Insurance Fraud


DEFINITION of 'Insurance Fraud'

An illegal act on the part of either the buyer or seller of an insurance contract. Insurance fraud from the issuer (seller) includes selling policies from non-existent companies, failing to submit premiums and churning policies to create more commissions. Buyer fraud includes exaggerated claims, falsified medical history, post-dated policies, viatical fraud, faked death or kidnapping, murder and much more.

BREAKING DOWN 'Insurance Fraud'

Insurance fraud is basically an attempt to exploit an insurance contract. Insurance is meant to protect against risks. It isn't meant to be a tool to enrich the insured. Although insurance fraud by the policy issuer still occurs, the majority of cases have to do with the policyholder attempting to receive more money by exaggerating a claim. More sensational instances such as faking one's own death or killing someone for the insurance money are comparatively rare.

  1. Substandard Insurance

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  2. Mortgage Fraud

    Intentionally falsifying information on a mortgage loan application. ...
  3. Corporate Fraud

    Activities undertaken by an individual or company that are done ...
  4. Securities Fraud

    A type of serious white-collar crime in which a person or company, ...
  5. Life Insurance

    A protection against the loss of income that would result if ...
  6. Churning

    Excessive trading by a broker in a client's account largely to ...
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