Insurance Fraud And Insurance Scam Essay

Insurance Fraud And Insurance Scam Essay

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Insurance fraud is when someone provides false information to an insurance company in order to gain something that they may not have gained if they told the truth about said subject (What Is Insurance Fraud). An example of insurance fraud would be if an owner of a vehicle decided to burn down their car and claim it was stolen to receive money from the insurance company. Insurance fraud is one of the most common types of frauds seen nowadays. Most people have heard of this type of fraud and may even have stories of it. There are many types of insurance frauds that occur around the United States. The majority of insurance frauds come in the form of life-insurance frauds.
Life insurance fraud can occur in many different forms. For example, it could be when an individual fakes his or her own death in order to gain the amount equal to their life insurance policy (Sheridan, Terry). Sometimes the individual may even be a made up person. Many insurance companies also provide a substantial amount in their life insurance policies if someone is disabled so some people decide to fake a disability. Although this may sound a bit exaggerated it actually occurs frequently nowadays. This is the most common type of scenario when dealing with life insurance fraud. Life insurance fraud usually will involve more than one person. This is because one person usually will receive the payout from the individual’s death. It is difficult for someone to fake their own death and alone be able to receive the life insurance policy. One red flag that should rise to insurance companies in these cases are if the individual’s life insurance coverage increases by a substantial amount prior to their disappearance.
Insurance agents often commit involved life insuran...

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Although insurance fraud is raising it should be known that any type of fraud no matter how big or small is unacceptable. One frequent type of insurance fraud that occurs in the US today is life insurance fraud. Life insurance fraud can occur in many different forms such as a person faking their own death in order to gain a large amount of money off their insurance policy. Life insurance fraud is often schemed up and performed by more than one individual. According to statistics life insurance frauds do not occur as frequently as others but when they do they tend to be a significant amount of money. To prevent life insurance fraud companies are beginning to use data clearinghouses to authenticate the identity of the applicants. In conclusion, life insurance fraud is a significant problem in the world and we must continue to take steps to prevent it from happening.

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