Did you know insurance frauds in India costs the country thousands of crores every year?
You might think it only happens to big companies or “someone else,” but the truth is, if you have health cover, car insurance, or a life policy, scammers could target you or your family next.
Even a simple mistake, trusting the wrong agent, clicking a fake link, or ignoring warning signs, can leave you losing hard-earned savings or discovering that your insurance was never valid at all.
Want real peace of mind?
Stick with me, this guide will break down how these scams operate, the tricks fraudsters use, and the practical steps you can take to protect your policies and your money.
What is Insurance Fraud in India?
Insurance fraud in India occurs when someone deceives an insurance company to gain financial benefits illegally.
It can involve policyholders, agents, brokers, or even service providers like hospitals. Fraudsters manipulate documents, make false claims, or misrepresent information to get payouts they are not entitled to.
Insurance fraud in India is at an all-time high, and the problem gets worse every year.
These scams aren’t just rare cases; they’re happening everywhere, in cities and small towns alike.
Here’s how serious it is:
- Fake death claims, false hospital bills, and made-up accident stories are used to steal crores from honest people and insurers.
- Even trusted agents have been caught selling fake policies or misusing personal information.
Recently, in Uttar Pradesh’s Sambhal district, a dangerous gang used details of poor and terminally ill villagers to make fake life insurance policies.
Sometimes, they even forged death certificates and roped in officials just to cash out on fake claims.
Many victims thought everything was normal, the paperwork looked genuine, and the people seemed trustworthy—until it was too late. Insurance scams are growing fast.
If you think, “I’m careful, it won’t happen to me,” remember: fraudsters are getting smarter every day.
Types of Insurance Frauds in India
Insurance fraud is a significant concern in India, with various schemes targeting policyholders. Understanding these frauds can help in identifying and preventing potential scams.
1. Health Insurance Frauds
Health insurance fraud in India is on the rise, with fraudulent claims accounting for a significant portion of the total claims. These frauds can involve policyholders, healthcare providers, or even insurance agents.
Statistics:
- An estimated 7–15% of health insurance claims in India are fraudulent, leading to losses of approximately ₹900 crore annually.
- Fraudulent practices include inflating medical bills, submitting fake medical records, and colluding with healthcare providers.
Real-Life Example:
In 2024, a group of individuals was arrested in Bengaluru for submitting fake medical claims under the Ayushman Bharat scheme, resulting in a loss of ₹130 crore.
Prevention Tips:
- Verify the authenticity of medical documents.
- Be cautious of unsolicited calls or messages offering health insurance policies.
- Report any suspicious activities to the insurance company.
2. Motor Insurance Frauds
Motor insurance fraud is prevalent in India, involving staged accidents, inflated repair costs, and fake policies.
Statistics:
- In 2019, India incurred a loss of $6.25 billion due to insurance fraud, with 90% attributed to motor insurance.
- Between 2022 and 2023, approximately 80,000 fake vehicle insurance policies were issued across India.
Real-Life Example:
In 2025, a man in Hazaribag was arrested for allegedly murdering his wife to claim ₹15 lakh from her life insurance policy.
Prevention Tips:
- Ensure that repair estimates are reasonable and in line with market rates.
- Be wary of agents offering policies without proper documentation.
- Report any suspicious claims to the insurance company.
3. Life Insurance Frauds
Overview:
Life insurance frauds often involve falsified death claims, policy misrepresentation, and identity theft.
Statistics:
- Life insurance frauds account for 86% of total insurance fraud in India.
- The Indian insurance industry loses approximately ₹3 trillion annually due to various types of fraud incidents.
Real-Life Example:
In 2025, four individuals were arrested in Haveri for orchestrating the murder of a farmer to claim benefits from his life insurance policy.
Prevention Tips:
- Regularly review and update beneficiary details.
- Be cautious of unsolicited offers to switch policies.
- Report any suspicious activities to the insurance company.
4. Insurance Scams Involving Fake Policies
Fraudulent agents sell non-existent or invalid insurance policies to unsuspecting customers, collecting premiums without providing any coverage.
Statistics:
- Between 2022 and 2023, approximately 80,000 fake vehicle insurance policies were issued across India.
Real-Life Example:
In 2025, a man in Hazaribag was arrested for allegedly murdering his wife to claim ₹15 lakh from her life insurance policy.
Prevention Tips:
- Verify the authenticity of the insurance policy with the company.
