Insurance Scams in India: Red Flags You Must Know Before Buying

The insurance industry in India is expanding rapidly, however bed unfortunately, insurance fraud is expanding even faster. While legitimate companies provide invaluable protection, there are many well-meaning people are losing out to unauthorised agents, scam calls and fraudulent schemes.

Regardless of whether you are purchasing life, health or motor insurance; being aware of the risks is equally as important as safely securing your intended policy. Here at My Insurance Dost, we believe an informed customer is a protected customer. This blog will provide you what to look for and help you make sound decisions when purchasing insurance.

Why Are Insurance Scams Increasing?

Insurance scams are becoming increasingly prevalent in India, for any number of reasons:

Many first-time buyers do not fully understand how insurance works

Scammers reach out to people’s WhatsApp, social media, and through spam calls

People fall victim to “too good to be true“ offers promising enormous returns and discounts

Scammers use the names of trusted companies and brands – LIC, Star Health, HDFC Ergo etc.

7 Common Insurance Scams in India and How to Avoid Them

Bonus or Refund Scam Calls

You receive a call stating “You have a bonus of ₹85,000 on your old policy — pay ₹5,000 to release it.”

This is typical of a scam. No legitimate insurance company requests money from you to release any bonus or maturity amount.

What do you do: Hang up, document everything, and contact the company’s official customer care directly.

Policies Issued Without Consent

There are individuals who realise a policy has been issued in their name without signing any documentation. These are usually no more than fraud policies that have been created using personal data that have been taken overt illegitimately.

What do you do: Always check your policies linked to your PAN prior to the IRDAI portal. Do not ignore policy updates you do not expect.

Fake Agents Selling Policies That Do Not Exist

Scams that are perpetrated by faking to be agents and selling a product that does not exist. These scammers have fake sites, usage of company logos, and even fake email accounts that look like the legitimate ones.

What do you do: Ask the agent for his IRDAI license number, and verify it on the official IRDAI website.

Policy Conversion Pressure

Some agents may forcefully assert that your existing policy is either invalid or no longer valid and convince you that you should convert to a new one now, as time is of the essence or fear may dictate that you must act without thinking.

What to do: Always confirm details with the formal insurer. Don’t convert or cancel your policy because of a phone call.

Unreal or Too-good to be True Offers on Social Media, What’s App, or Other Remote Purchase Offers

You may see messages along the lines of, “Get even ₹ 1 crore life cover at ₹ 300/month” or “Get 50% health insurance discount today only.” A scam is most like when it is stated as “free”—these consist mostly of scams created to collect your payment details.

What to do: Always buy insurance through verified platforms such as My Insurance Dost. Never click on links that seem suspicious.

OTP and Aadhar Misuse

Scammers ask for your OTP or Aadhar number to “verify“ your identity or to make a payment. The real end goal is to get you to provide them with your details so they can commit the fraud.

What to do: Neve share OTPs or a personal document over the phone. Insurance companies will never ask for sensitive information through calls or text messages.

Bogus Customer Support Numbers on Google

When you are searching for customer care numbers on the internet, you may find that scammers have created fake listings with phony numbers. You might end up connecting with someone who claims to be an agent and may expect payment in order to resolve fictitious issues.

What to do: Always go to the insurance company‘s official website. Do not trust a phone number that comes through a Google search unless you can verify the source.

How to Buy Insurance Safely

Purchasing insurance is now easier than ever, but it’s important to buy with safety and smartness in mind. Here’s how you can protect yourself:

Buy only from experienced agents or platforms accredited by IRDAI.

Make sure to always check before you proceed with an agent to see that they have their license before proceeding.

Make payment through official payment links or websites.

Do not ever rush into a decision, especially when you are under pressure.

Do not forget to read your policy documents well before making a payment.

Why Trust My Insurance Dost?

At My Insurance Dost, we do not just sell you insurance —we sell you the buying experience with clarity and confidence. All agents and vendors are IRDAI-registered and verified. We do not just provide quotes but guide you personally and even answer your questions and provide assistance after the sale of the policy. As well as, you can expect:

Transparent premium breakdown

Real-time customer support

Genuine plans from reputable companies

Guidance when you make a purchase and at the time of claims

Final Words

The scams do exist in the insurance industry, but also the awareness to help you avoid scams. When you recognize red flags, and know what to look for, you are less likely to fall for scams. Don‘t let the fraudsters steal your money, time, or peace of mind.

And when you’re unsure, take a step back and talk to someone you trust. And when your ready to move forward and purchase, My Insurance Dost will be right there — to help you, not to mislead you.