A recent investigation has exposed a multi-state insurance scam worth hundreds of crores, where fraudsters insured terminally ill individuals and even the deceased, manipulating official records to claim payouts. Officials now say the fraud is far more extensive than initially believed, spanning at least 12 states.
One Man, Two Deaths, Two Payouts
Trilok Kumar’s death was recorded twice within six months—once on June 19, 2024, and again on December 27, 2024. Official records from two different government institutions validated both instances, and insurance companies paid out twice.
In June, a cremation receipt from Nigam Bodh Ghat confirmed Kumar’s last rites. However, by December, a death certificate from Delhi’s Govind Ballabh Pant Hospital surfaced, listing cardiopulmonary arrest as the cause of death. The supporting documents, including hospital records and ECG reports, were flawless—bearing authentic seals, stamps, and signatures.
“You can’t admit a man who’s already dead, conduct medical tests, and then hand over his body—all on the same day,” said Anukriti Sharma, ASP Sambhal, one of the lead investigators. “This wasn’t a clerical mistake; it was a sophisticated fraud network siphoning off crores through meticulously fabricated claims.”
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How the Scam Worked
Investigators say fraudsters targeted terminally ill individuals and even recently deceased persons, enrolling them in life insurance schemes using fabricated identities. Some fraudsters posed as financial consultants, convincing desperate families to take out policies under false pretenses, sometimes even paying the premiums themselves. Once the individual passed away, they forged death certificates and other documents to make airtight claims.
In Ghaziabad, for instance, Sauraj passed away in November 2022, but his death certificate was issued two months later in January 2023. In that short window, scammers took out two life insurance policies worth Rs 27 lakh in his name and quickly claimed the payouts.
Insurance and Government Loopholes Exploited
The scam thrived due to lax verification processes in both private insurance firms and government-backed schemes like the Pradhan Mantri Jeevan Jyoti Yojana (PMJJY), which provides Rs 2 lakh insurance coverage for low-income individuals. Unlike private insurers, PMJJY processes claims solely based on a death certificate, with minimal background checks.
“Fraudsters exploited this loophole by purchasing multiple policies, waiting 45 days (the mandatory waiting period), and then forging death certificates to claim payouts,” said ASP Sharma. “They operated with near impunity, using different names and ensuring no thorough nominee verification.”
The Well-Oiled Fraud Network
According to Sambhal SP Krishan Kumar Bishnoi, investigators have arrested 16 people so far, including women. The police have seized:
- 81 bank passbooks linked to fraudulent transactions
- 31 fake death certificates
- 18 forged rubber stamps of banks
- Multiple SIM cards, Aadhaar cards, PAN numbers, and other crucial documents
The probe, which initially covered eight states, has now expanded to 12 states, including UP, Delhi, Jharkhand, Bengal, Assam, MP, Rajasthan, Gujarat, Bihar, Uttarakhand, and Haryana. More arrests are expected as investigators dig deeper into the web of deceit.
Authorities now suspect hospital staff, insurance agents, bank employees, and government officials played a role in facilitating these fraudulent claims. Investigators are combing through thousands of insurance payouts, suspecting that many more fraudulent claims have already been approved.
“This was an industrial-scale deception, executed with alarming ease,” said an officer involved in the probe. “The criminals created such a seamless paper trail that no one ever questioned it.”
With mounting evidence, police are now expanding their inquiry to private and government insurers, hospital staff, and officials who rubber-stamped fraudulent documents. More arrests are imminent as investigators work to unravel the full extent of the scam.