Bima Lokpal Scam: How Fraudsters Target Lapsed Life Insurance Policies

The Bima Lokpal scam is a growing threat for life insurance policyholders. Fraudsters claim that the government or “Bima Lokpal” is returning unclaimed insurance money, promising large payouts for old or lapsed policies. These calls may appear convincing, but they are completely false.

How the Bima Lokpal Scam Works

Scammers often have access to your old policy information, such as the insurer’s name, purchase year, and premium amount. They use these details to appear credible and create a sense of trust.

In a typical scam scenario:

• A caller claims that your lapsed policy premium has grown significantly, often exaggerating returns.
• They insist that you must buy a new insurance policy for the alleged refund to be processed.
• They promise that the money will be transferred to the new policy and refunded within a short period, such as 30 days.

These tactics are designed to create urgency and trick policyholders into making payments or sharing sensitive information.

Red Flags to Watch Out For

• Any unsolicited call claiming to be from a government body or Bima Lokpal.
• Requests to purchase a new policy to unlock the refund.
• Exaggerated promises of large returns on your original premium.
• Pressure to share personal information, OTPs, or bank details.

No government organisation or regulator, including Bima Lokpal, calls policyholders to return money or asks for payments to release funds. Any such claims are fraudulent.

Understanding Lapsed Policies

Many fall for this scam because they do not understand how lapsed policies work:

• In traditional life insurance policies, if a plan lapses before earning a surrender value, the premium paid is usually forfeited.
• In Unit Linked Insurance Plans (ULIPs), the fund value is moved to a discontinuation account, withdrawable only after five years and after deducting charges.

At no point does ₹50,000 magically grow to ₹5 lakh, as scammers often claim.

How to Protect Yourself

The safest approach is to directly contact your insurance company via official channels. Verify your policy status online or through customer care. Never rely on third-party calls or intermediaries. Avoid sharing OTPs, documents, or making payments for promised refunds.

Read more: SBI Warns Customers Against AI-Powered Deepfake Scams: What You Need to Know.

Conclusion

The Bima Lokpal scam exploits policyholders’ trust and old policy details to commit fraud. Vigilance and verification are the only ways to stay safe. Always confirm any lapsed policy details with your insurer and ignore calls promising quick refunds or guaranteed windfalls.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing.