55-Year-Old Woman Fakes Death Twice for Rs 1.1 Crore Insurance Scam: A Shocking Case of Insurance Fraud

A 55-year-old woman from Mumbai’s Bhayander has shocked the nation by allegedly faking her death not once, but twice in a span of two years. The reason behind this elaborate scheme? To claim insurance worth a staggering Rs 1.1 crore, of which Rs 70 lakh had already been paid out to her family. The woman, identified as Kanchan Pai, also known as Pavitra, managed to deceive four insurance companies in a well-orchestrated plan that involved submitting fake death and cremation certificates.

The fraud came to light when one of the insurers noticed discrepancies while processing an additional claim of Rs 41 lakh, prompting an internal investigation. It was revealed that between 2021 and 2023, the family had successfully received payouts from multiple insurance companies based on the false claims. The first reported fake death occurred on October 11, 2021, with Kanchan’s son submitting documents that led to a payout of Rs 20.4 lakh. Another insurer settled a claim of Rs 25 lakh for the same ‘death’. The second fake death was recorded on October 20, 2023, under the name Pavitra, with the husband receiving Rs 24.2 lakh.

This shocking case is not an isolated incident. Last year, a man with insurance policies worth Rs 7.4 crore faked his death in a car accident to claim the money. These cases highlight the lengths to which individuals will go for financial gain, even resorting to extreme measures like faking their own deaths.

Vineet Mehta, Partner at EY Forensic and Integrity Services, pointed out that the absence of a reliable identification system and the lack of biometric authentication during hospital admissions have facilitated such fraudulent activities. Insurance fraud is a serious issue that not only affects the insurance companies but also honest policyholders who end up paying higher premiums due to fraudulent claims.

Insurance fraud is not limited to India. In the US, scammers cost non-health insurers upwards of $40 billion a year, while in the UK, insurers uncovered 107,000 fraudulent claims worth almost $1.3 billion in 2019. The most costly category of insurance fraud is health care insurance fraud, followed by Life insurance fraud and property and casualty insurance fraud.

To prevent insurance fraud, experts recommend implementing measures such as mandating Life insurance policy declarations on death certificates to alert medical professionals and establishing a centralised claims database across insurance companies. By detecting and preventing fraud, insurers can reduce the incurred claim ratio and overall insurance premiums, saving resources and time while enhancing reinsurers’ confidence in partnering with insurance firms.