In this podcast, I’m going to be discussing five ways to avoid burial life insurance scams. Let’s get started on on number one right here. The first one is do your research on your agent. So all life insurance agents have to be licensed by the state. And you can go to the State Department of Insurance website and look up an agent and make sure that they’re legitimate. In many cases, you can see the insurance companies that are contracted with as well.
So definitely do your research. Now, there’s a lot of agents out there that are brand new, they’re their green horns, you know, and they’re just getting started out of the business in the business. And the reason reason is, is it’s kind of a low barrier of entry to get into the insurance business. And it can be lucrative if you’re good. But also, the fail out fail out rate is like, boy, it’s, it’s over 90%, like, it’s probably only three or four or five 6% agents really kind of stay on in the business over a long period of time.
So if you get a brand new agent, chances are they’re, they’re not going to be there and the number of years to help you with your policy and services, or, you know, just help you add more coverage or answer any questions or anything like that. So researcher agent, you want an agent that’s been in business many, many different years, and multiple years, 510 whatever it would be, but you just want a good track record. And also, you know, if your agent says that they have access to, like 30 different insurance companies,
well, that’s like walking into a car dealer and saying, you know, I could drive any one of these 100 cars? Well, technically you could, but they’re not going to let you you don’t own the cars or anything like that. So a lot of insurance agents will kind of inflate their numbers and say, Well, I’ve got access to 30 Different companies.
Yeah, they may have access, but they they’re not contracted with them, they’re not going to write any business. In many cases, when life insurance agents are new. They you know, their uplines or their bosses, restrict them to maybe one two, or maybe max three companies. So you’re not always going to get the best deal or the best approval and in the final expense space, you may not always get first day coverage.
Now another thing is the difference between a captive agent and and a broker. So a captive agent means they only work for one insurance company. And they can only offer you that insurance, and then make many cases the underwriting is going to be more strict. And in most cases, the policy is going to be much more expensive because they can only sell their one product.
And the thing is, is if you get denied for first coverage, in many cases, they’ll put you into a modified plan of the same plan, which is what got like a two or three year waiting period. And we’ve talked about that in other podcasts, you absolutely want to avoid modified plans, you want first day coverage or benefits. And the other thing on your agent is just, you know, make sure that they do everything right.
That’s going to lead us into our number two topic for today. Watch out for red flags. If your life insurance agent in any way, shape, or form encourages you to be dishonest or to lie on the application. Get away from them right now. thing I want you to understand is life insurance contracts are legal documents. And when you’re putting your signature on there, you’re signing that everything’s true. If not everything is true. The insurance company doesn’t have to honor that contract. Here’s a great example. I had a client This was years ago and help them over the phone. Everything was good qualified for first day coverage, lowest price plan, all that stuff.
And I did my initial underwriting then I even went through and asked the health questions on the risk quest for coverage before we got on the phone with the insurance company. And then we got everything checked out. Okay, we got on the phone with the insurance company got approved for state coverage just like we always do as long as we know everything going on with everybody, we always get first day coverage. Well, this person ended up dying less than 12 months later from cancer.
Well, it turns out the insured had been diagnosed with cancer about two weeks before he talked with me. And at that time, none of his records had updated to the national database that the insurance companies get all their information from. So when they did the prescription medicine, check in the MIB check medical information, Bureau check all that stuff, everything came back clean, because nothing had been updated. So I thought he was good, he lied, right? And he thought he was going to get this insurance, and that the insurance companies wouldn’t check on it.
Well, within two years of getting your policy, if if you die of suspicious circumstances, the insurance companies get a chance to go back and look at that. And one thing that’s really important, is if you commit, if you lied on an insurance application, that’s called fraud, insurance fraud, specifically, if you commit insurance fraud, the insurance company does not have to pay out that policy.
So you know, if your agent ever encourages you to lie or misrepresent anything, just get them out, and additionally report them to the Department of Insurance or something. Because that is unethical it gets. And even even another one kind of this sunlight city, it’s only a little white line, right? You mark, you’re a smoker. And you know, the questions for smoking is typically, have you used any tobacco or nicotine products, chewing vaping, anything like that in the last 12 months?
