Unfortunately for seniors, life insurance scams are all over the news. Some of the more sensationalized schemes range from reports of people harming loved ones for their life insurance payouts to others faking their deaths for their own paydays. These ridiculous plots rarely happen and almost never work. Real life insurance scams are much more subtle – and more devious.
Most life insurance scams target unsuspecting seniors or grieving family members, aiming to steal their hard-earned money. Thankfully, seniors and their loved ones have several resources to protect themselves from these scams.
You can best protect yourself from life insurance scams by working only with reputable, trustworthy insurers and brokerages. As a leading life insurance brokerage, Final Expense Benefits is here to help you avoid life insurance scams and secure quality coverage for great prices.
To safely secure scam-free senior life insurance, call us at (866) 786-0725 Monday through Friday, 9 a.m. to 5 p.m. ET. And to see how much coverage you may need and how much it could cost, check our free online funeral cost calculator and personalized quoting tool.
Key takeaways
Many life insurance scams target unsuspecting seniors.
Most scams involve fake life insurance agents trying to get your personal information through false applications, beneficiary payouts, and more.
Resources like the Coalition Against Insurance Fraud and state-based Insurance Fraud Bureaus help victims of life insurance fraud report and combat fraud.
Protect yourself from life insurance scams by carefully checking all applications and contact information and by working with reputable, licensed agents only.
How Do Life Insurance Scams Work?
Though some customers commit fraud, most life insurance scammers rely on capturing personal information from people interested in applying for life insurance coverage.
Life insurance companies combat fraud, and this can cost life insurance customers and their families up to $700 per year in increased premium rates.
Life insurance scams can be tricky, but don’t let them discourage you from securing quality coverage. Most life insurance providers, agencies, and brokerages aren’t scams.
Working with a reputable source, like Final Expense Benefits, can protect you from fraud. Whole life insurance and burial insurance can provide vital life insurance coverage for your end-of-life expenses, like funerals, cremation, and burial plot costs. Connect with a reliable brokerage to secure quality coverage you can trust.
Most Common Life Insurance Scams
Here are some of the most common life insurance and final expense scams, how they work, and how to avoid them:
1
Premium & Coverage Fraud
Premium and coverage fraud scams involve a phony agent contacting someone seeking life insurance with a fake application. These scammers will ask a series of questions, similar to common life insurance applications, and may even spoof an entire application process with a fake policy.
Once the applicant falls for these tricks and sends in a payment, the “agent” will pocket that money instead of issuing a legitimate policy. You can avoid falling for these simple scams by verifying the agent’s legitimacy, carefully reviewing the paper copy of your policy before sending payments, and ensuring it came from a real insurer.
2
Identity Theft
When completing a life insurance application, you may be contacted by your new life insurance provider to confirm personal information. Before providing anything, confirm you are speaking to the real provider and ask them to verify your policy’s number and information.
Identity thieves may pretend that they represent your new insurer and ask for private information like your social security number, credit card info, and more. Always ask for agent validation to protect yourself from life insurance identity theft scams. Final Expense Benefits verified life insurance representatives can help you avoid issues by handling the entire application process for you.
3
Forgery
Shady life insurance agencies may use your signature to change your new policy without your consent. A common forgery scam tactic is adding unwanted insurance riders at extra cost to meet sales quotas.
Just like most life insurance scams, you can avoid forgery scams by applying with care. Ensure you work only with reputable brokerages with reputable agents and thoroughly review your policy before completing your application.
4
Fake Insurance Agents & Websites
Fake insurance agents may create websites that appear to be legitimate and represent an agency, but are looking for unsuspecting applicants to share personal information. They then steal that information.
Verify the legitimacy of the agency you wish to work with by searching reviews and researching what providers they work with. For example, Final Expense Benefits has over 100 positive TrustPilot ratings. Plus, we partner with over 20 of the top senior life insurance providers, such as Americo, American Amicable, Aetna Accendo, and Mutual of Omaha.
If you can’t find any reviews or information about an agency, proceed with caution. If it’s impossible to tell which insurers they partner with, it may be a scam. No insurer will work with a scam site. Agencies should be proud to share their partner providers, rather than hiding them.
5
Beneficiaries Scam
You and your beneficiaries should remain on the lookout for scams, even once your life insurance policy is in place. Scammers may pretend to contact you or beneficiaries from a legitimate source and ask for sensitive information, like account access. They prey upon grieving families, claiming they’re entitled to death benefits from a phony policy.
Scammers may tell beneficiaries that to receive the death benefit for this fake policy, they’d need to pay outstanding premiums or provide bank account information. Protect yourself from these scams by verifying the payout is coming from a legitimate policy, and never paying a “premium deficit”. No legitimate life insurance provider will ever ask beneficiaries to pay to receive their entitled benefit payout.
6
Insurance Churning & Twisting
Shady agents may try to make an extra payday at your expense with life insurance churning or twisting schemes. These agents prioritize their commission sales over finding the best policy for you.
