Anil PM, Head - Legal and Compliance, Bajaj Allianz Life

25 Feb 2022 , 06:19 PM

In an interaction with Mamta Maity, indiainfoline.com, Mr. Anil PM, Head – Legal and Compliance, Bajaj Allianz Life said “One needs to exercise awareness and ensure that they read the terms and conditions including premium amount, policy term, payment tenure and returns as per the benefit illustration before signing the documents.”

What are the kind of frauds witnessed in the life insurance industry?

There are different kinds of frauds that customers should beware of while exploring or buying life insurance products. These can be broadly categorised as online or offline frauds.

One of the most common form of frauds is spurious/fake calls from third parties, offering unrealistic benefits to customers on new or existing policies. Similarly, there are OTP frauds, where innocent customers are asked to share OTP for online policy issuance or payment of processing fees, thereby scamming them with fraudulent banking transactions.

The other kind of frauds include mis-selling, where insurance agents misrepresent the benefits or facts of an insurance policy to the customers, such as promise of higher returns, not disclosing key terms & conditions, etc. In some cases, fraudsters may even pose as representatives from life insurance companies or IRDAI, and lure innocent consumers with promises of “bonus” or refund of “fund value” under a lapsed or terminated policy. Additionally, they can even use fake websites and circulate them through SMS, social media, emails, etc. to scam customers. For instance, websites with “http” instead of “https” in the URL are less secure and any sensitive information entered on such websites can be captured and used unethically.

Do you think during the pandemic there has been an increase in insurance frauds? Is there any difference in the kind of insurance frauds before and during the COVID-19 pandemic?

Since the onset of COVID-19 pandemic, the use of digital platforms has increased significantly. Customers have started using online tools for most of their policy-related needs. This has also led to a surge in rising incidences of fraud, including impersonation, falsifying documents for making fraudulent death claims, spurious calls, non-disclosure of material medical history, etc.

What are the kind of online and offline frauds a customer must be aware of? Also, how can one avoid falling prey to such frauds?

Customers should be cautious of spurious callings, mis-selling, OTP frauds and cyber spoofing. They must avoid sharing sensitive personal information such as bank card details, OTP or KYC documents with unauthorized third parties.

One needs to exercise awareness and ensure that they read the terms and conditions including premium amount, policy term, payment tenure and returns as per the benefit illustration before signing the documents. Customers can also cancel the insurance policy within 15 days of receipt of Policy Bond in case of any disparity.

What should customers do if they lose money to a certain fraud? What should be the step for remedy after that? 

Any type of insurance fraud is a criminal offence and should be reported immediately. The victim must file an FIR with the police and inform the insurance company at the earliest. The latter can cooperate and assist the customer in retrieving the lost money in the best possible manner.

Some Do’s and Don’ts customers must keep in mind while purchasing a policy.

The below tips can help customers to avoid falling prey to insurance fraud.

– Beware of Spurious call

Never entertain callers who pose themselves as agents/employees of an insurance company or employee of IRDAI and promise bonuses or refund of policy amounts, for a fee.

– Verify the authenticity of sales representative

Ask the insurance agent you are interacting with for their ID proof to make sure they are authorised sales representatives of a company. Avoid transacting with any agent/advisor who is unable to furnish their license details.

– Know your plan before buying

Familiarise yourself with the details of the insurance plan you plan to buy, so you don’t end up buying a policy that does not meet your requirements. Also, ensure that you buy from the insurer’s website, an authorised aggregator, or an authorised agent only.

– Provide accurate and complete information

If you’re buying from an agent, insist on completing the proposal forms yourself. In case the agent fills up the form for you, make sure you validate all the information before signing the form.

– Avoid paying in cash

Owing to the possibility of un—authorized agents / representatives pocketing the premium themselves, most life insurers now prefer premium to be paid via digital transactions. If you are paying via cheque, ensure that it is in the name of the insurer – and not the broking firm or the individual agent.

– Safeguard your personal/policy details

Be wary of whom you share your personal or policy details with. Before you give out any information, verify the credentials of the person asking the details.

– Never share OTP to third parties

OTP (One-Time Password) is the new age signature of customers towards agreement on terms and conditions of the policy. Hence, never share the OTP with third parties.