Life Lesson: How to Avoid Life Insurance Scam

Helen Siswanto
4 min readMay 20, 2022


Photo by Matthew Henry on Unsplash

“High Return Low Risk.”

Does that sound familiar? Have you ever had the time when you decide you want to invest in something and it turned out to be a scam? You walk into a bank, minding your own business and suddenly a friendly person wearing a suit approached you. “Hi, do you know what will you do when you retire? You look like you need life insurance. It’s great, It’s amazing, It gives you a HIGH return and LOW risk.”

You are immediately sold to the idea. You start the first deposit and the rest, and you allow the bank to take the money (according to your choice of insurance plan) from your bank account.

After several years (7–10 years) the moment you check your life insurance balance, instead of growing, the amount, is DECREASED. Not just a couple of % but drastically. You made some calls to the sales representative and the customer service. You read the insurance agreement book.

Nothing says that your money will decrease. You approached one of the company’s offices and you were assigned one of the insurance representatives. You began to ask “why is the amount of my money savings declining? You said, it will grow.”. The representative asked you to sit, gave you a cup of coffee, and ask you to calm down. “Well, every time we charge your bank account, we charge you for transaction, tax, and admin fee. We invested your money, and all the investment declines. ” You stared at the representative. You were so sure, that the first time you opted for life insurance NO ONE MENTIONED anything about using your savings for investment and no one mentioned any additional fee.

You kept rewinding the moment where you register your life insurance, the salesperson’s speech, the agreement book that you read.

Doesn't that sound like an in-direct scam?

Based on personal experience. The bank charged me Usd$1000 annually for 7 years. My experience after 7 years of saving money through life insurance is very painful. A very expensive lesson that I will remember for the rest of my life.

Life-saving through insurance can be a painful topic at times. My old man had something he refers to as “traditional life insurance”. They never charge any amount of money that goes into the account. But they do charge an administration fee when my old man transfers the funds annually. Because my old man always spoke highly of a “traditional insurance plan”, I went seeking something similar but end up being scammed.

*P.S: I do end up taking all the money that is left. They asked me to hand over the agreement book, and annual receipt (if I have them), and sign some important papers. What’s funny is, that they try to keep me going and kept saying how I must’ve miscalculated. I was so tempted, so I asked 2 sales representatives and the insurance manager;

“If it is alright to know do any of you purchase this company’s insurance plan?”.

1 sales representative answered no, the other representative just smiled and the manager dodged my question. Now we know, I’m not the only victim and these employees learned from previous customers’ experiences.

What I learned to avoid Insurance scams

So, after that painful life lesson, here are some things that I should've done before purchasing an insurance plan.

1. Never purchase an insurance plan from a new insurance company. We do have some of the most reputable insurance companies. Newer insurance companies always have much more competitive prices, more written benefits, and more freebies (like a water bottle or dining voucher). NEVER be tempted to do it. It's always better to wait for 1 year +. Because, if it really offers a scam, people can always talk about it and in fact, it will save you from being scammed.

2. Research the agency, Research the plan, and Research as much as you can. Lack of information can cause you a big massive problem. Big things always started small. This quote goes in both good things and also it also goes to bad things. Never underestimate how small a piece of information could be. YOu never know, that small piece of information, might actually save you from being scammed.

3. Ask for referrals. I was still young, growing up, and just landed my first job. I have my monthly payment, got a recent promotion, and I (*somehow) was too proud of myself that I didn’t want to ask anyone about it. Same as the previous point, referrals are also a great piece of information. Ask your family members, co-workers, and friends. But if you still can't get many pieces of information from them, Social media can be a great place to ask about referrals. There are so many friendly users talking about their personal experiences.



Helen Siswanto

Don’t be surprised when stuff here is random. I just LOVE to write. Available for hire.