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​As the majority of people are showing keen interest in buying health insurance following COVID-19 impact, the Insurance Regulatory and Development Authority of India warns the policyholders to stay aware of the fake insurance providers while buying or renewing insurance policy online. But before knowing further about it, first know how exactly insurance works. 

How does insurance work?

The insured and insurer get a legal contract for the insurance, which is known as an insurance policy. The insurance policy has information about the conditions and circumstances under which the insurance company will give insurance amount to either the insured person or the nominees. 

Insurance is a way to protect yourself and your family from a financial loss. Usually, the premium of a big insurance cover is much lesser in terms of money paid. The insurance company takes this risk of delivering a high cover for a small premium because only a few insured people actually end up claiming the insurance. This is the reason why you get insurance for a big amount at a low price. 

Furthermore, if you buy an insurance policy, then you have to renew it also. For instance, if you have a two wheeler insurance policy, then you have to do renew bike insurance for enjoying the benefit without any hassle. 

IRDAI’s Warning Note For Public

The IRDAI has released a warning note to the public to be aware of fake insurance offers while buying or renewing insurance online. 

On April 20, 2020, the Insurance Regulatory and Development Authority of India has released a notification on its official site regarding the prevention of cyber fraud. This notification was issued to spread awareness among the general public about the fraudsters who give insurance at low entities via digital mode or online. It further suggested not to get influenced by such offers. As the majority of people are purchasing insurance online followed by lockdown due to the quick spread of coronavirus, fraudsters are making a clear way for frauds online. Due to the on-going pandemic, more people are showing keen interest in buying health insurance. Thus, the IRDAI has asked customers to buy insurance only from registered companies. 

Buy Insurance Policies From Registered Companies

IRDAI advised customers to make sure that they are purchasing insurance policies only from the following entities:

  • ​Insurance intermediaries who can solicit business and are registered with IRDAI
  • Insurance companies registered with IRDAI
  • Insurance agents properly appointed by the Insurance Companies.

  • IRDAI suggested its customers buy insurance like motor insurance only from the intermediaries and insurers registered with IRDAI. Customers can verify the insurance agents approved by the individual insurers from their respective insurance companies. IRDAI has asked its customers to take due care in verifying the functionality of the website and work of the insurer, agent, and intermediary before buying any premium online.  

    Currently, people are renewing expired policies and buying insurance policies online amidst of the coronavirus lockdown. Though IRDAI has extended the renewal dates for third party health and motor insurance, renewing your insurance policy on time is suggested. New policy buyers who do not know much about premiums and buying insurance online and existing policyholders who do not know how to renew their policy should be extra careful while making payments.