Genuine policies always come with official policy documents, so if that’s missing, that should be a warning sign
Police in Sambhal, Uttar Pradesh, have busted a fake insurance racket and arrested six of its members. The scam mainly involved getting insurance policies in the names of individuals with serious illnesses. When they died, the perpetrators would claim the benefits after posing as family members or dependents.
In similar scams, many victims have also been sold fake insurance policies. Signing up for such policies may leave someone high and dry when they need it most.
Fake insurance policies are on the rise and there have been several reported incidents where people have been cheated.
How To Stay Clear Of Fraudulent Policies
“An immediate red flag should be if the policy being sold to you has a significantly low premium and unusually high cover. Also, genuine policies always come with official policy documents, so if that’s missing, that should be a warning sign,” says Siddharth Singhal, head, health insurance, Policybazaar. One way of avoiding falling victim to fraud is to buy insurance only from reputable insurance companies. The company should have a legitimate online presence and be registered with the Insurance Regulatory and Development Authority of India (Irdai).
First, check for the unique identification number (UIN) number of the plan on the document. Then verify the given policy number from the direct customer service channel. “Also, avoid quick signups, and ensure to read up on the insurance company before payment. It is advisable to buy either directly from the insurance company or through a legitimate broker,” says Singhal.
Also, if you are being asked to pay the premium in cash or to a personal account, it is definitely a red flag. Another red flag is if you are asked to make the payment urgently and are offered special time-bound discounts.
What To Do In Case You Have Been Duped
If you have unknowingly bought a fraudulent insurance policy, here are the steps to take.
First, report to Irdai and file a complaint on their portal. Also, lodge a police and cybercrime complaint and file a first information report (FIR) for fraud. If there is still no recourse, go to consumer court and seek refunds or legal action.
The Irdai has introduced a set of guidelines—the Insurance Fraud Monitoring Framework Guidelines, 2024, to strengthen the insurance sector’s defenses against fraud. The framework is a response to growing fraud and also a step towards empowering and protecting policyholders.