Unlike other scams, life insurance churning and twisting occur when you have an existing life insurance policy. Here are examples of each:
- Churning:
Life insurance churning happens when an agent convinces you to switch from an existing policy with level rates (rates that are set at policy start and remain the same throughout the policy’s lifetime) to a different plan. This plan may have higher rates or lower coverage. This would secure the agent commission for another sale, but you could be left with worse coverage that costs more. - Twisting:
Life insurance twisting involves an agent contacting an existing policyholder to switch them to a different insurer’s plan with pricier coverage. These schemes often replace a standard policy with one with modified coverage. This new policy’s value may be the same, but it’ll have higher rates, with the shady agent pocketing the commission bonus.
These schemes only occur when you already have a policy in place. If you already have a great policy in place, you won’t have to worry about making any later changes.
That’s why you should only work with agencies with ethical agents who won’t pressure you into making an unnecessary purchase. Final Expense Benefits only works with highly trained agents who are paid a base salary, so you can rest assured that you are getting unbiased assistance.
7
“State Regulated Life Insurance” Scams
Unethical life insurance sellers may use “state-regulated” life insurance mailers, a deceptive type of marketing designed to sell policies. These mailers are used to generate sales leads for shady agencies, with messages like “state-regulated burial program” or “Florida final expense benefit”.
If you respond to these misleading mailers, you’ll be providing these unethical agencies with your address, name, and phone number. You’ll likely then be greeted with unannounced in-person sales visits or constant phone calls.
Though these mailers claim that they’re affiliated with your state’s government or are free, they’re not. These agencies often sell real policies with real insurers, but not with a government discount. All policies are “state-regulated”, in that they must comply with each state’s laws.
“State regulated” life insurance mailers aren’t necessarily scams, as they are selling real policies, but do you really want to work with an agency that misrepresents their policies like this? Final Expense Benefits doesn’t use underhanded marketing tactics like this, as we hold all our agents to high ethical standards.
8
Health Assessment Scam
Most burial insurance applications require applicants to answer a series of health questions. These questions determine your overall health status and pre-existing medical conditions.
When you’re finished with the application, this questionnaire is submitted to the insurer’s underwriting department to determine your eligibility. Many burial insurance policies with no waiting periods require that you have overall good health.
Health assessment scams occur when a shady agent purposefully ignores your answers to a health questionnaire and answers medical questions inaccurately. This can occur in-person, over the phone, or electronically, as the agent is the only one who marks questionnaire responses.
If the agent answers your questions in a way that doesn’t properly reflect your health status, you will likely be assigned higher rates than the agent quoted. The insurer’s underwriting department will contact you and inform you that your real rates will be higher, and ask you if you’d like to proceed. You may not even qualify for the low-cost level policy you meant to apply for, and may only be eligible for a costly modified or guaranteed plan.
The insurer didn’t know that your agent was being dishonest, and is simply responding to your application. Meanwhile, should you proceed with the pricier policy, the shady agent gets a bigger sales commission. This is yet another reason why it’s crucial to work with an agency that you can trust, like Final Expense Benefits.
T2 Final Expense Insurance Scam
T2 free final expense scams are similar to “state-regulated life insurance” mailers. These mailers look like official, government letters, but they’re not. Instead, T2 mailers are schemes for shady life insurance agencies to harvest your information and consent to annoy you with constant letters and sales calls.
Unlike agencies that would use misleading tactics like these, Final Expense Benefits is proud to work with over 20 of the market’s top life insurance providers. We’re here to help you get a quality policy at any budget, without endless harassment or shady mailer schemes. We rely on our agent’s knowledge and partner with quality insurers to make sales, not deceitful marketing strategies.
What To Do if You Are a Victim of a Life Insurance Scam
Victims of life insurance scams have several options to protect themselves. Those who purchased fraudulent policies from fake agents or companies should report it to their state’s Insurance Fraud Bureau.
Those looking for assistance in reporting fraud or filing claims should use The Coalition Against Insurance Fraud, which is a great resource for those looking for reporting or claim filing assistance. They can provide you with each state’s agency and assist in filing a claim.
If you’re a victim of life insurance fraud, you may need to file a police report. You should record as much information as possible: phone numbers, email addresses, and websites scammers use to steal your information. Authorities have a better chance of capturing the scammers equipped with more information.
If you bought insurance from a licensed agent and suspect you’re a victim of policy churning or twisting, you can likely cancel your policy with no penalty, as long as you are within the cancellation period. All policies have a period during which you can get a full refund, and many states require it to be at least two weeks long. Each policy’s cancellation period is different, so check your policy details.
How to Protect Yourself From Life Insurance Scams
Final expense insurance should provide you and your family peace of mind, not fear of being scammed. Unfortunately, scammers often target seniors and caregivers with misleading or fraudulent offers disguised as legitimate life insurance. Thankfully, you can protect yourself with a little knowledge and awareness.
Here’s how to stay safe, informed, and in control when shopping, applying, and purchasing senior life insurance, and how to protect yourself from final expense scams:
1
Fill Out Applications Carefully
You can best protect yourself from scams by staying aware and carefully reviewing and filling out your application. They’re lengthy documents and typically ask for your pre-existing health concerns, credit score, Social Security number, and more. Carefully review all questions, answer honestly, and take your time.
