Many people would have gotten posts stating that the government has a life insurance scheme to take care of their expenses during their final days.
This article will explain the actual truth behind these sorts of posts and letters.
Don’t get sucked in to thinking that “State Regulated Insurance is “Free Insurance”. It isn’t.
What is it Exactly?
The mail’s content may differ from region-to-region, but essentially the message they convey is the same.
A few common phrases people can find in these mailers are “state-regulated burial program”, or “new state-regulated life insurance program” or “state-regulated program for final expenses”. These mailers are solicitations to encourage people to get life insurance schemes.
These emails are a type of advertisement to boost sales for the local life insurance agents in the area. The mail may even have their contact details specifying them as a government authorized agent.
Here is an example of the body of the mail,
“You may be granted a State-Regulated Life Insurance Program that will take care of all funeral expenses. Regardless of the medical conditions and even if you did not possess life insurance schemes before.
You must be aware of these programs’ benefits that will take care of any funeral-related expenses up to XXX, XXX $. This program is available at zero cost to state residents. You can avail a free briefing of this program. Fill in your details and return this postage-paid card.”
If one of the recipients of this type of mail were to send back the card, they would have faced: agents who come to their houses and attempt to make them invest in a life insurance scheme. Or agents call them to book an appointment for the briefing of benefits eligibility.
Agents will usually distribute these leads (postage cards), leading to multiple calls from agents to the same person trying to persuade them into taking a life insurance scheme.
Does the State Sponsor these Schemes?
These programs have no affiliation with state sponsoring, nor will any state funds be allotted for the person’s funeral expenses.
If people go through the mail carefully, a disclaimer will state that these schemes have no affiliation to state governments.
Then why do these people confidently send emails claiming to be “state-regulated”?
The wording of these emails is done in a way to get the recipient’s attention and gain their trust. This duplicity is because most people tend to be trusting of their government and its agencies. A government agency is less likely to commit identity theft.
When the IRS interrogates people, they give their SSN without apprehension. People feel safe giving government agencies their personal information because although the government is not perfect, they are less likely to commit fraud or indulge in illegal activities.
That is why agents specifically use this phrase in their mails, as there is a higher probability of them getting a response. When these cards come back, agents term them as leads or sales leads. And these numbers are significant to insurance agents, which is why they resort to these deceptive methods.
The Real meaning of “STATE REGULATED”
While these schemes have no affiliation to the government, they are indirectly “state-regulated”.
Any agency wishing to provide life insurance to the public must get prior approval from the Department of Insurance. This department comes under the governance of the state government. The agency/company must provide details of applications, rates, and other information regarding finance and funds to the government. These are scrutinized and then approved by the Department of Insurance.
So technically, these mailers are not entirely false though they are stretching the truth beyond a limit.
These mailers deliberately mislead the public into thinking there is some government authority or agency run by the state that manages these programs or regulates these schemes. In actuality, the government and its agencies do not know these mailers or insurance companies.
The State Insurance Policy
Usually, these mails are precise to the recipient’s region or state.
The mail may contain words like:
“State Insurance Benefits 2021 in North Carolina”
“Information on Insurance Benefit: Mississippi Only”
“Government Benefit Supplement Policy for Funeral Expenses in Pennsylvania”
Or even Texas, Alaska, Georgia, or any other state.
These emails are a template. The agent fills in the name of the respective state before sending it. It isn’t until the same person receives identical mail from 2 different states that they become aware of the mail’s similarities. As this is unlikely, agents have been using this method successfully for a long time.
The truth is that these schemes, policies, programs, or any other life insurance related mailer claiming to be state-regulated, are not endorsed by the state or the government in any way.
Also, these benefits that the mail claims to be exclusively for the residents of that particular state are available to all the state’s residents. It is the same company sending the mail through different branches or agents stationed in the other states.
It is just a ploy to make the public believe that the government is sending the mail. The exclusivity factor may also encourage some people to enroll in the program, and thus the mail’s success.
State-Regulated Program for Final Expenses: Real or Scam?
The claim that insurance is from government funds is not valid. The insurance scheme itself is real, and any benefits they mention are also real.
Actual insurance agencies or their agents send these posts/letters, and they will contact the recipient if they show interest. The government licenses these agents, and they do sell life insurance schemes/programs. These letters don’t usually lead to identity theft or cash fraud, though there may be exceptions (for example, if the government doesn’t approve the agency).
But if it does turn out to be an actual agency, it is worth mentioning that a company that tries to lure customers with false promises is not all that trustworthy. It may not be advisable to do business with an agency that relies on deception to increase sales leads.
People who are genuinely interested in getting life insurance that can take care of their funeral expenses can still opt for other insurance companies. These are safer than the agencies sending the mailers. Most people would want to take off the burden of funeral expenses from their family’s shoulders. There is a much simpler way to do this than sending the postage card back and booking appointments with those agents,
● Finding An Agency
A person wishing to acquire these life insurance policies should find an independent insurance company with a good reputation and approval from the Department of Insurance of that state.
● It is better to opt for an agency that represents at least ten insurance companies, preferably more. This feature means they have good knowledge of the different life insurance schemes available in the market and can get them to enroll in the most suitable one.
● A primary method to figure out if the insurance agency is of repute is to check reviews of the agency online. Facebook, Yelp, Google, and a host of other review sites have reviews of insurance agencies for people to use as a reference. These are actual client testimonials; they are more credible than any mailer.
● Another essential aspect to look out for is the agency’s accreditation. They must have a BBB rating. It is also prudent to check the Department of Insurance’s website to check if the agency has a license.
After this process, people can shortlist a list of agencies they can approach. All agencies will be more than happy to give information regarding the various schemes. This briefing and any catalogs that explain the schemes are all free. Thus, people can visit many agencies and gather adequate information before investing their money into a funeral benefits scheme.