Getting term insurance for self employed insurance is one of the most important things you can take to protect your loved ones in the event of an unfortunate tragedy. The COVID-19 epidemic has shown us the unpredictability of life and the significance of providing financial security to our loved ones in the event of unanticipated events such as death through life insurance. Due to the pandemic, many transactions have moved online. This has also resulted in an upsurge in incidences of online insurance fraud, in which fraudsters impersonate insurance agents and defraud individuals with fraudulent offers and promises. Insurance fraud is a serious felony and it can occur at any stage of the transaction.
When you are planning to buy term insurance, take a few precautions to avoid the following frauds. However, before we get into these processes, let’s go over some red signs to look out for when obtaining term insurance for self employed.
Types of Life Insurance Fraud
- Fake websites: A few of the most typical insurance frauds are carried out through bogus websites. Watch out for social media adverts and websites with misspelled URLs, especially if they ask you to join up with your credit or debit cards. To attract consumers, the majority of these websites guarantee no health checks, minimum documentation, and simple KYC and hence, advised not to buy term insurance from these fake websites,
- Fake emails: Another popular strategy used by scammers to commit insurance fraud is to send bogus emails. You may receive an email from a life insurance company identifying some issues with your insurance policies. It may also inform you that your policy has lapsed due to missed premiums. It is advised to ignore such communications, as they are frequently sent by scammers. If you believe an email is real, contact your insurance company to confirm.
- Beneficiary Scams: This is another scam wherein the insurance company deceives you by saying that you are the beneficiary of a distant relative or even a complete stranger. You must then pay a processing charge to get the claim amount. It is always a good idea to report such frauds because they are designed to mislead innocent individuals.
How to Avoid Life Insurance Fraud?
Now, let’s go through each step and understand all of the precautions you should take when you are ready to buy term insurance to avoid becoming a victim of insurance fraud.
Step 1: Verify the Identity of Your Insurance Agents: According to the IRDA’s stringent standards for insurance corporations, all agents working on behalf of insurance companies must undergo extensive training and provide proof of identification. If a representative approaches you, you should first ask for their ID, record their information, and then call the insurer’s customer service number to confirm their identity. This is a preventative measure to protect you from becoming a victim of insurance fraud when you are buying term insurance for yourself.
Step 2: Avoid paying in cash: No insurance professional will ever ask for cash from you. When you buy term insurance, ensure that the cheque is issued to the proper account by calling the customer service department and confirming the information to be included on the cheque. This will keep you from unintentionally writing a cheque to an agent who will deposit the funds under a similar-sounding name and fall victim to one of the various potential insurance frauds. Even if an agent represents a private firm, the information on the cheque should be from the insurance company, not the private firm.
Step 3: Keep Policy Details Confidential: Giving out information about your policy documents to an unknown third party has been shown to increase the risk of insurance fraud. A scammer may pose as an insurance representative and ask for details about your coverage. They may even pose as consumer rights representatives or claim to be contacted by an insurance company’s support department. You should be on high alert if they contact you and ask if you have any questions about your insurance policies.
Step 4: Report Loss Policy Documents Immediately: Scammers may gain access to your policy documents and file a claim on your behalf. This is why, if required, you should put your insurance documents in a bank locker and make copies of them. If you misplace or lose your documents, notify an insurance fraud investigator immediately. Typically, you would have to file an FIR, place an advertisement in the media, and present an indemnity bond on stamp paper to the insurance provider.
Step 5: Careful When Using Public Networks: Cases of insurance fraud committed online are increasing. Scammers may use public Wi-Fi networks to steal your personal information. Be cautious when transacting on these networks or accessing personal information; sign out of any public computers after use, and use encrypted connections when making online payments.
As the demand for insurance and especially for term insurance for self employed after COVID as a lot of people started their own business, so does the unfortunate possibility of falling victim to insurance fraud. Fraudsters are constantly looking for new and creative ways to benefit from your insurance plan, which is why you must remain attentive and follow these best practices.
