instances of insurance fraud.
Insurance is the dishonest financial gain from a wrongful gain from an insurance company. It can cost a lot of money for companies and people that are victims of it. It is a heavily punishable act with hefty fines. Insurance is available out there in many forms as people continue to get creative about it. While you may know about the general malicious act of insurance, there may be some things you may be unaware of. Here are 4 things that you need to be aware of when it comes to insurance fraud.
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1. Companies are not always the victims.
This fact may seem surprising, but yes, it is true. Often, it is not people who end up cheating companies as part of insurance. In some cases, it is the people who end up being victims. In most cases, these are usually senior citizens or the elderly. This happens when scammers pretend to be insurance company reps. They’ll sell unsuspecting victims an insurance policy and wait for them to pay them a premium payment. After that, they’ll run off with the cash. This can cost victims a lot of cash and distress, especially considering many will invest heavily thinking they are securing their future. In this way, policyholders can also become a victim of insurance fraud.
2. Insurance fraud can cost many industries a lot of money.
As you may well know, insurance fraud does affect insurance companies heavily. However, not many people realize that insurance scams can even be cross-industry. In this way, companies who buy insurance policies for their employers may also be affected by this insurance that can cost them a lot of money.
This insurance may cost a lot more than you think. According to the FBI, non-health insurance fraud can cost Americans alone more than $40 billion per year. Other sources further estimate that health this insurance alone can cost $54 billion per year in America. These are staggering statistics with figures that are bigger than most markets alone.
3. People can commit insurance fraud unwillingly.
Yes, that is correct. People can commit insurance fraud without even realizing they’re doing so. This is usually when people think they’re saying harmless white lies. This could be anything from leaving out certain diseases during the application or adding extra items for an insurance theft claim. Such exaggeration and lies may seem relatively harmless, but the truth is, these people are obtaining financial gain by lying, which technically makes it insurance fraud.
To avoid this insurance, ensure you are as honest as possible with your insurer when providing details. In addition, make sure you update your insurer if any changes are made to your profile or if you go through an accident.
4. Life Insurance Fraud is real.
Faking your own or someone else’s death may seem like something from the movies. You may be surprised to know that it occurs in real life. This involves people taking out expensive life insurance policies and faking their or a loved one’s death after a few payments. After they have collected the money, the beneficiaries of this morbid crime will then run away to start a new life as a different person. In many cases, they will end up fleeing to another country. There are many real-life examples of this insurance fraud, such as a mother encouraging her son to get insurance payment after faking her death.
The bottom line
Insurance is quite popular as people prefer to have policies that protect their belongings or themselves. Because of this, insurance fraud is rampant across the industry. Insurance fraud can cost companies and people a lot of money. Many people may be aware of insurance fraud but may not have heard of the 4 interesting facts we may have listed about it in this article. We hope this article has been educational and has helped you understand the depth to which insurance fraud can occur.