In 2017, Swapan Kumar Burman, a resident of Tamluk in West Bengal, received a phone call from a insurance authorized dealer. The message was simple: he was eligible for accrual bonuses from his life insurance policy. Burman’s 2014 policy lapsed after he failed to pay some premiums but the representative said he could claim a bonus on a one-time payment to reinstate the policy. And Burman did what was asked of him. But that was only the beginning of his problems.
Burman said, “The agent asked me to pay a lump sum in order to receive the bonus. I did. After a while, he asked me to pay more, saying I need to buy a new one insurance policy to receive bonuses. ”
Burman quickly found himself in a predicament – withdrawing more money in pursuit of what he had paid so far. “They tricked me into buying multiple policies, until I realized that I had accumulated 64 new policies from 9 insurance companies. These include policies registered in my name, my wife’s, and my son’s, in addition to 12 other policies in my colleagues’ names. I spent Burman says: 42 lakhs of new policies over a four-year period.
When Burman realized he was the victim of a complex scam, he approached Nitin Balchandani of Angels Insurance, who helped him present the matter to insurance companies and insurance inspectors. A few insurers have since paid in full. Others have merged their multiple policies into a single one but said they were able to refund the full amount after just five years. Some cases are still pending. Burma has recovered 22 thousand so far.
Parul Jain (36 years old), an IT professional working with IT company TCS in Hyderabad, faced a similar predicament after she received a phone call regarding her insurance policy. The caller told her about the privileged benefits of 6 thousand for long-term customers. “They told me they wanted the customer to get the benefit, not the agent, that I needed to buy a new policy to get myself listed directly in their database. Therefore, the newly issued policy is from another insurance company. I was smart enough to ask them why a new policy was needed but naive to believe that the two insurance companies were involved in a binding relationship. They convinced me,” Jain said. 3.5 lakh for four policies within a year.
Jain presented the matter to the insurance company and the inspector with the help of Insurance Samadhan, a claims settlement platform. The insurance inspector presented an award in Jain’s favor. She hopes to get her money back soon.
The mis-selling of insurance policies through dubious means is nothing new. However, misselling cases involving lapsed insurance policies suddenly increased. In most cases, dealers scam people by convincing them to buy unnecessary, albeit legitimate, insurance policies by making false claims so they can earn commissions. However, in other cases, they drain the amount paid as a premium into their bank account.
“Of the 80% of complaints we receive about mis-selling in 2021, 20% are related to lapsed policies. This year the ratio is 60:40,” said Shailesh Kumar, co-founder and head of insurance at Insurance Samadhan, which has received more than 730 complaints of policy-related fraud. expired in the past 9 months Balchandani of Angels Insurance said he has received more than 20 cases in the past four months.
Full body failure
The fraudsters seem to have access to all the details of the policyholders, be it addresses, phone numbers and the like. Blame the data leak, which is becoming a major concern.
“We don’t know the source of the data, but the traders know the details of the contract holders. As a result, these traders can gain their trust and have a policy of misselling,” Kumar said.
Some agents find people in insurance companies to help them commit such fraud. “Data leaks can happen with the deliberate consent of senior management or with the appropriateness of employees in the renewal department and the company’s lapse policy,” Balchandani said. insurance.
When Parul Jain filed a claim with her insurance company, the scammer got the hang of it. “She tried to convince me to withdraw the complaint, which I obviously didn’t.”
Blame the victim
Often, policyholders who suffer losses do not receive help from the insurance company. Then, blame the policyholder for any fraud until the aggrieved person takes the claim to the next level. While customers may be at fault, that doesn’t save insurers from their inefficiencies at detecting fraud. “The income of the Burmese is 11 lakh when he was sold policies worth more than what he was eligible for, at the time. It makes sense to ask why would an insurance company issue so many policies to him when they already have his data in the database? “, Balchandani said.
Please note that insurance fraud is not a criminal offense in India. “Until the moment the scammers and employees involved are not named and shamed and criminal cases are not filed, such practices will not stop,” Balchandani said. .
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