There may be potential claims concerning fraudulent accounting practices by life insurance companies and long-term care insurance companies. The accounting method may result in the policyholder being charged excessive insurance premiums.
Standard Accounting Principles apply when Calculating Premiums
We are all used to paying a premium for insurance. Whether that is our car, health, auto, or home insurance. We might also pay premiums on life insurance and long-term care policies. How that premium is calculated may be a basis for a fraud claim. Insurance companies set a price, or premium, for the coverage which pays for:
- the cost of any benefits which may be paid to the policyholder,
- the commission paid to salesperson who sold the policy,
- the costs of administering the policy, company overhead, and
- the profit the insurance company hopes to make on the policy.
Calculating the level of premium for a particular type of policy involves an accounting method determined internally by the company, guided by standard accounting practices. Failure to adhere to standard accounting principles when calculating premium changes can lead to fraud.
Significant Premium Increases or Notices of “Out of Insurance” may Red Flag Fraud
Some insureds may receive notice of changes to their policy of their premiums. In instances where you’ve been notified of a substantial increase in premium payments for life insurance or long-term care insurance policies, or if your insurance company has told you your policy’s “out of insurance” has increased, you may have a valuable legal claim.
Review your plan documents and ensure your life insurance company is not engaging in fraudulent accounting practices.
Hire a Firm Skilled in Dealing with Insurance Fraud
If you believe your insurance company may have fraudulently increased the premiums on your life insurance or long-term care policies, you may be able to file a claim. The Martin Law Firm has experience in handling claims of insurance fraud. Contact them for a free consultation today.