Possible fraud on policy?

[Bobby22]

What is the name of your state (only U.S. law)? NJ

A friend had got sick in 2005, then moved in with his mother shortly after that. His brother(insurance agent) suggested he get a policy. My friend said he had no reason to get insurance since he doesn't have wife or kids.....Mother passes away a few months ago, the brother and his wife move in......Mail comes to the house with friends name and his brother. It is a insurance policy cancellation notice(friend being the insured)......It appears his brother/mother had taken a policy out on him without him knowing. What are his options if he even has any?

 

[Betty]

What is the name of your state (only U.S. law)? NJ

A friend had got sick in 2005, then moved in with his mother shortly after that. His brother(insurance agent) suggested he get a policy. My friend said he had no reason to get insurance since he doesn't have wife or kids.....Mother passes away a few months ago, the brother and his wife move in......Mail comes to the house with friends name and his brother. It is a insurance policy cancellation notice(friend being the insured)......It appears his brother/mother had taken a policy out on him without him knowing. What are his options if he even has any?

You can't take out a life ins. policy on an adult without their consent - without them signing the application. I don't know who was owner of the policy - mother/brother & I don't know type of policy such as term/whole life. Even if the policy is now cancelled, there could be a cash value due the owner depending on the type of policy. The owner should not get this cash value if there was fraud in taking out the contract. It seems from your post, fraud was involved - policy taken out without insured's knowledge & consent. The friend should start by notifying the ins. co. that he never knew of such a policy or consented to it.

 

[Banned_Princess]

You can't take out a life ins. policy on an adult without their consent - without them signing the application. I don't know who was owner of the policy - mother/brother & I don't know type of policy such as term/whole life. Even if the policy is now cancelled, there could be a cash value due the owner depending on the type of policy. The owner should not get this cash value if there was fraud in taking out the contract. It seems from your post, fraud was involved - policy taken out without insured's knowledge & consent. The friend should start by notifying the ins. co. that he never knew of such a policy or consented to it.

I don't think this is correct. I have heard that people can have an insurance policy on another person. without them knowing.

some Companies have been known to be holding policies on their employees without their knowledge or consent. These companies have even been paid on policies when the insured employees died.

husbands and wives holding on their spouse without them knowing...

 

[cbg]

How has your friend been damaged by this? He has not had to pony up any premiums, and the policy is now cancelled. EVEN IF it were fraud, and I'm by no means convinced that it was, what are his damages? What options is he looking for?

 

[Bobby22]

How has your friend been damaged by this? He has not had to pony up any premiums, and the policy is now cancelled. EVEN IF it were fraud, and I'm by no means convinced that it was, what are his damages? What options is he looking for?

So in other words I can take a policy out on someone without their consent/signature? I would assume that is fraud unless I'm wrong****************************.

 

[cbg]

In some circumstances yes, you could, and it would not be fraud. We don't know if those circumstances exist here.

But you didn't answer my question. How has your "friend" been damaged by the existance of this now-cancelled policy?

 

[justalayman]

Mother passes away a few months ago, the brother and his wife move in......Mail comes to the house with friends name and his brother. It is a insurance policy cancellation notice(friend being the insured)......It appears his brother/mother had taken a policy out on him without him knowing.

something is amiss. Why would it have friends name on it? The letter would be addressed to the owner of the policy and unless somebody opened it, they wouldn't know it was a cancellation for an insurance policy. Was somebody snooping where they didn't have any business to be?

If friends name is listed as an owner, friend needs to contact insurance company and inform them of the fraud since friend never signed a contract to purchase the policy. If brother and mother purchased the policy, it wouldn't have friends name on, at least as a minimum, the outside of the envelope and likely not even the inside.

 

[Banned_Princess]

I'm pretty sure that this isn't fraud at all. Its not like a auto or homeowner policy where there needs to be a certain level of ownership.

As long as the brother didn't misrepresent this policy, where maybe someone acted as the person to be insured for the examination, as long as the policy is paid, you can insure anyones life.

I'm pretty confident that my parents have a policy on me I don't know about.

 

[justalayman]

I suspect Betty knows what she is talking about. Generally, you must have an insurable interest (in an adult) to be able to purchase an insurance policy. OP has given nothing that would suggest that is the case. Even then I do believe the insured is required to approve of the policy. That way you don't have mafia hit men running around insuring their targets.

 

[las365]

What is the name of your state (only U.S. law)? NJ

A friend had got sick in 2005, then moved in with his mother shortly after that. His brother(insurance agent) suggested he get a policy. My friend said he had no reason to get insurance since he doesn't have wife or kids.....Mother passes away a few months ago, the brother and his wife move in......Mail comes to the house with friends name and his brother. It is a insurance policy cancellation notice(friend being the insured)......It appears his brother/mother had taken a policy out on him without him knowing. What are his options if he even has any?

I'm going to guess that brother and Mom took out a life insurance policy on friend in case he died while sick and living with Mom, so if that she would be able to afford to pay for a funeral. Mom outlived friend, brother cancelled the policy.

I have no idea whether it was legal or not, but I don't see anything sinister about it. Friend didn't mind moving in with mom while he was sick and presumably low on money, but he wasn't going to get a life insurance policy to help her if he predeceased her. So brother did it for him.

 

[Banned_Princess]

I cant find anything regarding if the insured must know or agree to be insured. The posted regulations is silent on the matter.

the only issue I can think of is if the policy requires a physical. then obviously the insured must know about it because he needs to be examined.

 

[cbg]

Also, many employers offer dependent life insurance. I can guarantee you that no permission of the insured is required in those circumstances.

 

[justalayman]

as I said, there must be an insurable interest. I have not found anything requiring notice to the insured for individual policies. Not saying it's not there. Just haven't found it I did find find recent legislation that does require a company who is insuring an employee to give notice to that employee. It doesn't require permission though and so far, I believe it is still just a bill. Don't know of that is something new or already existing in statute either.

17B:24-1.1. Insurable interests
1. a. For the purpose of life insurance, health insurance or annuities:


b. No person shall procure or cause to be procured any insurance contract upon the life, health or bodily safety of another individual unless the benefits under that contract are payable to the individual insured or his personal representative, or to a person having, at the time when that contract was made, an insurable interest in the individual insured.



e. This section shall not apply to group life insurance, group health insurance, blanket insurance or group annuities

.

 

[LdiJ]

A small policy, indicated as intended to cover burial costs if someone died, would often not require consent and often would not require a physical. If it was term insurance then no cash value would build up either.

So my first question would be...how much was the face value of the policy? If it wasn't any more than about 15k or less, then the very fact that it was cancelled would tend to indicate that it was a term policy intended for burial expenses. Even if it was a whole life policy, not much cash value would have built up in the time frame indicated.

Since the brother was the insurance agent, it might possibly have committed some fraud in setting up the policy (ie signed for his brother if consent was required) but again, since the policy has been cancelled I suspect not.

 

[cbg]

And I still want to know what damages the OP thinks he has incurred.