By Kerri Cooke
Life insurance policies are seen by some as a way to make some quick cash. And there are various ways people have committed life insurance fraud. Disclaimer: Don’t try them. They won’t work. You’ll end up with egg on your face.
Faking A Death
Faking a death to receive a life insurance benefit takes a bit of imagination. While the people who try this scheme often have tall tales in abundance, they often tend to be low on intelligence. I’ll give you an example.
Molly and Clayton Daniels figured they would fake the latter’s death. Molly Daniels claimed that her husband died in a car accident. Clayton Daniels dug up a body from a cemetery. He then dressed the deceased in his clothes, stuck them in a car and set the car on fire.
The couple must not have known how detailed car accident investigations can be because the police noticed that there were no skid marks on the highway, and that the fire started in the front seat of the car, not under the hood. A DNA test of the remains revealed that the victim was a female. Police later found forged documents and Clayton, who had dyed his hair black, and was calling himself Jake Gregg.
It’s a very complicated process in the modern world to fake a death and create a new identity. Don’t underestimate the difficulty or the chances that you will pull a “go to jail” card from fate’s stack of cards.
Murder
There are those who go a step further than faking a death and decide to actually murder someone. If the thought has entered your mind, I highly urge you to reconsider. Not only is murder a horrible thing, but the chances of getting away with murder in the age of DNA technology and wide-spread tech use is low. If you manage to get away with pre-mediated murder undetected, you still might find out that fine print in the life insurance policy allows for the insurance company to deny a payout, depending on the circumstances.
Or you could end up with a situation similar to those who took out an insurance policy on homeless drunk Mike Malloy in the 1930s.
Nobody would miss Mike Malloy because he was homeless, right? One problem solved.
Malloy was a frequent patron of Marino’s bar. Marino and four friends created “The Murder Trust,” an agreement that they would take out insurance policies on Malloy and then kill him. Malloy, however, was like a cat with nine lives, or 20.
The men first decided to try to kill Malloy with alcohol poisoning with an open bar tab. When that didn’t work, Marino put antifreeze in Malloy’s drinks. That didn’t work. Marino then tried turpentine, horse liniment and rat poison. Malloy just kept waking up. Continuing their escapades, the men fed Mallow oysters soaked in wood alcohol and a putrid sardine sandwich complete with tin shavings. Still Mallow didn’t die.
The group then tried to run over Malloy with a cab. Malloy dodged twice before getting run over twice. He showed up at Marino’s a few weeks later bandaged and with a limp.
The gang even threw Malloy into the cold snow one night, only to have him show up at the bar in the morning thinking he passed out.
Finally, The Murder Trust achieved their purpose after an estimated 10 to 20 tries when they attached a hose from Malloy’s mouth to a gas light.
All the members of the gang were later executed via the electric chair.
Don’t try this. You will go to jail. You will be convicted of murder. You will die in prison.
Lying On Your Application
There are other less extreme measures in which a person can commit life insurance fraud.
Lying on a life insurance application is the most common type of fraud and can land a person in hot water. The lie can be as simple as claiming that you don’t smoke when you do. You might not think of this as a big deal. It’s similar to what many of us do at the doctor’s office. But you need to be completely honest on your life insurance application, because if it is determined that you intentionally misled the insurance company, they can deny benefits or deny your application. You may not be able to purchase another life insurance policy there or at another agency because all life insurance applications are tracked in a database at the Medical Information Bureau.
Another important thing to keep in mind is not to fudge if the person you want to take out the policy on is gravely ill. Don’t pass them off as healthy only for them to die a few months later.
You will not pass go and collect your $100,000.
Suicide
If you think you’re going to help your family by taking yourself out and allowing them to access your life insurance policy, think again.
Not only will you cause your family pain, your family will mostly likely never see any payment from the policy. This loophole was fixed long ago when suicide clauses were added to life insurance policies.
Forgery
That signature you fake when you are using a loved one’s credit card — don’t do it on a life insurance policy. The policy holder is the only one who came make changes to the policy.
Want to make yourself the beneficiary of an insurance policy to become an heiress? Let me make it clear. No matter how hard you try, most likely your forged signature will not match the original signature. You’ll be found out, labeled a failed fortune hunter and that man who was after your fortune won’t want to marry you anymore.
Soliciting Policy Upgrades
Fraud can also be perpetrated by insurance agents, as well. If an agent tries to sell you an expensive policy you don’t need or can’t afford, that is considered fraud.
Also, if you are offered a more expensive policy that doesn’t seem to add any additional benefits, it is likely the insurance agent is pocketing the extra money you are paying.
Make sure you never pay via a wire transfer or to a specific agent. Always direct your payment toward the life insurance agency. Don’t be the victim of an Ebenezer Scrooge.
Fake Policies
There is a real danger of being sold a fake policy. If you are notified that your life insurance policy has suddenly been canceled and that you should pay premiums to your life insurance agent for a new policy, the agent is trying to commit fraud.
A particular danger for elderly adults is falling for a phone or internet scam. Be sure and watch over and instruct your older relatives on what to watch out for. To make sure a life insurance agent is legit, you can get the agent’s license number and enter it into the state database.
In the end, don’t try to be the villain in an Agatha Christie mystery novel. That’s likely not your strong suit. But don’t become the victim either.
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