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What is Insurance Fraud?

  • Highlights:

  • Insurance frauds play on two primary emotions – fear and temptation

  • Lack of policy knowledge, creating a sense of urgency, and willingness to do your paperwork without a credit check are signs of insurance fraud


It is a human tendency to get worry about the future and ensure safety- both for us and our loved ones. We have lived through unprecedented times, where the COVID-19 pandemic swept the world by shock and changed life as we knew it. People feared for their lives and the lives of their loved ones, and this overwhelming emotion of love and fear often leads people not to think before they act.

This gave rise to insurance fraud that played on people’s insecurities and greed. Fraudsters lure unsuspecting people via calls, text, or emails and tempt them through different types of insurance frauds while getting access to their personal and financial data.

The fraud

The art of fraudulently selling services becomes quite easy when it comes to insurance as people are on the lookout for it, and it acts as a safety blanket, making it easier to fall prey to it. Apart from the nature of insurance, the terms and structures of the insurance products are often difficult to be understood by the common man. This makes it even easier for unscrupulous people to misuse it.

Though there are different types of insurance fraud, one of the most common insurance frauds includes impostors posing as employees and insurance sales agents of insurance companies.

They pretend to sell high coverage plans at low premiums to bait you into buying the policies or create a sense of fear by saying the terms and conditions have been revised and the increased premiums need to be paid urgently.

How do fraudsters conduct different types of insurance frauds?

They use various modes of communication to reach out to customers. One of the most common insurance frauds would sound like this:

‘Good morning, Mr. Kumar, I am writing to you from Bajaj Finance, and as our valued customer, you are entitled to an increased health insurance coverage at a small premium of Rs. Y. Since your association with us has been for a while. We would also like to offer our COVID insurance for a minimal amount of Rs. X. – this offer is exclusively for you to remain protected and protect your loved ones. Since this offer is only for our esteemed clients, it will expire within 24 hours. To activate it please transfer Rs. X and Y to the payment link being sent. Thank you!’

This is a common type of insurance fraud to dupe Mr. Kumar who will probably believe the impostor is from Bajaj Finance and go ahead with the scheme. But what he should have done is reached out to us at https://www.bajajfinserv.in/reach-us and confirmed if the offer was legitimate.

Another type of insurance fraud would be beneficiary fraud, where you receive a text saying that you are the beneficiary of some distant relative or even an unknown person and can claim the life insurance by transferring a certain processing fee.

Yet another fraud type exists where someone calls from a company that you are not insured with and asks you to port your existing policy to their company for better benefits. These fraudsters are sophisticated operators and even gather personal information from insurance companies on the pretext of being policyholders so their interaction with the victim can be smooth.

How to protect yourself from common insurance frauds?

Though these frauds have become widespread, it is not that difficult to dodge them and stay protected. If you receive a message from a company saying, ‘Congratulations, you are now eligible for a Rs. 7 crores insurance cover for a low premium of Rs. 120 per month. Sign up now!’, do not blindly sign up.



Verify the agent and the company

Ask the agent offering you the insurance policy for their ID and check if it is not fake. If the message claims to be from a known insurer such as Bajaj Finserv, call the customer care number or reach out to them at https://www.bajajfinserv.in/reach-us and check if the message was actually sent by them.

Take your time to respond

Remember that no legitimate insurer will give you an ultimatum or 24 hours to claim something permissible. Take your time to evaluate the situation and respond. If the person is creating an urgency and calling you continuously, threatening that the offer will expire, it should raise a red flag to you.

Due diligence of policy as well as the insurance agent

If you make a decision and go ahead with the purchase, check every official document, such as the quotes, receipts, and proposal forms from the insurance company. To determine further legitimacy, one more verification step could be asking the insurance agent to take you through the details and benefits of the policy. If he has superficial knowledge, chances are it is a scam.

Never make payments to another account

People often get tempted by promotional offers and guaranteed returns, and this is what is taken advantage of. The agent may ask you to transfer money into their account or another account for a fixed return. Never do that. Make sure you are transferring to the insurer, and the receipt has your details on it.



Always stay safe – never sign blank claim forms, do not let the agent fill your proposal form, do not disclose your financial and personal details, and never pay any processing fee to receive a claim. To prevent yourself from becoming a victim of insurance fraud – be alert, do your due diligence, gather information, spend some time evaluating, and be watchful of insurance scams.

If you have unfortunately been conned by a fraudster, file a complaint with the Insurance Regulatory and Development Authority of India (IRDAI) and your nearest police station. Raise a complaint with the insurer that the fraudsters were impersonating.

Do not let your emotions get the better of you. Evaluate everything in detail before taking a call.


Savdhaan Rahein. Safe Rahein.

Read more:
• Cautionary Note - https://www.bajajfinserv.in/cautionary-notice-new.pdf
• Infosec Page -
• Fraud Awareness Blog -

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