Meenal is a middle-aged housewife who always found it convenient to leave the financial management and decision-making to her husband. The ignorance that she maintained about her family’s finances came with a high price once her husband dies due to COVID. She got a call from one of the insurance salesman who offered her a free personal loan with a minimum interest rate. She was informed that the loan would be tied to a life insurance policy and will be disbursed once the policy has been taken. She agreed to this but once the policy was issued she found out that there is no loan that is being processed and she has been a victim of life insurance fraud. Now she is wondering how can she report life insurance fraud and what are the options left to her.
Life insurance frauds cases have always been there but the cases increased a lot during the pandemic. Many people during this time received calls and emails which led them to fall into the traps of fraudsters. Well, before we discuss further, let us first discuss the meaning of life insurance.
What is Life Insurance?
Life insurance is basically a contract between an insurer and an insured. The insured has to pay premium amounts on against which the insurer promises to provide coverage and benefits to the insured upon his/her death or after a certain period.
2 Most Common Online Life Insurance Frauds
While you are trying to buy a life insurance policy online, you may come across some frauds. Here are the most common ones mentioned below:
1. Interest-free loan linked to insurance
As you look for a loan online, you may find fraudsters who pose as bank professionals or insurance company representatives who are offering minimum interest loans or completely interest-free loans. They offer the loan easily without any hassle; however, on a condition to purchase an insurance policy. Once all the documentation is done and after the verification call, you will be issued a policy which they will tell you has been used for sanctioning the loan. You will later find out that the insurance company is not at all connected to the fake promise of offering you the loan.
2. Fake websites and hoax emails
One of the most common life insurance scams is fake websites. You might come across social media advertisements as well as websites that have misspelt links. If you try to sign up, you would be asked to link your credit or debit cards. They will also promise of offering gold coins if you buy a policy and you will not even be required to undergo a health check-up. If you come across any such thing, you must understand that this is nothing but a scam. A similar fraud that is equally common is a hoax email that will point out loopholes in your policies. Such emails can also mention policy lapse because of non-payment of premiums, state that anybody can be the beneficiary of your life insurance policy, and you will get a bonus on an old policy. If you see any links in such emails, you should never click on them.
3 Important Tips to avoid life insurance policy online
As you intend to purchase a life insurance policy online, you must be careful. And here are some of the tips that might be helpful for you in life insurance fraud detection.
1. Verifying the identity of the insurance agents
As per the stringent standards of IRDA, agents who work on behalf of insurance companies, have to undergo rigorous training as well as they need to obtain identification proof. Therefore, on being approached by a representative, you must ask for their identification, jot down all the details related to them, and then contact the customer care service of the particular insurance company to verify the identity of the representative.
2. Not to tell policy details to any stranger
You might receive a call from a conman posing as a representative of an insurance company and asking for details of your policy. You need to make sure not to give any kind of information about your life insurance policy to a person, no matter what.
3. Report immediately on losing policy documents
You can make copies of your life insurance policy documents and keep the original one very carefully. If you anyway lose them, you must notify the insurance fraud investigator.
What to do if you have been a victim?
Unfortunately, you may already be a victim of insurance fraud and might be wondering about how to report life insurance fraud. If you suspect yourself to be a victim of insurance fraud you need to check the policy documents carefully to validate it.
Once you have confirmed that a fraud has been committed you must contact your insurer and inform them of the same. The matter can also be escalated to the insurance ombudsman who can address matters such as insurance mis-selling and fraud.
You can also get expert opinions from services such as Insurance Samadhaan to make an informed decision.