Purchasing insurance online is often perceived as a quick and efficient method; however, a significant percentage of users in India report encountering serious challenges. A nationwide survey has indicated that over 80% of users faced complications such as unexpected charges, difficulties in policy cancellation, mandatory data sharing, and misleading pricing when using online insurance platforms.

The study, conducted by LocalCircles in March 2026, received more than 87,000 responses from participants across 341 districts and emphasizes the increasing prevalence of “dark patterns” in insurance applications and websites.

Understanding Dark Patterns

Dark patterns are design and sales strategies employed by applications and websites to manipulate user behavior without clear consent. The survey identified five prominent types of dark patterns affecting users in the insurance sector. These tactics are not unique to insurance; they are frequently observed across various platforms such as e-commerce, travel booking, and subscription services, where companies may urge users toward faster or higher-value purchases, often at the expense of transparency.

Challenges in Policy Cancellation

A major concern among users is the difficulty of canceling policies after purchase. Approximately 80% reported challenges in canceling their insurance policies, citing obscure cancellation options or requiring multiple steps before achieving a successful cancellation. This issue seems to have escalated over the past two years, rising from 61% to 80%. As a result, many users find themselves locked into unwanted policies.

Persistent Marketing Pressure

Another significant issue highlighted in the survey is the incessant pressure to purchase or maintain policies. About 90% of users indicated that they faced repeated solicitations through phone calls, messages, pop-ups, or reminders. Nearly 70% stated that these prompts were exceedingly frequent, making it challenging for them to disengage, even after expressing disinterest or attempting to cancel.

Concerns Regarding Data Privacy

Concerns about data privacy have also surfaced, with about 85% of users reporting mandatory sharing of personal information simply to view policy options. This often results in increased spam communications or potential misuse of personal data. This percentage has notably increased from 57% to 85% in recent times, prompting significant privacy concerns among consumers.

Misleading Pricing Practices

Pricing concerns are another critical issue where users feel misled. Approximately 82% of respondents indicated that they were initially presented with attractive low prices; however, the final cost of policies or renewals ended up being significantly higher. This leads many users to base their decisions on incomplete or inaccurately presented price information.

Hidden Charges During Transactions

Many users encountered additional charges that were not disclosed upfront. About 65% reported encountering hidden fees that appeared later in the purchase, renewal, or even claims processes. This complicates users’ understanding of the actual costs associated with their policies.

Widespread Issues Across Platforms

The findings indicate that these practices are prevalent across numerous insurance platforms, with most applying between two to four dark patterns simultaneously. This situation suggests that users may unknowingly face multiple issues during a single transaction.

User Experiences Highlight the Impact

The survey also collected firsthand accounts from users. Some reported paying premiums but receiving their policy documents weeks later, while others discovered that their policy details were altered post-purchase. Numerous users continued to receive calls even after requesting that platforms cease contact, illustrating the tangible impact of dark patterns on real users.

Regulatory Concerns and Responses

This situation has drawn the attention of regulators, with Finance Minister Nirmala Sitharaman categorizing the mis-selling of financial products as an offense and urging banks to desist from unnecessary insurance promotions. Concurrently, the Reserve Bank of India has proposed stricter regulations, including mandates for refunds in cases of mis-sold products. Despite these measures, the survey suggests that these problematic practices persist across insurance platforms.

Long or Short, get news the way you like. No ads. No redirections. Download Newspin and Stay Alert, The CSR Journal Mobile app, for fast, crisp, clean updates!

App Store –  https://apps.apple.com/in/app/newspin/id6746449540 

Google Play Store – https://play.google.com/store/apps/details?id=com.inventifweb.newspin&pcampaignid=web_share