“Ten Things Life Insurance Agents Won’t Say”: Thing #8

8.  “Someone could fake your death and collect on your benefits” is next in my series of responses to “10 Things Life Insurance Agents Won’t Say” by Daniel Goldstein “Personal Finance Reporter” for MarketWatch.

Goldstein quotes Henry Bagdasarian (Pres. Identity Management Institute) that life insurance fraud costs the industry about $70 bil. per year.  It’s closer to $100 bil. these days.  But that includes people directly ripping off insurance companies with fake claims and money laundering schemes.  I could find no reliable statistics on the dollar amount of stolen death benefits.  I suspect it is a very small portion of the total.

Assuming someone could fake your death and collect your benefits right out from under your nose, how can you prevent that from happening?  On his website Bagdasarian has built an exhausting list of cautions and steps.  Goldstein has a few.  But they both miss the most important gate keeper between your life insurance policies and fraudsters:  your agent.

An experienced, local independent agent is your best advocate.  Have doubts about a phone call or correspondence?  Call your agent.  Do you really believe that you or some columnist is going to be more versed in the industry than your agent, who has dealt with thousands of real people in real situations?  You agent will periodically review your situation, usually with you present.  If the company gets a death claim (or any change request for that matter) your agent will be notified.  And he or she will check with you, don’t you think?

So, I guess Goldstein is correct with Thing #8.  Even though it’s remotely possible, I’ve never said, “Someone could fake your death and collect on your benefits”.

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