A Columbus Investment Fraud Attorney Discusses Improper Life Insurance Sales
Improper marketing and sales misrepresentations made up the largest category of complaints the Ohio Department of Insurance (ODI) received about life insurance policies during 2013. Those illegal and unethical tactics ran the gamut from misleading clients about premium payments and the date on which a policy would expire, to covering up information about why a claim could be denied and offering fake policies that could never pay benefits. Each false statement, nondisclosure, and act of fraud betrayed one or more people. In addition to costing policyholders money they should not have spent, every improper sale of life insurance denied individuals current peace of mind and future financial security.
While no one likes to admit it, purchasing life insurance represents an investment a person makes in his or her own death. While many policies accrue cash value against which policyholders can take loans while they are still alive, the real purpose of life insurance is to provide a spouse, children, and other dependents and beneficiaries the money they need to live on after the insured person dies. Put another way, life insurance is an income stream replacement designed to replace the income that the insured would have earned if still living. An improperly sold life insurance policy makes counting on the investment difficult or impossible, which can complicate everything from holding a funeral to keeping one’s house.
Any company or agent who improperly or fraudulently sells life insurance must be held accountable for, first, returning policyholders’ money and, second, restricted from taking advantage of other people. The civil litigation attorneys at the Columbus, Ohio, law office of Leist Warner welcome opportunities to make sure those things happen.
Life Insurance Companies and Agents Have High Legal Duties to Clients
Insurers and insurance salespeople must qualify for licenses issued by the Ohio Department of Insurance. Offering policies without a license automatically puts an organization or individual in violation of state laws, as does marketing any plan that does not meet all the requirements spelled out in the state code.
Minimum standards to meet while advertising and selling policies include, but are not limited to, the following:
- Explaining all the terms of a contract so that no client ever agrees to something he or she does not understand;
- Honoring premium prices and payout amounts;
- Notifying a policyholder every time a term or condition of coverage changes, especially premium payments;
- Applying a client’s payments only to policy accounts;
- Allowing clients to request more or less coverage, as reasonable and needed;
- Agreeing to let clients have a policy reviewed by an independent expert before he or she signs, which is particularly important with high-dollar policies and policies with unique provisions;
- Avoiding high-pressure sales tactics, including emphasizing worst case scenarios;
- Never requiring clients to purchase one policy in order to qualify for another;
- Never offering or accepting bribes, kickbacks, or rebates in return for purchase of a policy;
- Keeping accurate and up-to-date records of client interactions and requests; and
- Protecting clients’ personal, financial, and health information.
Failing to engage in proper sales techniques can result in the suspension or revocation of an insurance license. It also makes an organization or salesperson liable to a civil lawsuit.
Do Not Get Taken Advantage of When Buying Life Insurance
Improper sales of life insurance are among the most important cases the Columbus, Ohio, consumer protection lawsuit attorneys at Leist Warner handle. Few products can prove more important to a family’s financial well-being than a life insurance policy that pays promised benefits upon a loved one’s death. Learning that an investment paid into for decades is valueless due to hidden clauses or because it was issued by an unlicensed company can leave survivors struggling to keep a roof over their heads. If you have any reason to believe that an insurance company or agent is currently acting, or did act, improperly, call Leist Warner to speak with a lawyer.
We handle insurance claim denials, false advertising, and consumer fraud cases, and we provide no-cost case evaluations. Our phone number is (614) 222-1000, or you can tell us your story by using this form.