Marjorie Corvalan, Senior Counsel in RGA’s Asian Pacific region, provides practical advice to help claims assessors detect fraudulent claims associated with falsified death.
Assessing life insurance claims fraud is by no means a straightforward process. And when a death occurs in a country unfamiliar to the insurer, there are several additional factors to consider.
Differences in language, documentation, procedures, and cultural norms concerning death and burial add multiple layers of complexity to an already complicated process. When factoring in that the potential claim may not be genuine, gathering appropriate information becomes a minefield.
Although the concept of faking one's death to collect life insurance or for other purposes is not new, it had long been limited to the ingenuity of the individual(s) involved. Those who want to fake their death today, however, can get help in the marketplace. Travelers can purchase "death kits" that include documents that "prove" a person's demise. Since a body is required to cash in on a life insurance policy before a seven-year waiting period, there is even a cottage industry of morgues in some parts of the world that will provide corpses for a fee.
How many people successfully fake their own death is unknown, but the industry does know several ways to detect potential fraud. Each claim will turn on its facts, underscoring the critical need to secure a good understanding of the circumstances around the death, body identification, and how the death certificate was issued.
Some considerations include:
1) Body identification. Key questions to ask: were the police called to the scene when the body was found, and if so, how can the insurer get access to the police report? The police report is likely to include witness statements helpful in establishing the death's circumstances. Other facts around the death can consist of collected evidence and who identified the body.
2) Medical records. If the deceased was taken to a hospital, it could mean there are hospital records available to request. Depending on the insurer's protocols, the chief medical officer's staff should be enlisted to review the records to ensure they belong to the departed person. Locating and obtaining medical information, such as dental records, can also help with physical identification.
3) Autopsy access, when applicable. If an autopsy was performed, the insurer should obtain the autopsy report as soon as possible.
4) Death Certificate. The death certificate requires verification, but that can be difficult in a jurisdiction unfamiliar to the insurer. Questions to ask include: what is the usual local process for issuing a death certificate, and was it followed in this claim? If the process was not followed, that might indicate concern.
5) Cremation. Life insurers have seen claims where the body is cremated before the death certificate is issued, which may indicate something is wrong. However, most jurisdictions require that a death certificate be issued before cremation, and some religions require prompt cremation. Questions to ask include: was the body cremated, how soon after death, and why?
6) Appropriate Documentation. Every country has rules governing the admissibility of documents as evidence in court proceedings. Before seeking to obtain a document to use as evidence, the claims assessor should ensure its format is admissible in the relevant jurisdiction. Consider requiring the documents to be notarized and an apostille attached for further authentication. Also, there is usually only one opportunity to obtain information. If not done correctly the first time, there might not be another chance.
7) Last Will and Testament. Find out if there is a will, the executor's name, and the relationship to the deceased. Usually, the executor is a close family member such as a spouse, parent, son, daughter, or close friend. If the executor is not someone close to the deceased, there may be a cause for concern.
8) Assets. Ask about the estate's assets. Usually, estates contain possessions such as property, an automobile, or money. If the only asset in the will is the life insurance policy, something might not be right.
9) A local investigator. A good and reputable local investigator is crucial in investigating an overseas death. Ensure the investigator has a high level of language proficiency. Read the report carefully because incorrect use of words such as "illegal" may invalidate a report. Seek clarification to avoid any language issues.
10) Legalities. Seek legal counsel to best preserve privilege and confidentiality around communication. Carefully manage multiple communications with several parties to avoid waiving this privilege. It is always harder to challenge a decision that has already been made.
While it seems hard to believe in today’s digital age, people do still try to fake their deaths for the life insurance benefit. Diligence, especially in countries unfamiliar to the insurance company, is the key to stopping such fraud in its tracks.
