Is life insurance cover a big con or are too many people using this fallacy to cover up a mistake on their own behalf? There are many questions when it comes to life insurance cover and the most common is usually how much a beneficiary will be paid should the policy holder die. It is a simple enough question and one of the most important factors to consider, but the terms and conditions of the policy plus filling out a form accurately is just as vital and are too often overlooked as secondary issues when creating cover while the majority focus solely on the payout clauses.
Why the payout amount is just one thing to consider…
There have been many horror stories over the years where people have faked their own deaths in the hope their partners will receive the benefits from their policy, but many others are filled with stories of cons and rip offs that make many think life insurance cover is a huge mistake.
More often than not the main reason people shout for the heads of the companies offer life insurance cover is because they lied or made an honest mistake when filling out the paperwork for their policy. Terms and conditions are often overlooked in favour of the payout amount and as such, policy holders (or those left behind) end up feeling ripped off when the payments are not quite what they presumed they would be.
Application form inaccuracies are not the same as being conned…
Case 1 – A woman from London attempted to sue her life insurance broker after her husband died from liver failure and his policy was never paid out. Unfortunately his policy was never valid as he had written his date of birth incorrectly and lied about his income levels, which as per the terms and conditions of the policy made it invalid. His wife failed in her bid to sue.
Case 2 – Lying on a form can be just as destructive. In France two years ago a man was diagnosed with lung cancer but with no health insurance the British-born man travelled to London to visit a life insurance broker. The man in question was found to have fraudulently taken out insurance because he lied on the form and said he was in good health after already being diagnosed with lung cancer in France. He later died from his cancer and left his family in debt for his treatment costs.
John Darwin – A canoeing con man
The recent case of John Darwin shows how the tables can be turned. The British man was thought to have died in a canoeing accident, but turned up safe and well five years later claiming not to remember anything. An investigation led to the discovery that Darwin had been staying in the bed-sit next door to his wife and was able to get into her room through a secret hole in the wall facts even their grown children were unaware of. Both are currently serving jail time.
So conning can happen on both sides and as long as the paper work is accurately filled out with honest answers and the terms and conditions are adhered to the beneficiary is unlikely to encounter any problems.