Irdai Steps Up Checks On Dark Patterns In Insurance Sales

The Insurance Regulatory and Development Authority of India (Irdai) is tightening its watch on “dark patterns” in insurance, with an independent review planned across the industry over the next nine months.

Dark patterns are design or sales practices that appear routine but can push customers towards choices they may not otherwise make. They can make it harder to compare products, opt out of add-ons or understand the full cost and conditions of a policy.

Irdai chairman Ajay Seth has said that the regulator decided to seek an external assessment after most insurers reported that they did not use such practices in their self-assessments. The Institute of Public Auditors of India has been asked to study and monitor the issue.

The move comes as more insurance purchases, renewals and servicing journeys shift online. While digital channels can make insurance easier to access, they can also create new obstacles for a consumer trying to make an informed choice.

When Buying A Policy Becomes Difficult

One concern flagged by the regulator is the requirement to share personal details before even getting a basic premium quote. A person looking to compare policies may be asked for a mobile number, email address, date of birth, or other information before seeing product options or pricing, according to a recent report by Telegraph India.

Such processes can turn a simple search into a lead-generation exercise. Consumers may then receive repeated calls or messages even when they have not decided to buy a policy.

Dark patterns can also appear in subtler ways. An add-on cover may be pre-selected during the purchase journey, increasing the premium without drawing sufficient attention to the change. A customer may face multiple steps to decline an option but be able to accept it with a single click.

Important exclusions, waiting periods, co-payment clauses or charges may also be placed deep inside lengthy documents, while the sale screen highlights only the benefits. In some cases, wording around cancellation or the free-look period may make a policyholder feel discouraged from reconsidering a purchase.

What Policyholders Should Watch For

For buyers, the immediate lesson is not to treat an online insurance journey as a mere formality. Check the final premium carefully before making payment and see whether any riders or optional covers have been added automatically.

It is also important to read the policy wording, especially exclusions, waiting periods, claim conditions and cancellation rules. A low premium alone does not show whether a product is suitable.

Customers should compare more than one insurer and avoid making a decision only because a website or agent presents an offer as urgent or limited. A quote should be easy to obtain without forcing unnecessary disclosure of personal data.

The regulator’s intervention could lead to greater accountability in the way insurers design their websites, apps and digital sales processes. For the industry, the challenge will be to make insurance simpler without turning consumer convenience into a sales tactic.

With insurance penetration still low in India, trust will matter as much as product choice. A transparent buying process can help policyholders understand what they are paying for before a claim puts the promise of cover to the test.

FAQs

What are dark patterns in insurance?
Dark patterns are online sales or design practices that can steer customers into choices they may not have intended, such as accepting pre-selected add-ons or overlooking key terms.

Why is Irdai reviewing insurers for dark patterns?
Irdai plans an independent assessment after insurers largely reported no use of such practices in self-assessments. The review will examine digital sales, renewal and servicing journeys.

What should policyholders check before buying insurance online?
Review the final premium, optional riders, exclusions, waiting periods and cancellation rules. Do not make a decision based only on urgency prompts or a low quoted premium.