Top 5 tips for preventing cyber fraud in Insurance

From using strong passwords to reading your policy documents carefully, this handy guide can help you avoid becoming a victim of insurance-related cyber fraud

The rate of cybercrime and cyber fraud in India is growing at an alarming rate. In the first two months of 2022 alone, the country recorded more e-frauds than it did during the whole of 2018. The financial sector is particularly vulnerable to such frauds and scams because of the stakes involved — money. Many cybercriminals target innocent individuals and trick them into sharing sensitive banking or investment information.

Anil PM, President – Legal, Compliance and Fraud Prevention Unit, Bajaj Allianz Life Insurance

Life insurance is a hotspot for such cyber fraudsters because of the massive payouts that life insurance policies offer. Here is a handy guide that can help you avoid falling victim to insurance-related cyber frauds.

1.Use strong passwords
Passwords are the first line of defence for the consumer, yet they are one of the easiest targets for cybercriminals to exploit. Suspicious links, malware and keylogging software (a type of malicious software that functions as a spyware tool and records the keystrokes on your computer) can help fraudsters identify your login credentials and gain access to your life insurance account. Even public Wi-Fi networks could pose a security threat.

To prevent yourself from falling victim to this fraud, it is essential to use strong passwords and never share them with anyone. To add an extra layer of security, you must frequently change your passwords and ensure that you never log into sensitive accounts (like your life insurance accounts, bank accounts, or investment accounts) when you are on a public Wi-Fi network.

2.Keep an eye out for phishing and smishing
Phishing and smishing involve a fraudster impersonating a reputed organisation like a bank, an insurance provider, or a government agency and defrauding victims via emails or SMS. For instance, you may have received an email or SMS from ‘your insurer’ asking you to pay a supposedly overdue payment or premium transfer right away in order to keep your policy active. However, if you read carefully, especially the email ids or phone numbers from where these messages originate you would know that they are fake.

Hence, please read the message carefully before clicking on any link shared by anyone via email, SMS, or WhatsApp. Your insurance provider will never ask you to make a premium payment to any random bank account.

3. Beware of beneficiary payout frauds
This kind of insurance fraud can target policyholders as well as non-policyholders. It is a kind of phishing or smishing, where cyber criminals send you apparently authentic messages that encourage you to click a fraudulent link or share your personal/financial information. In the case of beneficiary payout fraud, you may receive a message informing you that you are the beneficiary of a life insurance policy belonging to a distant relative. The message then requires you to pay a nominal fee in order to claim the big payouts.

In the context of such frauds, you need to keep in mind that no life insurance provider will ask the beneficiary to pay any sum in order to claim the insurance payouts. Furthermore, ensure that you are aware of any insurance policies for which your family members may have added you as the beneficiary.

4. Don’t fall for offers that are too good to be true
‘If it’s too good to be true, it probably is.’ – This is quite relevant in the insurance sector. In case you receive any phone calls, text messages or emails informing you of an attractive offer that is exceptionally good, think again. For instance, offers promising outlandish returns . In such cases, it is best to contact the insurance company and check with them directly if they have any such offers going on.

5. Read your policy documents carefully and thoroughly
Cyber criminals victimise many insurance customers primarily because they are not fully aware of what their life insurance policy includes and how it works. Most cyber frauds can be avoided by simply reading the policy documents thoroughly and clarifying any questions directly with the insurance company or your agent.

For instance, if you are confident of the amount and frequency of your premium payments, you may avoid being defrauded into making a supposed premium payment at an unusual time of the year to keep your policy active.

One small step for you, one giant leap for cybersecurity

While cybercrime and financial frauds are punishable by law, you can take several small steps to secure your finances from cyber fraudsters and prevent yourself from falling victim to these crimes. After all, you are the first line of defence for your insurance and other financial accounts.

You must also educate your loved ones about the different scams and frauds possible today, and the measures needed to curb them. In addition to this, it also keeps your savings, investments, and insurance safe from fraud, thus ensuring that you and your family can achieve all your life goals within the timeline planned.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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