People often worry that there is a life insurance policy taken out on them without their consent. This is concerning to people because they think a policy may be taken out with nefarious intent such as murder in order to collect an insurance payout. It is not surprising that with big money involved in life insurance policies, there has been plenty of fraud over the years. Life insurance companies have also gotten very good at detecting fraud, and it is very difficult for a fraudster to find success against a life insurance company. If you are still worried that someone may take out a life insurance policy on your life without your permission, here is how you can find out.
To Take out a Policy, You Need to Sign a Consent Form
You need to sign an application of consent in order to have a life insurance policy taken out on you. If you did not sign an application, there is no way somebody has legally taken out a life insurance policy on you, unless it is fraudulent. As they process the application, life insurance companies have underwriting departments that perform additional identity checks. On the application for the insured, a home address and phone number must be listed. The underwriting department will usually call the phone number to make sure that it is accurate, and cross-reference the address with public databases. An address that does not match public records will draw red flags. A mailer will usually go out indicating a policy was issued in your name to the address listed. Between a phone call and correspondence in the mail, an insured person usually will get plenty of notice that a policy is being taken out on them. This, of course, is not foolproof.
Medical Exams are Often Needed Too
Instances of fraudulent life insurance policies are extremely rare because most life insurance policies also require medical examinations before issuing a policy. Usually, a medical exam is triggered by the policy being a certain minimum size, so smaller policies such as those under $250,000 may not require an exam. Even underwriting for a smaller policy will probably require medical records to be released to the underwriter. This requires a signature on a form, and your doctor may also alert you to the fact that there is a request pending to get a copy of your records.
Insurable Interest Must Exist
In addition, insurance companies also like to make sure that the person buying the life insurance policy has an insurable interest in the insured person. An insurable interest means that someone has a financial interest in the life of another person. Examples of “insurable interest” are a wife who relies on her husband’s income or an employer who relies on work from his/her employee. The majority of life insurance policies are taken out by family members. Someone is always assumed to have an insurable interest in their own life. So, unless there is an insurable interest, a life insurance company will not issue a policy. This prevents a random person from attempting to take a life insurance policy out on your life.
How to Track Down an Existing Policy on Your Life Using MIB
With that being said, if you still believe there is a chance that somebody has a life insurance policy on you, you can run a search with the Medical Information Bureau (MIB) for $75.
Other Ways to Learn About Existing Policies
If you don’t remember if a life insurance policy was taken out in your name, there are some other ways that you may be able to find out! Here are some good ones:
- Look through financial records. Life insurance companies issue a lot of paperwork. Odds are if you keep old paperwork filed away, some information about a life insurance policy will be in there.
- Ask your family members. Family members may remember a policy or enough details about a policy to help you track it down. Even if they only know which life insurance company issued the policy, you can call the customer service department and get more information about a policy on your life.
- Call the State Commissioner’s Office for your State. They may refer you to the MIB or they may help you track down the policy, usually free of charge. Be warned though, like most government agencies they have limited resources and will move on their own schedule. This will probably be a slow way to get information about your policy.
- Ask a Family Member’s Financial Advisor. If someone in your family worked closely with a particular financial advisor or accountant, they may remember information about a policy on your life or the life of a loved one. Even if they do not, they may be able to assist in locating a policy.
- Use Policy Inspector. Policy inspector is a service that will attempt to search for existing policies. This does have a cost associated with it, but it may be worth it to find out if there really is a policy insuring your life.
What to do if you Find Out a Policy Exists on your Life, and you Don’t Want it to
Affect learning that a life insurance policy exists on your life, you may decide that you don’t want someone to have a financial interest in your death. This is a natural reaction for many people. Unfortunately, if the policy was issued legally your options may be limited.
If a policy was issued in a legal way, and you consented to the policy at the time of the application, you can not revoke the policy as the insured person. Only the owner has the right to cancel or surrender a life insurance policy. Neither the insured nor the beneficiaries have many rights regarding policy changes.
If you believe that the policy may have been issued fraudulently or without your permission, you can get a policy on your life canceled. You should contact the authorities if this is the case. Contact your State Insurance Bureau or State Insurance Commissioner’s Office. They will open an investigation and possibly pursue legal action. If you also contact the life insurance company that issued the policy, and they may investigate their records and policy cancel the policy immediately. If you have reason to believe that your life is in jeopardy because of the life insurance on your life, contact police authorities immediately.
What if you Took out a Life Insurance Policy on Someone Else and they Don’t Want It?
If you own a policy on someone else’s life, you can make the choice to surrender the policy or not. Even if the insured person no longer wants you to own the policy, they can not force you to cancel, surrender, sell, or otherwise dispense of your ownership unless the court orders the policy changed through bankruptcy or divorce proceedings. If you own a policy on someone else illegally, surrender the policy immediately.