- Be cautious of agents offering policies without proper documentation.
- Report any suspicious activities to the insurance company.
How does an Insurance Scam Work?
Scammers are getting more creative every year.
Here are the top tricks used in insurance frauds in India—and what you need to look out for:
Fake Accident or Health Claims
Someone fakes hospital bills or claims there was an accident, just to get a big payout from the insurance company.
You see bills from unknown hospitals or sudden claims by people you’ve never heard of.
Forged or Duplicate Policies
Some agents hand over fake policy documents and keep your premium money for themselves.
Your policy doesn’t show up when you check with the official insurance company. Or, the paperwork looks odd, and you don’t get confirmation from the insurer.
Misusing Your Documents
Scammers might use your PAN, Aadhaar, or ID proofs to make false claims or set up bogus policies.
Anyone, especially a new or unknown agent, asking for your ID via WhatsApp, email, or a random phone call.
Phishing Calls or SMS:
You’ll get calls or texts saying your claim is “on hold” or your policy will be canceled unless you pay a fee right away. Any caller or message urgently asking for money, payment of a “fee,” your PIN, or personal info.
How to Spot Insurance Fraud?
Here are quick tips to identify insurance fraud:
1. Only Trust Official Sources
- Buy Policies Safely:
Always purchase your policy through a licensed agent, the insurer’s official website, or a recognized branch office. - Verify Immediately:
Once you receive your policy, double-check its status on the insurance company’s official website or by calling their verified customer care number.
2. Watch for Red Flags
- Pressure Tactics:
Beware if the agent urges you to pay right away or dangles “too good to be true” offers. - Suspicious Document Requests:
Never send your PAN, Aadhaar, or ID proofs over WhatsApp, email, or to anyone you don’t know well. - Urgent Calls or SMS Requests:
Ignore calls/SMS demanding quick payments, claiming your policy will lapse or your claim is stuck. - Odd-Looking Paperwork:
Watch out for policy documents with spelling mistakes, missing company stamps, or errors in your name.
3. What Never to Do
- Don’t Pay in Cash or Unverified Accounts:
Never give cash or transfer money to someone’s personal account—even if promised faster service. - Don’t Share Sensitive Info:
Never share OTPs, PINs, or your card details with anyone. - Don’t Sign Blank Forms:
Never sign any blank documents, no matter how urgent it seems.
4. Smart Steps You Should Always Take
- Double-Check Your Policy:
After purchase, confirm your policy is listed in the insurer’s records. - Read Everything:
Carefully review all policy documents, including the fine print, before signing anything. - Demand Official Receipts:
Make sure payment receipts come from the company itself—not just the agent. - Keep Records:
Save all emails, messages, and receipts for your files. - When in Doubt, Pause and Ask! If something seems off, stop and ask questions. No legitimate insurance company will rush you or object if you want to take time to check details
What to Do If You Suspect or Face Insurance Fraud?
In case you encounter any such fraud, just take a pause and follow the steps below to protect yourself from facing financial distress:
1. Stop All Payments Immediately
Freeze! Pause any further payments or renewals linked to the suspicious policy or agent. Don’t let more of your money slip away.
2. Collect All Evidence
Save all related documents, receipts, emails, SMS/WhatsApp chats, and call records. Screenshots are helpful too—keep everything!
3. Report to the Insurance Company
Contact the insurance company directly through customer care or their official website. Share your policy details and explain what happened.
4. Escalate to the Regulator (IRDAI)
If you don’t get help from your insurer, file a complaint with IRDAI through their online Grievance Portal or helpline (155255 or 1800 4254 732).
5. File a Cyber Crime Complaint
Register at the cyber crime portal and draft your complaint. Attach all the proofs and submit them.
6. File a Police Complaint
For major frauds (big money lost, fake agents, forged documents), visit your nearest police station with all the proof. A First Information Report (FIR) gets the legal process started.
7. Inform Your Bank
Alert your bank if any account information or cheques were misused—they may help block payments or recover funds.
Need Help?
Register with us and get quick help in reporting the complaint and in further escalation if required.
Conclusion
Insurance is meant to protect you, but scams are everywhere—so always double-check offers and documents before you say yes. Stay alert, ask questions, and avoid deals that seem “urgent” or too good to be true.
Share these tips with your family and friends—awareness is your best defense. If something feels off, act fast and report it. Your caution protects both you and others. Stay safe, stay insured!