Well, sometimes, you know, if your agent fills that out as a no, and you actually have and you didn’t catch it, and you sign the the life insurance contract, it’s still not you know, you’ve committed fraud, because you need to double check what the agent put on there, too. That’s why I always recommend when you get your policy from the insurance company, do not just throw it in your file cabinet drawer, pull it out, read it, make sure that everything in that policy is exactly 100%. True, exactly. As your agent told you.
What we do at funeral funds of America, we actually mail out a welcome envelope. And in that we’ve got a document that documents everything that we said about the policy, the first date coverage, all the riders, everything like that, so that you have that in written form. And then when you actually get your policy in the mail, you can compare everything that we’ve included to what’s in the policy, and you’ll find that everything is 100%. Exactly the same. And yeah, just be very careful.
Unfortunately, there’s some unscrupulous salespeople salespeople out in the insurance interesting, and that goes for any industry. But kind of buyer beware, if it sounds too good to be true, it is. And always double check, trust, but verify, especially when it’s is important this stuff here.
Number three, way to avoid burial insurance scam is just beware of the cost. Now, this is maybe not as much scam material, but it’s certainly being aware. Because there’s some companies out there that will sell you more expensive policies than you actually qualify for. Is that a scam? I don’t know. It probably is if they’ve got lower price companies, right? Maybe they just want to make more by inflating that premium. But yeah, so that now typically, the plans with two year waiting periods out they’re not typically they 100% are going to be more expensive than first day coverage.
We did a video series on on YouTube. And we compared age 50 to 85, male and female and then ran in $5,000 increments 5000 10,000 15,000 20,000 25,000. So over three interviews, 310 videos, and we ran one particular company that you see advertised all the time on TV. And we found across the board. They were right around 200% More expensive than our best price first day coverage plan. So their pricing is not a scam. It’s just high pricing. But a lot of people if you bought that policy and they didn’t tell you that you qualified for better insurance or insurance with first day coverage or lower rates, then you might feel like you’ve been finagled a little bit.
So just again, buyer beware. If things sound too good to be true, and you know there’s all these lofty claims and you know, they encourage you to like get right now and buy right now and have these really emotional commercials and everything like that. Beware there They’re typically trying to sell you a sub par policy.
So I’m purposely not naming any companies on this, because I just want to make you aware, and you can kind of use that awareness to make sure that you’re getting the best deal. And then what kind of number five is kind of tying into number four, is just don’t rush into a decision. You know, there’s a lot of companies out there advertising, and they just make everything seem so good. And, you know, a lot of times, when there’s a TV commercial, it’s meant to disrupt your day kind of disrupt your normal, normal day, it’s called disruptive advertising, it gets your attention, you know, puts you in a state of mind where you’re feeling a lot of emotion, because you didn’t figure, you know, you just hadn’t thought about this, you were so busy living that you didn’t think about dying.
And then you call up. And, you know, it’s like, they want it to be an impulse decision. And they want you to make a decision right now over the phone, and you’ve got to do this. If not, you know, your family’s going to just, they’re never going to recover, because you’re probably going to die tomorrow.
I’m kind of having a little fun with that, of course. But yeah, just, you know, if you don’t feel right about something, feel free to shop around. And, you know, that’s something every salesman hates to hear, I want to shop around. And in many cases, it does not benefit you. But in a lot of cases it does. If you go with somebody like funeral funds of America, where we can actually shop a whole bunch of different insurance companies for you, it actually really helps out too, we work with so many different insurance companies, because we specialize in first day coverage, that we can often get you first day coverage,
When other companies would be putting you in with modified or some type of two year waiting period policies. So also on our website on just about every page at funeral funds.com We’ve got these quarters, that you can actually check different pricing from all the insurance companies in your state based off your age, gender, and check that out.
And then you can always just give us a call at our toll free number and add 862-9456 and we can help you understand exactly what you qualify for. But yeah, if you’ve got if you got health or medical issues, and you were ever sold a two year waiting period plan, probably in the last two or three years, you should definitely check with us and see if we can’t save you money, get you more coverage or get more coverage.
NOTE: Show notes are AI transcribed, so there may be some spelling or grammatical errors.