Rushing through your application could lead to inaccuracies. Depending on the insurer, minor mistakes may be overlooked, but some errors could lead to application denial or benefit payout issues. Carefully review your application once you’re done. A quick review could save you from serious issues in the future.
If you need help navigating complicated, lengthy burial insurance applications, Final Expense Benefits is here to help. Call us today to start your application or to learn more about your options.
2
Stay Informed
Another great way to protect yourself is by staying informed on how scammers operate. Life insurance scammers are always looking for new ways to steal your hard-earned money.
Here’s what you should remember about life insurance scams:
- A legitimate insurer will never ask for your Social Security number or credit card information directly on their website, only on applications.
- Verify your agent’s identity by requesting their life insurance license number or National Producer Number (NPN). If your agent refuses to provide this information, they’re likely untrustworthy.
- Sales agents will never inform you of any missed payments; only your insurer. If you’re contacted by a sales agent about a missed payment and they attempt to correct it over the phone, they’re likely a scammer trying to steal your information. Contact your insurer directly if you suspect you missed a payment.
- If you’re the beneficiary of a policy and the policyholder has died, claim your benefit by directly contacting the insurance provider. Legitimate insurers aren’t likely to contact you without notice that a payout is coming your way, but scammers are.
- Insurance companies never require beneficiaries to make premium payments to receive benefit payouts. This is a common scam tactic, though.
3
Review Your Policy
Once you’re done with your application and you’re ready to start your policy, request a paper copy of the policy and review it thoroughly. Scammers and shady agents rely on applicants not checking their paperwork, and may not even be offering you a real policy. If you’re going to spend money on life insurance, make sure you’re getting the policy you paid for.
Reputable and legitimate agents are happy to answer any questions, while scammers will likely try to avoid providing details or paperwork. The more time you spend reviewing your policy, the better you’ll be able to protect yourself.
Final Expense Benefits is here to help you secure quality coverage you can trust. Call us today or check our free online quoting tool to find trustworthy, affordable senior life insurance coverage.
4
Work with Reputable & Licensed Insurance Agents
Work only with trustworthy agencies and life insurance companies. Like any good senior life insurance agency or provider, Final Expense Benefits holds agents to a strict code of ethics to ensure you’re treated fairly and respectfully.
We’re committed to protecting you and your loved ones from life insurance scams and are proud to offer our partners’ great life insurance products. We pledge to provide outstanding customer service and help connect you to great quality coverage, no matter the budget.
5
Know Your Rights: The FTC Funeral Rule
If you’re ever confused about funeral service prices, the FTC Funeral Rule entitles you to a full itemized price list. It also requires funeral homes to provide alternative individual services, rather than just pricey funeral service bundles. The FTC Funeral Rule helps prevent upselling and misleading pricing during a vulnerable time.
Final Thoughts
You can thwart most life insurance scams by taking the time to verify information, research scam trends, review your policy, and ensure you’re working with a reputable, reliable brokerage like Final Expense Benefits.
Working with a quality brokerage like us helps you avoid life insurance scams and can connect you to reliable coverage from some of the top life insurance providers, including:
To learn more about your life insurance options or to start your application today, call Final Expense Benefits at (866) 786-0725 Monday through Friday, 9 a.m. to 5 p.m. ET. To see how much coverage you need and how much it could cost, check our free online funeral cost calculator and quoting tool.
FAQ
How do life insurance scams work?
Life insurance scammers usually try to steal personal information, like Social Security numbers or credit card information. Unethical agents that may be working for legitimate brokerages may attempt to sell overpriced coverage that you don’t need for big commission paydays.
How can I avoid life insurance scams?
The best ways to avoid life insurance scams include reviewing your policy documents thoroughly, staying up-to-date on scam methods, and partnering with trustworthy life insurance companies and brokerages, like Final Expense Benefits.
Will the government pay for my funeral expenses?
Though some misleading marketing mailers may claim they’ll cover your funeral costs, the government won’t pay for all your funeral expenses. Some costs for veterans’ funerals may be covered, but otherwise, all the government may cover is a limited $255 Social Security funeral payout.
Are senior final expense benefits mailings legit?
Most mailers labeled things like “senior final expense benefits” or “senior final expense benefits” imply that many final expense programs are government-subsidized, which is false. Mailers like these are usually marketing material to gather phone numbers and addresses for shady life insurance agencies to make sales calls or in-person visits.
What is final expense insurance?
Also called burial insurance, final expense insurance is a low-cost type of whole life insurance designed to offer seniors accessible, affordable coverage. Average benefit payouts range from around $5,000 to $50,000 and are typically used to cover costs for funerals, cremations, burial plots, and other end-of-life expenses.
How much does a funeral cost?
In 2025, average funeral costs in the U.S. are around $10,000, which is why most sample burial insurance quotes are for $10,000 policies. Check our free funeral cost calculator to see how much coverage you need.