Whole life insurance is not a scam because it may provide the benefits that it promises in certain circumstances. However, many people learn that whole life insurance is not in their best interest.
In some cases, individuals may face scams when purchasing life insurance. A life insurance investment scams lawyer can identify these acts of financial misconduct, help you understand them, and assist you in securing compensation for the losses you face.
What Is Whole Life Insurance?
Whole life insurance gives you an insurance policy that can last the rest of your life, unlike term life insurance. These policies will pay out a tax-free benefit after you pass, giving your loved ones the funds they need to move forward after your loss.
Additionally, whole life insurance generally includes a savings component. This savings component allows for cash value to accumulate in some cases. Interest on these policies accrues using a tax-deferred system.
In certain circumstances, whole life insurance policies use level premiums, so the money you pay every month should stay on the same level. Some people find whole life insurance policies a solid choice to protect their families, while others find them financially draining and prefer term policies or another alternative altogether.
Is Whole Life Insurance a Scam?
Whole life insurance does not represent a scam in and of itself because it can delivers what it promises if presented to you fully and accurately. However, it has pros and cons and doesn’t represent the best choice for life insurance for everyone.
Many people find that whole life insurance costs them more than their loved ones will receive through a death benefit because it tends to have higher premiums and lasts for the rest of your life.
You can discuss whether whole life insurance represents a solid choice for your situation with your financial advisor.
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You May Face Whole Life Insurance Scams
While whole life insurance is not a scam in and of itself, financial advisors may engage in misconduct when selling clients a whole life policy. Therefore, you may lose money in a scam associated with your whole life policy.
For example, a financial advisor may try to convince you that you need to make changes to a whole life insurance policy, resulting in equal or inferior coverage. If the advisor makes this suggestion to boost their salary, it may qualify as an act of misconduct.
In this situation, you can reach out to an investment fraud lawyer for help reviewing your next steps and options to secure compensation for your losses.
How do You Know if You Face a Whole Life Insurance Scam?
A lawyer can review your situation and determine if a financial advisor engaged in misconduct and cost you money through a whole life insurance scam. Due to the complicated nature of insurance policies, you generally want a professional to look for any signs of misconduct.
Your lawyer may need to look through all financial documents and correspondence you have from your advisor. You may report any unexpected financial losses or changes to your policy if you believe you faced a scam.
What Happens if You Experience a Whole Life Insurance Scam?
You may lose a significant amount of money if you experience a scam related to your whole life insurance policy. In this situation, you can turn to a lawyer for help. In some situations, you may have a chance to seek compensation through Financial Industry Regulatory Authority (FINRA) arbitration.
Most financial advising firms require you to sign an agreement to handle any disputes through arbitration before they handle your investments. A lawyer can:
- Collect evidence of financial misconduct
- Explain what you should expect from arbitration
- Assist with every step of the process
The FINRA arbitration board can make a legally binding decision about your case, providing you with compensation to cover any money you lost through investment misconduct and potentially providing funds to address any other losses you experienced.
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Are There Other Types of Insurance Fraud?
You may lose money through other forms of financial misconduct associated with insurance policies. For example, you may need help from a legal professional if your financial advisor engages in a:
- Life insurance premium scam
- Variable Universal Life Insurance (VUL) scam
- Private Placement Life Insurance (PPLI) scam
- Indexed Universal Life Insurance (IUL) scam
Generally, these scams involve a financial advisor making investment suggestions that go against the best interests of their clients. An attorney will need to establish that misconduct occurred and led to your financial losses to successfully handle FINRA arbitration for cases involving insurance fraud.
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Talk to Us About Whole Life Insurance Scams
Is whole life insurance a scam? This form of insurance is not automatically a scam, though it may not represent your best choice, depending on your financial situation. However, financial advisors may engage in misconduct when handling a client’s whole life policy.
If you believe you lost more than $100,000 through misconduct, you can reach out to our team at Meyer Wilson for help. We have over 75 years of combined experience and the resources to help you during this challenging time.
You can learn more about us today. When you’re ready to get help, you can call or complete our online contact form.
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