Life Insurance Fraud
Ha. These are the schemes that make great movies and great television show plots. Here are some of those we've seen.
1. Crooks will take out an insurance policy on themselves and then fake their own death. How does that happen? Most of them travel to another country and then support their death claim with fraudulent documents. Very few are successful because insurance companies routinely investigate all foreign death claims.
2. A somewhat recent case involved a man who wanted to disappear from the radar screen because he didn't want to go to jail. It seemed so much easier to die, at least on paper, so he and his wife went to a pauper's cemetery and dug up a recently buried body. They put the body into the husband's car, drenched the whole thing in gasoline, then pushed it over a cliff. The car and body was burned beyond recognition, and the widow said, "oh my, it was my dear husband because he never came home last night and that was our car ..." She promptly buried the charred remains of her husband and filed a life insurance claim. Relatives got suspicious when she quickly found a new boyfriend who looking strikingly similar to her dead husband. The Police launched an investigation and the scam was discovered. Both are currently serving well-deserved jail sentences.
3. Too often people really do die. Wives kill (or hire it out) husbands and husbands kill wives. Children kill parents and parents kill children. All for the proceeds of an insurance policy.
Dead or Alive?
Shortly after 911, insurance companies began receiving claims. Adjusters were trying to expedite payments to families that had lost loved ones. In one case, a claims representative drove to the deceased's house, hoping to assure the grieving widow that a check would be forthcoming. Imagine his surprise when the deceased answered the door.
Following any disaster, opportunists attempt frauds. People who are alive and insured see an opportunity to report themselves dead. The World Trade Center, the Tsunami or Katrina. Any excuse works for them.
Do YOU appreciate having to pay higher premiums to fund these people?
Viatical Fraud
Perhaps one of the most deadly of all, viatical fraud is shocking enough to be the subject of a Hollywood action movie. Because it's not been publicized, few people have any idea of what it is.
What is a viatical policy?
Think of it as a reverse home mortgage.
Let's say that Joe has a $500,000 life insurance policy. He is diagnosed with an inoperable brain tumor and given six months to live. If Joe wants to have a six month party, cruise around the world, or even seek alternative medical treatment in some far off country, he needs money. His life insurance policy is money.
Joe can sell his policy to a viatical company. They will give him a certain amount of cash, right now, and he will (in turn) make them the beneficiary. The amount of cash he is given depends upon how long he will live ... and the company can get their "return on investment."
The viatical marketplace got very big at the time that AIDS was killing so many people. Those who were dying of AIDS were selling their policies, enjoying the money, and then dying "on schedule." Business was booming.
But then extensive research gave way to many new drug cocktails, and AIDS patients were suddenly NOT dying. Companies (or individuals) who had purchased their life insurance policies as a financial investment were not getting their expected returns. Instead, they were out considerable sums of money, and had no relief in sight unless the owner of the life insurance policy dropped dead.
Where was the fraud? Murder. In too many cases, the alive and well victims were hastened to the grave via gunshot, car accident, fire or worse. Since they had not died "on schedule," they were helped along by a hired gun. Once dead, the viatical company could collect on the life insurance policy and the investors could get paid. Dirty business. Scary business.
Murder For Money
It's not unusual to see a story like the one that recently occurred in California. What was unusual, however, was the ages of the perpetrators and the uniqueness of their scam.
Two women, ages 75 and 73, found a way to supplement their social security retirement income. Murder.
Here's what they did:
First they'd find a homeless person. They'd befriend him and help him get on his feet. They'd buy him some new clothes, get him an apartment ... and INSURE HIM with themselves named as the beneficiaries. Then they'd run him over with a car and file the claim.
Both are in jail right now awaiting trial. Both are facing the death penalty for premeditated murder. Two men are dead as a result of their plot.
http://www.fightfraudamerica.com
