Checking digital insurance fraud key to financial inclusion goals

As digital platforms expand coverage across India, cybercriminals are targeting first-time buyers with online scams

More than 68 per cent of life insurance policies were sold online in 2024 — and those digital buyers were 30 per cent more satisfied than traditional customers. As India advances towards its goal of “Insurance for All”, digital platforms play a significant role in expanding insurance across underserved segments. They also make customers vulnerable to cyber fraud. 

As insurers shift from traditional paper-based documentation to digital-first platforms, the way customers discover, purchase and manage insurance is changing. Digitisation is making insurance processes simpler and more streamlined, reducing turnaround times, and enabling policy issuance at the click of a button. This has resulted in a growing need for customers, especially first-time buyers, to better understand the digital environment in which they transact. 

Let us look at the various ways through which insurance fraud is propagated in the digital age and how policyholders can safeguard themselves. 

Cybercriminals use sophisticated digital tactics to steal personal data and even insurance premiums. They usually target people who have little online buying experience and are looking for quick and affordable life insurance coverage. Instances such as lookalike websites, misleading messages, or impersonation attempts are rising in the online space. Fraudsters often pitch heavily discounted plans to unsuspecting buyers, collecting premiums through digital mediums while providing forged policy documents. 

Furthermore, fraudsters use telephone calls to pose as agents, cautioning policyholders that their life insurance policies are about to lapse, only to then steal their digital identities and cheat. Fraudsters also create fake mobile applications that mimic official insurer platforms. Such fake platforms may appear on third-party app stores or are shared via links on social media or WhatsApp. Once downloaded, they prompt users to enter sensitive identity details or even make premium payments. 

In most cases, these criminals make their victims pay through unverified UPI handles rather than official company portals, defrauding them of their money and damaging consumer trust in the insurance industry. 

Recognising the need for more consumer awareness, life insurers are constantly pushing campaigns to educate policyholders about suspicious patterns adopted by cybercriminals. 

These include receiving unsolicited calls or messages offering “guaranteed claims” or “discounted premiums”, followed by persistent requests for responding to links, WhatsApp messages, or unofficial emails. Dubious agents often push incomplete disclosures or workarounds, especially to first-time buyers with too-good-to-be-true policy benefits or instant claim approvals, all in an effort to defraud them or compromise their digital identities. 

 Customers should be more responsible when purchasing insurance online and follow certain practices to ensure they are dealing with official agents or genuine online channels. They should verify agents, apps and websites before transacting, and read policy terms (including specific exclusions) and conditions before clicking any link sent via email. They should engage only through verified life insurance platforms and take a moment to cross-check sources to ensure a safe and trusted experience. This is vital for emerging and rural markets, where limited awareness can sometimes lead to reliance on informal channels.

It is also important for them to be aware that real insurance payments are accepted only through authenticated gateways; transactions are encrypted; and they receive instant text messages or emails for every payment. Many life insurers whitelist official email domains and SMS IDs, label communications with clear warnings like, “We will never ask for your OTP or password” and proactively detect and take down spoofed websites and fake social accounts. 

As digital insurance becomes an integral part of wealth creation and long-term financial planning, staying informed and vigilant is essential. By taking simple precautions, customers can protect what they have worked hard to build, receive true value for money, and strengthen their overall financial security. Awareness not only safeguards individuals but also supports India’s collective journey towards a financially inclusive, digitally empowered future.

The writer is MD & CEO, PNB MetLife