The Growing Threat of Cybercrime
In the last few years, India has seen a dramatic spike in cybercrimes targeting ordinary users. From phishing links disguised as delivery updates to fake investment apps promising impossible returns, fraudsters are getting sharper, faster, and more convincing. UPI transactions, which have transformed how Indians pay, are also being exploited through social engineering, cloned apps, and scam calls.
According to data from the Ministry of Home Affairs, thousands of cyber fraud complaints are filed daily across the country. While banks and payment platforms have introduced liability and refund policies, many victims still end up losing significant sums — not to mention personal data and emotional peace. This is where cyber insurance claims to fill the gap.
What Cyber Insurance Actually Covers
A personal cyber insurance policy is designed to protect you from financial losses due to online scams and digital frauds. It typically covers phishing, UPI and card fraud, SIM swap cases, identity theft, cyber extortion, reputational damage, and even harassment through social media.
For instance, if someone hacks your account or tricks you into transferring money, a cyber insurance policy may reimburse part of the loss, depending on the terms. Premiums are surprisingly low — often between ₹500 and ₹1,000 per year for coverage up to ₹1 lakh. Some policies also offer higher coverage options, extending to ₹10 lakh or more, which makes them an appealing choice for frequent digital users.
In an era when your phone doubles as your wallet, this protection can bring much-needed peace of mind.
The Fine Print and the Frustration
However, like most insurance products, cyber insurance comes with its share of caveats. Many policies exclude losses that occur if you willingly shared your OTP or password, even if it was under duress or due to a convincing scam. Insurers often categorize such actions as negligence, leading to rejected claims.
Another challenge is the paperwork. Most insurers require you to file a police complaint or an FIR before processing the claim. This can delay settlements and discourage victims from pursuing compensation. Some users also report long verification processes, especially when the fraud occurred on cross-border payment platforms or lesser-known apps.
In short, while the promise of protection is real, the ease of claiming it can vary widely between providers.
Who Should Consider Buying Cyber Insurance
If your financial life runs online — whether it is shopping, paying bills, investing, or managing your family’s accounts — then cyber insurance could be a practical safety net. Frequent users of UPI, credit cards, and online trading apps are especially vulnerable to fraud, making such policies a smart addition to their digital protection toolkit.
For those who rarely make online payments or who are extremely cautious with digital transactions, the risk might not justify the cost. In such cases, relying on a bank’s existing fraud liability policy could suffice, provided the user acts quickly after detecting any unauthorized transaction.
Why Awareness Is Still Key
Cyber insurance may help, but it is not a substitute for digital vigilance. Scammers are becoming increasingly sophisticated, often preying on emotions like trust, urgency, and fear. The first line of defence is always awareness — checking links before clicking, not sharing sensitive information, and using two-factor authentication wherever possible.
Ultimately, cyber insurance is less about expecting fraud and more about preparing for the unexpected. It is like buying health insurance — you hope you never need it, but when disaster strikes, it can save you from major losses.
As India’s digital economy grows and more citizens embrace cashless payments, the question is not whether you could be targeted, but when.
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