Life insurance frauds examples

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Life insurance frauds are deceptive practices aimed at obtaining financial benefits from insurance policies through deceitful means. These frauds can involve policyholders, beneficiaries, or even insurance agents. The consequences of life insurance frauds can be severe, leading to financial losses for insurance companies and higher premiums for honest policyholders. In this article, we will explore some examples of life insurance frauds to raise awareness about these fraudulent activities.

Staged Deaths

Overview: Staged deaths involve individuals faking their own deaths to claim life insurance benefits. This type of fraud often requires careful planning and collaboration with others to create a convincing scenario.

Example: In 2012, a man named Jose Lantigua was declared dead in Venezuela, and his wife filed a life insurance claim. However, investigations revealed that Lantigua had staged his death to escape mounting debts and legal issues. He was later arrested and charged with insurance fraud.

Stranger-Owned Life Insurance (STOLI)

Overview: Stranger-Owned Life Insurance (STOLI) refers to a scheme where investors persuade individuals, often elderly or financially vulnerable, to purchase life insurance policies with the intention of selling the policies to investors for a lump sum.

Example: In 2009, a case involving STOLI came to light when a group of investors convinced elderly individuals to purchase life insurance policies and then sold those policies to investors for a significant profit. This fraudulent scheme resulted in substantial financial losses for the insurance company and policyholders.

Viatical Settlement Fraud

Overview: Viatical settlements involve the sale of life insurance policies by policyholders who are terminally ill. Fraud can occur when policyholders misrepresent their health condition to obtain a higher payout.

Example: In 2015, a man named Joseph Caramadre was convicted of viatical settlement fraud. He exploited terminally ill individuals by misrepresenting their health conditions to purchase their life insurance policies at a fraction of their actual value. Caramadre and his associates made millions of dollars from these fraudulent transactions.

Agent Fraud

Overview: Agent fraud occurs when insurance agents deceive policyholders or insurance companies for personal gain. This can involve forging documents, providing false information, or misappropriating premiums.

Example: In 2018, an insurance agent in California was charged with fraud for submitting false applications and altering policy documents to increase the coverage amounts. The agent received higher commissions while putting policyholders at risk of inadequate coverage.


Life insurance frauds are detrimental to both insurance companies and honest policyholders. Staged deaths, Stranger-Owned Life Insurance (STOLI), viatical settlement fraud, and agent fraud are just a few examples of the deceptive practices that can occur in the life insurance industry. It is crucial for insurance companies and law enforcement agencies to remain vigilant in detecting and preventing these fraudulent activities to maintain the integrity of the insurance system.


– Insurance Information Institute:
– Federal Bureau of Investigation:
– National Association of Insurance Commissioners: