With R608 billion worth of policies having been paid out by insurers, it is not uncommon for important processes such as these to be taken over by scammers who want to get access to these funds.
Furthermore, it is possible that you could be scammed into taking out a policy with a company that doesn't even exist. Here are some red flags to keep an eye out for when it comes to knowing if you are being scammed into taking out a policy.
Fake companies
The insurance industry is brimming with “new kids on the block” that promise to change the game and make life insurance less mechanic and more human. As much as this is true for some new companies, you are bound to find a few fake ones in the mix. When dealing with a sales agent over the phone things can get trickier. However, to know if the company is real it is vital to check that they are a registered Financial Service Provider (FSP). If not, it is best to hit the road running before they hit the road running with your hard-earned cash.
Being asked to repeat valuable information a company should already have
Receiving a call from an insurer you have a policy with or a company that claims to already have a policy with you but requires you to repeat valuable information such as your I.D, password, banking information is a red flag. Being asked to send copies of these or making a payment even after you have a policy could be a scam. An insurer will never ask you to disclose valuable information over the phone. Always be careful of verification links that are sent to your device for you to access if you have not been informed by your insurer beforehand that they will be sending you one.
You are not led through an underwriting process
Another red flag to keep an eye out for is a rushed process. All legitimate insurance and financial companies will take you through an underwriting process, which is an analysis by an underwriter, to check the level of risk you pose. It is also to assess how much coverage you will need to adequately cover you. Furthermore, customers are protected by a consumer act called Treating Customers Fairly (TCF) that holds financial companies accountable for selling you a product that is not suitable for you. However, being rushed through a process that you do not understand just to talk about payment arrangements is a sign that you are being scammed.
