Experts warn against scammers impersonating companies and industry regulator to trick policyholders into paying fake processing fees
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Scam(Photo: shutterstock)
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The person calling you says that an insurance policy you forgot about has grown into a sizeable amount of money and you need to complete a “small process” to get it. It is a scam and it is spreading fast.
No organisation calls individual policyholders to offer unclaimed insurance money. Insurance ombudsman Bima Lokpal’s role is limited to resolving disputes between insurers and customers who approach it voluntarily. It does not track old policies; it does not calculate payouts, and it does not promise refunds over unsolicited phone calls certainly.
Any call claiming to be from a government-linked insurance office offering money back should be treated as fraudulent.
Why these calls sound convincing
Fraudsters often appear well prepared. They may know:
- Your full name
- The insurer you bought a policy from
- The year the policy started
- The premium amount
This information, which may have been sourced from old databases or data leaks, makes the pitch sound authentic. Callers also speak confidently and use official-sounding terms to build trust.
Another common tactic is urgency. You may be told the refund window is closing or that action is needed within days. The aim is to prevent you from verifying the claim independently.
Pressure is not a coincidence. It is a warning sign.
The biggest red flag to watch for
There is no legitimate insurance process where you must buy a new policy to recover money from an old one.
Any request to purchase a fresh policy, pay a “processing fee” or transfer funds to unlock a refund is a clear indicator of fraud. Once money is paid, the caller typically disappears, and the promised refund never materialises.
How lapsed insurance policies actually work
The reality is far less dramatic than what these callers promise.
Traditional policies such as endowment or money-back plans may forfeit premiums if they lapse early and do not acquire surrender value. In such cases, there is nothing to refund.
Unit-linked plans do not lose their fund value on lapse. The amount moves to a discontinuation fund and can be withdrawn after five years, subject to charges.
In neither scenario does a small premium automatically turn into a large windfall.
What to do instead
If you are unsure about an old policy, contact the insurance company directly using official contact details from its website. Ask for the policy status and whether any amount is payable.
Avoid unsolicited calls. Do not share documents, OTPs or bank details. And do not make payments based on verbal assurances.
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