Life insurance is designed to protect our loved ones after we die but it can be a motive for murder or a way to escape a bad situation. Life insurance can pay for funeral expenses, unpaid bills and estate taxes after someone dies. But some will take life insurance policies to collect money fraudulently. Life insurance fraud comes in many forms, many of them that have been featured on crime shows and in movies.

For example, a wealthy man dies under mysterious circumstances. Police investigate his death and discover his young wife either killed him or hired someone to kill him so that she could collect the life insurance money and inherit his fortune. In many states, she could be charged not only with his murder but with life insurance fraud as well.


But when it comes to life insurance fraud, truth is often stranger than fiction. John Darwin of England faked his death in a canoeing accident in 2002 for five years, convincing even his friends and family. However, Darwin was alive and well and living with his wife, Anne. Even his sons did not know that Darwin was still alive. Five years after faking his death, Darwin walked into a British police station, claiming he couldn’t remember the past five years. Later he and his wife admitted that Darwin had faked his death. The Darwins said they committed the life insurance fraud because they needed the money to pay off mounting debt.

Life insurance fraud laws vary from state to state. In most cases, anyone convicted of insurance fraud will serve some jail time. Anyone convicted of insurance fraud in Georgia faces two to 10 years in prison, fines up to $10,000 and will likely pay restitution, according to the Georgia Insurance Commissioner’s website, http://www.gainsurance.org/Fraud/home.aspx. Many states, like Georgia, have a fraud division that investigates mysterious claims.

However, in life insurance fraud affects more than its victims. Retailers claim that shoplifters and other thefts can drive up prices. That same could be said of insurance fraud. While others are collecting hefty fake claims, honest people are paying more in premiums to make up the difference.