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Insurance and Consumer Finance Information for Seniors
Topics: Insurance > Consumer Finance > Other Resources
Insurance Precautions

The escalating cost of insurance is of concern to all consumers. Senior citizens, however, feel the greatest impact, since rising costs can put a significant dent in their fixed retirement income. One thing that can help rein in these costs is guarding against improper claims.

It is estimated that improper insurance claims cost insurance companies and their customers $20-$30 billion annually. The costs of these claims are passed on to the consumer. Because senior citizens are the fastest-growing segment of the population, they carry a disproportionately greater burden of the cost of these bogus claims.

Here are some preventative measures that seniors can take to help keep insurance rates as low as possible:

Seniors as Offenders/Victims of False Insurance Claims
  • Making false statements on insurance applications
  • Submitting false claims for property loss or damage
Penalties for Submitting False Claims
First Offense
Second Offense
Third Offense
Each Subsequent Offense


While seniors can be the offender by making false statements on insurance applications or submitting false claims, all too often seniors are used by others as unwitting vehicles for submitting false insurance claims.

For example, some health care providers offer "free" examinations but then ask for the senior's medical insurance number and use it to bill for the services. If the service is indeed free, there should be no need to supply medical insurance information. Seniors can catch on to this kind of scam by getting into the habit of checking their monthly statement of benefits.

Checklist of what to look for on your monthly benefit statement:

  • Did you receive the medical services or supplies indicated in your Medicare statement, and/or supplemental (secondary) insurance?
  • Did your physician order the service or procedure?
  • Were you charged more than once for the same service?
  • Did a medical service or screening that was advertised as "free" appear on the statement?

If something looks suspicious, you should call:
  • Your health care provider for an explanation or clarification of unusual or questionable charges
  • Medicare insurance company listed on your monthly benefits statement
  • Medicare hotline at 1-800-HHS-TIPS (447-8477)
  • NJDOBI's Consumer Inquiry and Response Center (CIRC) at 609-292-7272

Seniors as Targets of Staged Accidents

Seniors can also be targets of staged or intentionally caused automobile "accidents." In a typical example, a group of people in an older car pulls suddenly in front of a newer car driven by a senior citizen and stops abruptly causing a rear-end collision. All of the occupants of the other vehicle, claim to be hurt and blame the senior citizen. The senior's insurer is then hit with bogus medical claims.

Here are some things to look for in a staged accident:
  • Other vehicle is an older model
  • Multiple occupants in the other vehicle
  • Occupants of other vehicle claim to have soft tissue injuries (aches, pains) but no signs of blood or broken bones
  • Occupants of other vehicle decline on-site medical treatment, but say they will see their own doctor
  • Collision occurred after you were "waved ahead"

If you are involved in an automobile accident, remember these tips:
  • Always request to have a law enforcement officer at the accident scene, even if it appears minor. If not possible, go to the nearest law enforcement agency and make a verbal report.
  • Get a copy of the accident report for your own records.
  • Report the accident to your insurance agent or company as soon as possible.
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Consumer Finance Precautions

Promissory Notes:
  • Promissory notes are usually not sold to the general public - ask questions
  • Is the investment registered with the Securities and Exchange Commission?
  • Is the rate of return offered higher than current fixed-rate investments?
  • If it sounds "too good to be true", it probably is.

Warnings About Payday Lending
  • The fee charged for the short-term loans converts to a very high interest rate.
  • Ask yourself, do you really need to borrow at double or triple digit interest rates?
  • Look for more conventional, and regulated, sources of loans at fair rates.

Viatical/Life Settlements
  • Before selling your policy, find out if you have cash value that you can borrow from the policy.
  • Find out if you have an accelerated death benefits provision that could pay you now.
  • Check with your tax consultant and financial planner for possible financial implications.
  • Check on the impact the viatical income will have on food stamp and Medicare eligibility.
  • More information on Viatical/Life Settlements

Avoiding Predatory Lending Schemes
  • Ask yourself, "Do I really need to refinance my home?"
  • Compare the interest rate being offered to rates offered by other financial institutions.
  • Don't be rushed to refinance if that is not what you really want to do.
  • Have YOUR legal representative at the closing.
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Other Resources

Topic Agency (web site) Telephone
Financial Concerns/Questions NJ Department of Banking and Insurance 609-292-7272
Insurance Concerns/Questions NJ Department of Banking and Insurance 609-292-7272
Insurance Fraud NJ Office of the Insurance Fraud Prosecutor 1-877-55-FRAUD
Medicare (general information) U.S. Department of Health & Human Services 1-800-633-4227
Medicare Fraud U.S. Department of Health & Human Services - Office of the Inspector General 1-800-HHS-TIPS

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