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Life Insurance Fraud

Fraud constitutes a drain on the profitability of life insurance companies worldwide. The premiums paid by the policyholders are also impacted and subsequently increased because the insurers cannot operate at a loss. With globalization, fraud is no longer prevalent only in domestic claims. These days, multimillion single claims originate from around the world and the fraudulent claimants get smarter every day with ruses to deceive the unwary insurer. Under this link, we will discuss these claims, the case notes, that convey sound lessons for the Claims Examiners, Investigators, as well as the entire spectrum of audiences who read insurance investigation reports.

In the articles, the first country in Capitals denotes the origin of the claim. The second country is the location of the insurer.

Life Insurance Fraud

Article marked FRAUD ALERT is for the close attention of the readers, particularly Claims Examiners and Special Investigators in Special Investigation Unit (SIU) of insurance companies worldwide. This is to alert them to what we have noted is a pattern or trend in recent claims and to be circumspect in countenancing such circumstances should similar claims be presented to their office.

AIDS Condition concealed for USD150,000!

UGANDA / UNITED STATES – In practice, in such cases as death occurring within the contestable period, the insurers usually want to determine if the cause of death had to do with the concealed medical condition. Every Claims Examiner and field Investigator ought to know that the concealment of material information in order to receive coverage is a form of fraud.

Declared ‘wife’ dead for USD40,000!

NIGERIA / UNITED STATES – At this juncture, it was apparent to us that the policyholder never existed. This was a policy taken online and the policyholders need not present themselves physically to the underwriters. The underwriters relied on the applicants’ uberrimae fide, the utmost good faith, to present the truth about themselves and not misrepresent the facts.

Scanty Documentation for USD500,000!

THE GAMBIA / UNITED STATES – The second red flag was the lack of supporting documentary proofs. There was no medical certificate! If the insured died at the teaching hospital in The Gambia, the management would have issued the relations the Medical Certificate of Cause of Death. This is the form of medical certificate issued by physicians in The Gambia, being an English-speaking country.

Laid in state for US$60,000 and US$300,000!

NIGERIA / CANADA – We informed the insurer that Christians in Nigeria respect the dead. They don’t lay them in state in casual clothes. They don’t lay them on bare mattress. They dress the mattress, and they dress the corpse. The family dresses the corpse in formal clothes. The room is decorated. What you see in the picture (left) was a poor attempt, a caricature to…

Wasted trip!

SIERRA LEONE / UNITED STATES – We opted to commence the inquiries with the immediate neighbors. Under pretext that we were seeking to locate the insured’s house along the street, we asked the neighbors to direct us to the house number where a middle-aged lady died recently. The interviewees readily pointed to the actual house that bore the number but denied knowledge that any of the residents died recently or within the year.

Body substitution, Case 3
Insurance Attorneys beware!

UGANDA / UNITED STATES – Here, we will continue the discussion of the series, body substitution. By now, we know these cases are claims in which the policyholder did not die or never even existed when the life insurance policy or accidental death policy was taken. However, a corpse is brought forward and documented as the policyholder at the time of filing the claim. Simply because there is a corpse and there are supporting documents that bear the policyholder’s name, it is often a challenge to the insurers and even the field investigators to prove the fraud.

Body substitution, Case 2
Pilgrimage to cash US$9.8 million!

INDIA / UNITED STATES – Insurers are often at a huge disadvantage in countries where corpses are cremated. The culture and tradition may require that corpses be cremated within hours and forbid that they be preserved until the insurers are through with the claims. The challenge is, therefore, ever present for global insurers to fashion a mean to resolving such a situation otherwise they would continuously be taken for a ride.

Body substitution, Case 1
Fire for US$5 million!

GHANA / UNITED STATES – Mr. Osei said that the fire spread so quickly that by the time he reached there, the house was completely engulfed in flames. He raised alarm and ran to call the other villagers who arrived there but could only look on as the farmhouse was reduced to rubbles. When they were able to search the debris that night, they saw human remains there. Although the body was burnt beyond recognition, they concluded that it was Mr. Koffi’s corpse. It was wailing throughout the night and none of the adults in the village slept, the neighbor narrated to us.

Fraudulent Accidental Death Claims (1) / Cuba

CUBA / UNITED STATES – The Diaspora residents in the United States, Canada and Europe often invite their parents and relations to visit them. They do so for three primary reasons. The first may be for them to know how they are faring in their adopted country. The second is because these relations may have one or more medical conditions and need attention. They believe they have better chances of securing a cure in the advanced healthcare system of North America or Europe. The third reason, often not trumpeted and almost muted, is that…