Insurance Fraud: The Rise Of False Claims And Fake Deaths

Insurance fraud is an intentional deceit conducted against or by an insurance business or agent for financial advantage. Applicants, policyholders, third-party claimants, or professionals that offer services to claimants may all conduct fraud at various times. Insurance fraud can also be committed by insurance brokers and corporate personnel. Inflating claims, lying on an insurance application, filing claims for damage or injuries that never happened, and staging accidents are all examples of common fraud.

Fraudulent insurance claimants include:

  • Organized thieves who commit large-scale financial crimes using false business practices,
  • Experts and technicians that charge for services that aren’t provided or exaggerate service rates, and Those in the general public who want to pay their deductible or see making a claim as a chance to make a little money.

Policyholders may typically engage in the following types of fraud related to claims:

  1. Concealing a pre-existing condition: most individual health insurance offers a defined waiting period for a pre-existing condition/disease. The policyholder hides this information by fabricating the pre-policy health checkup report.
  2. Fabricated paperwork to satisfy insurance policy requirements: Young and healthy people are an insurance company’s apparent option. Any individual with a distinct characteristic, such as an older person, may not necessarily have their application denied but may instead pay higher rates. In this situation, people strive to hide their aging or chronic illnesses. This also includes pretending to be disabled.
  3. False or inflated bills submitted for exchange: Submitting false or inflated bills constitutes fraud, especially when no expenditures have been made. This defeats the purpose of health insurance, which is to pay for medical costs incurred when one has a condition or needs surgery. It is not intended for an insurance policy to be lucrative.
  4. Withholding information about numerous policies: It is the insured’s duty to tell all other insurers about the current policies, whether they are group or individual, in order to prevent the filing of multiple claims for the same issue and the resulting profit.
  5. Engaging in fraud rings: A person may work together to submit a fake claim with a provider, such as a doctor or agent, by altering information under their direction.

Insurance Fraud In India

Any action taken to manipulate the insurance system is referred to as insurance fraud. When a claimant tries to receive a benefit or advantage they are not entitled to or when an insurer willfully withholds a benefit that is owed, this happens.

Insurance fraud is described as “the act of making a statement known to be false and used to compel another party to issue a contract or pay a claim” by the Federation of Indian Chambers of Commerce & Industry. This behavior is prohibited if it is done with malice aforethought, for financial gain, and under false pretenses.

The Indian Insurance Act’s lack of a definition of “insurance fraud” is cause for worry. The International Association of Insurance Supervisors (IAIS) defines fraud as “an act or omission designed to achieve dishonest or unlawful benefit for a person perpetrating the fraud or for other linked parties,” according to a definition published by IRDA recently. Other instruments within the Indian legal system, such as the Indian Criminal Code (IPC) or Indian Contract Act, similarly do not give particular laws. Nevertheless, none of them are primarily focused on insurance fraud and are insufficient to serve as an effective deterrent. Parts of the IPC that deal with concerns of fraudulent acts, forgery, deceit, etc. are occasionally utilized.

Fraud is a crime because it is done under false pretences, with the intent to defraud, and for financial benefit. An intentional loss, such as the theft of a car or the setting on fire of goods covered by an insurance policy, is considered a hard fraud. Soft scams are more prevalent and include policyholders exaggerating valid claims. They are also known as opportunistic con artists. The International Association of Insurance Supervisors (IAIS) defines fraud as “an act or omission intended to gain dishonest or unlawful advantage for a party committing the fraud or for other related parties,” and the Insurance Regulatory and Development Authority (IRDA) has adopted this definition on numerous occasions.


In conclusion, insurance fraud is a serious problem that affects not only insurance companies but also individuals and society as a whole. Insurance fraud can take many forms, from faking an accident to submitting false claims. It is a costly and illegal activity that can lead to increased insurance premiums, decreased trust in the insurance industry, and even criminal charges for those who commit it.

To combat insurance fraud, insurance companies and law enforcement agencies must work together to identify and prosecute those who engage in fraudulent activities. Education and awareness campaigns can also help to prevent insurance fraud by informing people about the consequences of their actions.

In addition, individuals can take steps to protect themselves from becoming victims of insurance fraud. This includes being cautious of unsolicited offers for insurance and carefully reviewing insurance policies and claims before signing or submitting them.

Overall, insurance fraud is a problem that requires cooperation and diligence from all parties involved to effectively prevent and mitigate its impact.

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