Over 8 in 10 users report dark patterns on online insurance platforms; IRDAI faces pressure to act

India’s online insurance ecosystem is under spotlight after a large-scale consumer study found that dark patterns across digital insurance platforms remain widespread—and, in several cases, have worsened over the past two years.

Widespread manipulation, getting worse

According to a March 2026 LocalCircles report based on over 87,000 responses across 341 districts, 80% of users who purchased insurance online said they experienced a “subscription trap”, where cancelling a policy became difficult after purchase.

The figure has risen sharply from 61% in 2024, indicating that consumer-facing manipulation has intensified rather than eased.

The study also found that 90% of users experienced persistent “nagging”—repeated prompts or pressure while seeking a quote or trying to cancel a policy—up from 86% two years ago.

Similarly, 85% reported “forced action”, where platforms sought unnecessary personal details to generate quotes and then used that data for unsolicited outreach or misuse. This has surged from 57% in 2024.

Pricing opacity and hidden charges

On pricing, 82% of respondents said they encountered “bait and switch” tactics, where low premiums were advertised but final policy terms differed significantly.

Another 65% reported drip pricing or hidden charges, where fees linked to purchase, renewal or claims were not disclosed upfront.

Together, the findings point to systemic opacity in how insurance products are being sold online.

Major platforms flagged

LocalCircles’ audit, based on consumer complaints and internal detection tools, found two to four dark patterns each across major platforms including Policybazaar, Acko, ICICI Lombard, Tata AIG, Bajaj Allianz, HDFC Ergo, Star Health, Go Digit, Coverfox and InsuranceDekho, among others.

The most common issue identified was interface interference, present in over 70% of platforms, followed by forced action, bait and switch, and subscription traps.

Real-world cases raise red flags

The report also documents specific user complaints that go beyond interface design.

These include cases where users allegedly paid premiums but did not receive policy documents, renewal terms changed after payment, or coverage values were altered without clear communication.

In one instance cited, a user claimed to have paid Go Digit for a policy in November 2025 but had not received the document even by late January 2026. In another, a Star Health policy renewal reportedly showed lower coverage and a different premium in the final document than what was paid.

Regulatory push, IRDAI under pressure

The findings come amid a broader regulatory push against mis-selling in financial services.

Finance Minister Nirmala Sitharaman has flagged aggressive cross-selling of insurance, while the Reserve Bank of India (RBI) has proposed draft norms mandating refunds and compensation in cases of mis-selling. The Central Consumer Protection Authority has already classified 13 dark patterns as unfair trade practices.

The RBI has also moved to act on dark patterns, mandating that banks eliminate such practices on their digital platforms by July 2026.

However, no equivalent directive has yet been issued for insurance platforms.

In a March 18 letter to the Insurance Regulatory and Development Authority of India (IRDAI), LocalCircles has formally urged the regulator to mandate that all insurance aggregators and companies eliminate dark patterns from their apps and websites.

The letter, addressed to IRDAI Chairman Ajay Seth and copied to key ministries, flagged the continued prevalence of practices such as nagging, forced action, bait and switch and privacy manipulation across platforms, and called for mandatory compliance declarations.