Life Insurance Payout Scam

After a death, life insurance beneficiaries are often unfamiliar with claims procedures and may be approached by someone posing as an insurance agent, claims adjuster, or 'benefits processor' offering to expedite the payout. The scammer requests an upfront fee described as a processing charge, tax, or release fee, which legitimate insurers never require before paying a valid claim.

A more sophisticated version targets the insurer directly rather than the beneficiary: the fraudster obtains enough personal information about the deceased and the policy to file a fraudulent claim before the real beneficiary does, providing false banking details so the payout is diverted. This is more likely when the death and policy details have been publicized or when the fraudster has an inside connection to the deceased's affairs.

Beneficiaries should file claims directly with the insurer using contact information from the original policy documents, never through a third party offering to 'help' for a fee, and should ask the insurer specifically whether any other claim has already been filed on the policy.