When I was a financial consultant for Citigroup I had to learn quite a bit about insurance policies (given that I was a licensed agent and had a license), including some of the scams that are in them.
Unfortunately, the overwhelming majority of people are taken by what I consider to be scams but that are perfectly legal.
I'm sharing this for those who don't know, if you know it great! If not, pay attention!
One of the most common perfectly legal "scams" are what are called "Accidental Death and Dismemberment" policies or "AD&D" policies.
Usually these are available through your work or as a rider on a regular insurance policy. Often you can even get a brochure for them in the mail.
They offer you a MASSIVE sum of money for some ridiculously low payment such as $1 a month or so.
That's your first clue.
Often you are insured for something like a million dollars in the event that you suffer an accidental death or dismemberment in an accident at work.
But here's the catch - the specifics on these policies are so exclusive as to be absolutely ridiculous - and if you think you're going to collect without a fight from the insurance company on a policy that you paid $1 for - you got another think coming. (Can you blame them? I wouldn't want to pay out either if you only paid $5.00 on a policy and it cost me $1,000,000.00 to honor the contract - and just think about it - does that REALLY make sense? Look CLOSELY at what's in the contract.)
Unfortunately these policies are out there.
Even more unfortunate is many families think they are insured with these kinds of policies and when disaster strikes they get caught with their pants down and end up screwed and destitute when the excrement hits the rotary cooling device and unable to fight an insurance company legally and the lawsuit takes years before it's resolved with a 50/50 posibility that they WONT be hosed worse than they were with legal fees when its over.
Essentially the goal of an AD&D policy is to get tens of thousands or even a couple million people to sign up for a $1/month policy that they are never going to have to pay out on. That's $1,000,000.00/month that the insurance company is very unlikely to ever have to pay out on. It's a great money maker for them. But it's costly for you if you ever think you're going to have to rely on it.
For example, in an AD&D policy, lets say in your AD&D policy that you paid $1.00/month for, you are covered if you get hit by a truck at work. And then you GET HIT BY A TRUCK! GREAT! You're covered.
Unless.
You die on the 91st day after you got hit for example. Then the policy doesn't cover you.
Or
You have a heart attack from stress in a pre-existing condition that was exacerbated by the truck-impact but the heart attack was not directly caused by it because of the pre-existing condition (okay Obama-ites, turn off that liberal brain thats saying "pre-existing conditions are covered!" - that's health care and that's not for a few years and that's designed to put the insurance companies out of business so you get your stalinists healthcare because that's all that will be left - that's not life insurance).
OR
You get hit by a truck but it's not at work on the fourth of July during a hailstorm while the Star Spangled Banner is playing on a radio station and a parade is going by with one baby zebra in it.....you're not covered.
This is where unfortunately the consumer gets taken, but then, it't not the company's fault if you get scammed by them because that's all in writing and you CAN read it. It scares me how many people sign things in this country without reading it. Talk about the land of opportunity for a con-artist! This is where it's YOUR responsibility to learn and plan and it's OUR responsibility as parents and consumers to educate ourselves and our children just like conservatives are supposed to and claim we should!
A good term life insurance policy is about the best bet you can have but I'll get into those another day. But for now, here's Daffy Duck - the Accident Insurance Policy Salesman. I think this is from 1950 or 1960 something, and the sound sync is a bit off but it still cracks me up because this is exactly how the insurance companies operate - back then just as now! Don't get me wrong, there ARE good insurance companies and policies out there, but like anything else, there's a lot of junk to sort through as well. Being an informed and savvy conservative is the first step to not getting taken!
