Life-insurance scams

Surviving spouse life-insurance scam

Grieving spouses have much on their minds as they deal with the loss of a husband or wife. The burden can seem overwhelming, and then the phone rings. Recent widows, especially, are called.

The Scam

Price you pay

Fight back


The Scam

A stranger is on the line. Someone claiming to be a life-insurance agent is on the line. Your deceased spouse bought a life policy worth more than $1 million.

Your spouse wanted the policy to be kept a secret. The spouse “loved you very much and wanted to maker sure you’re taken care of.”

There’s just one hitch ... one more premium payment is owed. It’s usually a specific amount such as $4,670.89. The policy has lapsed (or is about to lapse). That one payment must be made — and made now — to save the policy so the insurer can pay out the $1 million. A less-urgent variation: A final premium payment is simply owed (no lapse is mentioned).

Depending on the caller you can wire the money to a specified account (typically overseas). Or send cash or gift cards. Or use a credit card to conveniently make the premium payment right on the phone.

The policy and life insurer are bogus. The scammers monitor obituaries for potential targets. The ruses exploit grieving spouses who may have let their guard down during a time of personal turmoil.


The price you pay

You’ve just been robbed of several thousand dollars. You’re also dealing with the added stress of being so blatantly taken advantage of.


Fight back

Confirm before you pay. Call the supposed insurer’s customer service department to ensure the policy exists. Also ask your own financial advisor or insurance agent to verify the policy.

And ask for verifiable documents such as the policy binder. Do your research even if the documents seem valid. They could be clever forgeries.

Know the red flags. Reputable agents rarely cold-call a surviving spouse they’ve never dealt with. Nor do agents normally ask for direct payment of a premium; the insurer usually deducts the premium from the policy payout. And anyone who pressures you to make fast financial decisions under such duress probably has a dishonest motive.

Watch for other cons. Invoices, calls regarding orders for products or services, investment opportunities and claims for money owed can all be scams looking to part you with your money.

Shady contractors might demand that a widow must pay for a project the husband supposedly signed for. Maybe porch work or repaving the driveway.

The husband’s “signature” on the contract may be blurry, and the contractor may tell the widow that her husband was forgetful about sharing such details in his later years. Call the Better Business Bureau and your lawyer for advice before paying unknown bills.