Life insurance can be abused - without some care on the part of insurers it is possible to apply for sums insured which can provide a motive for murder. It is especially heartbreaking when the victim is a child. A recent example, from Maryland, United States, is detailed at this link. Maryland has no legal limits on the amount of cover that can be bought on the life of a child, but as a result of this case is currently debating a new law which would do just that.
New Zealand has tough limits on the amount of cover that can be bought, which effectively prevents this from happening today. It is awful to remember, but it must be remembered: fraud is real, and sometimes crimes are committed in order to conduct insurance fraud.
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