Scam Alert: Longevity Surveys Short on Honesty

The offer is tempting: Get a free wheelchair, motorized scooter or payment of up to $1,000 for completing a “longevity survey” on your health and personal history.

But law enforcement officials are warning that these surveys, typically conducted by insurance companies, could be a ruse to steal identity. Or they could be the basis of schemes to sell you a policy known as a STOLI, an acronym for stranger-originated life insurance, or a SPINLIFE, for speculator-initiated life insurance. In these ploys, insurance agents encourage older people to purchase life insurance that will be transferred a couple of years later to an investor. That investor then makes the required premium payments and collects on the policy when the insured person dies.

Even when longevity surveys are not conducted by insurance agents, they provide crucial information that can be sold to benefit STOLI and SPINLIFE investors who, in essence, are wagering on the insured party’s death.

Karen Anderson of South Carolina’s Lowcountry Area Agency on Aging say of the policies,  “We find no legitimacy for them at all, and warn senior citizens to not partake in these surveys.”

Telemarketers have been calling older people across the country, tempting them with payments and goods for completing these surveys. “I can’t say how many of our citizens were approached, but we know of several who gave out their personal information,” adds Anderson. “Luckily, our staff were able to intervene before any identity theft was done.” The South Carolina Attorney General’s Office investigated those phone calls, she adds.

None of the participants received the promised wheelchairs or money.

These surveys—more than 70 pages, according to Anderson—ask for highly personal information, including Social Security and Medicare numbers, as well as extensive health and financial information.

“Respondents are also asked to mail highly personal documents after completing these longevity surveys,” says Andrea Gainey of the Washington County Sheriff’s Office in Florida’s Panhandle, which has warned its citizens about this potential scam. “It seems to have all the makings for identity theft.”

Gainey’s advice: “If someone ever calls you asking for your Social Security, Medicare or bank account information, hang up. A legitimate agency will not ask for this information; even they have had to adapt their information-gathering processes because of these scams.”

For more information on longevity surveys, and STOLI and SPINLIFE ploys, read these warnings from:

• The California Department of Insurance

• The Missouri Circuit Attorney’s Office (pdf)