ALU 202 - CH 15: RED FLAGS, ANTI-SELECTION, AND
FRAUD STUDY GUIDE|| 100+ QUESTIONS AND
ANSWERS|2025 UPDATE
their rights.
1. Introduction - Key Terms and Definitions
: a false representation of a matter of
fact, whether by words or by conduct, by false
or misleading allegations, or by concealment
of what should have been disclosed, that de-
ceives and is intended to deceive another so
that individuals will act upon it to their legal
injury
2. Introduction - Key Terms and Definitions
: the INTENTIONAL withholding of
information that one knows to acquire insur-
ance on a more favorable basis than one could
have if this information were known to the
insurer
3. Introduction - Key Terms and Definitions
: the act of INTENTIONAL conceal-
ment or fabrication of a material fact, which,
if known to the other party (i.e. the insurance
company), could have terminated or signifi-
cantly altered the basis of a contract, deal or
transaction
4. Introduction - Key Terms and Definitions
: a secret agreement, especially for
fraudulent or treacherous purposes, created
w/ the INTENT to defraud other parties of
,ALU 202 - CH 15: RED FLAGS, ANTI-SELECTION, AND
FRAUD STUDY GUIDE|| 100+ QUESTIONS AND
ANSWERS|2025 UPDATE
Fraud
Anti-selection or adverse selection
Material misrepresentation
Collusion
,ALU 202 - CH 15: RED FLAGS, ANTI-SELECTION, AND
FRAUD STUDY GUIDE|| 100+ QUESTIONS AND
ANSWERS|2025 UPDATE
-it can occur anywhere in the sales process info. The # varies
and the underwriter must have adequate based on the
training and critical thinking skills to be able product, how
to ferret out anti-selective practices
5. Introduction - Facts About Insurance Fraud
1) According to statistics from the Coalition
Against Insurance Fraud, the annual cost of
fraud across the entire insurance industry
is about $80-90 billion annually, of which
$ - billion of that is estimated in the
life insurance industry alone
6. Introduction - Facts About Insurance Fraud
2) A poll conducted in 2022 at a life insurance
industry fraud conference noted that:
---35% of insurance companies estimate that
- % of claims are found fraudulent on
investigation
---68% of consumers believe that fraud hap-
pens b/c people believe they can get away
with it
---51% of insurers have experienced an in-
crease in fraud as well as an increase in the
complexity of the fraud being committed
7. Introduction - Facts About Insurance Fraud
3) It has been estimated that - % of ap-
plicants will deliberately not disclose relevant
, ALU 202 - CH 15: RED FLAGS, ANTI-SELECTION, AND
FRAUD STUDY GUIDE|| 100+ QUESTIONS AND
ANSWERS|2025 UPDATE
$10-20 billion
5-10%
15-30%
FRAUD STUDY GUIDE|| 100+ QUESTIONS AND
ANSWERS|2025 UPDATE
their rights.
1. Introduction - Key Terms and Definitions
: a false representation of a matter of
fact, whether by words or by conduct, by false
or misleading allegations, or by concealment
of what should have been disclosed, that de-
ceives and is intended to deceive another so
that individuals will act upon it to their legal
injury
2. Introduction - Key Terms and Definitions
: the INTENTIONAL withholding of
information that one knows to acquire insur-
ance on a more favorable basis than one could
have if this information were known to the
insurer
3. Introduction - Key Terms and Definitions
: the act of INTENTIONAL conceal-
ment or fabrication of a material fact, which,
if known to the other party (i.e. the insurance
company), could have terminated or signifi-
cantly altered the basis of a contract, deal or
transaction
4. Introduction - Key Terms and Definitions
: a secret agreement, especially for
fraudulent or treacherous purposes, created
w/ the INTENT to defraud other parties of
,ALU 202 - CH 15: RED FLAGS, ANTI-SELECTION, AND
FRAUD STUDY GUIDE|| 100+ QUESTIONS AND
ANSWERS|2025 UPDATE
Fraud
Anti-selection or adverse selection
Material misrepresentation
Collusion
,ALU 202 - CH 15: RED FLAGS, ANTI-SELECTION, AND
FRAUD STUDY GUIDE|| 100+ QUESTIONS AND
ANSWERS|2025 UPDATE
-it can occur anywhere in the sales process info. The # varies
and the underwriter must have adequate based on the
training and critical thinking skills to be able product, how
to ferret out anti-selective practices
5. Introduction - Facts About Insurance Fraud
1) According to statistics from the Coalition
Against Insurance Fraud, the annual cost of
fraud across the entire insurance industry
is about $80-90 billion annually, of which
$ - billion of that is estimated in the
life insurance industry alone
6. Introduction - Facts About Insurance Fraud
2) A poll conducted in 2022 at a life insurance
industry fraud conference noted that:
---35% of insurance companies estimate that
- % of claims are found fraudulent on
investigation
---68% of consumers believe that fraud hap-
pens b/c people believe they can get away
with it
---51% of insurers have experienced an in-
crease in fraud as well as an increase in the
complexity of the fraud being committed
7. Introduction - Facts About Insurance Fraud
3) It has been estimated that - % of ap-
plicants will deliberately not disclose relevant
, ALU 202 - CH 15: RED FLAGS, ANTI-SELECTION, AND
FRAUD STUDY GUIDE|| 100+ QUESTIONS AND
ANSWERS|2025 UPDATE
$10-20 billion
5-10%
15-30%
