Buying an insurance plan remains one of the toughest financial chores. From calculating how much cover you need to decoding policy features, the homework is already heavy. Now imagine a portal flashing three extra add-ons with a “skip and you miss a once-in-a-lifetime opportunity” pitch. Fatigue meets FOMO—and you click “add”.
This is a classic dark pattern: a design-led nudge that pushes you to buy more than you intended. The insurance regulator has now sounded a warning.
Dark patterns are subtle, design-based digital “nudges” built to manipulate consumer choices and inflate premiums. While common in e-commerce, they have increasingly embedded themselves in insurance journeys.
Recognising the growing threat to consumer trust, the Insurance Regulatory and Development Authority of India (Irdai) issued guidelines on 2 April, 2026. Insurers and e-platforms have been directed to comply with the Central Consumer Protection Authority (CCPA) guidelines on dark patterns issued in 2023. Entities have 15 days to self-assess and one month to submit a “clean-up” action plan.
Choice by design
The rise of dark patterns is closely tied to insurance going digital.
Aayush Dubey, research head and co-founder of Beshak.org Insurance, says the online shift has fundamentally altered how policies are sold.
"Today, most buying and renewal decisions happen online, where the way options are shown, selected, or explained can influence customer choices," Dubey explained. "Even small design elements, like what is pre-selected or what is made more visible, can influence decisions at that moment."
According to Prof. Manoj K. Pandey, associate professor at BIMTECH, these are deliberate systems, not technical glitches.
"Dark patterns are inbuilt algorithms which influence the cognitive-behavioural response of an online shopper," he said. “The most common tools are generating a sense of urgency, easy entry but difficult exit, and adding additional items without consent.”
The 13 traps
The CCPA has identified 13 distinct dark patterns used by digital platforms. In insurance, these can lock consumers into long-term financial commitments without full awareness.
False urgency: Messages such as “3 people are viewing this policy right now.”
Basket sneaking: Add-ons or riders added without explicit consent.
Confirm shaming: Language designed to induce guilt, such as “No, I don’t want to protect my family.”
Auto-renew traps: Policies renewed without clear, explicit consent.
Drip pricing: Final premium (including GST and fees) revealed only at checkout.
Nagging: Repeated pop-ups pushing users to “Opt-in” or “Renew.”
A recent LocalCircles survey found that 6 in 10 online insurance consumers reported experiencing such traps. Dark patterns are more prominent in non-life segments, where annual renewals and variable pricing structures create more opportunities for manipulation.
Shilpa Arora, co-founder and COO of Insurance Samadhan, describes the underlying theme as “consumer nudging without full awareness.”
Health insurance
Non-life insurance, particularly health and motor, is more prone to these tactics because transactions are frequent and ticket sizes are smaller.
"In health insurance, these patterns are more visible during renewal," Dubey explained. "A higher sum insured may already be selected when you open the renewal page, or certain add-ons may be included by default."
Motor insurance
In motor insurance, price distortion is common.
Public databases such as VAHAN enable mass outreach by multiple sellers, creating confusion through price undercutting, noted Shilpa Arora. Add-ons like “Zero Depreciation” may be pre-selected—or omitted—to make quotes appear cheaper, resulting in significant coverage gaps at the time of claim.
Travel insurance
Travel insurance was among the earliest examples of dark patterns.
Prof. Manoj Pandey recalls when airline portals made insurance a compulsory, “pre-ticked” item.
"People were getting insured without knowing they had bought a policy because the cost seemed lower compared to the original purchase," he said.
Irdai eventually intervened, making “Opt-in” mandatory.
"After that, the sales fell drastically, not even reaching 20% of what they were earlier," Pandey noted.
Claim shock
The damage often surfaces not at purchase—but at renewal or claim stage.
"Renewals are designed to make switching or comparing alternatives difficult," said Shilpa Arora. "Coverage tweaks or sub-limits may change at renewal, but are buried in the fine print."
This leads to “claim shock”—when consumers realise the renewed policy no longer matches what they originally bought.
Prof. Pandey added that intrusion extends beyond digital interfaces.
"The intrusion is not limited to the digital route; unsolicited calls from unrelated parties are very common and irritating," he highlighted.
Poor data privacy often fuels this ecosystem, where policy expiry data is sold to competing insurers who then aggressively “nag” consumers to switch.
Penetration gap
Despite rising digital manipulation, online insurance penetration remains low. Prof. Pandey cites Irdai data showing online channels contributed only 0.87% of life business and 1.68% of health business in 2024-25.
However, with the push toward “Insurance for All by 2047,” digital adoption is set to increase.
"The business officials, particularly the digital innovators, are very smart," Pandey said. "I personally do not see this intervention from the regulatory authority as a full stop. It has to be a regular practice."
He proposes three pillars for reform:
- Consumer awareness
- Pro-active regulation beyond paperwork compliance
- Stricter penalties that make misuse costlier than profit
Mindful click
"Platforms will need to enable genuine comparison based on coverage and suitability, not just price," Shilpa Arora said. "The biggest shift will be from 'easy to buy' to 'easy to understand.”
Aayush Dubey cautioned that while regulators can clean up interfaces, the final click still rests with the consumer.
Vinit Iyer, co-founder of Prudeno Wealth, warns that online convenience often masks coverage gaps.
“Online platforms may select features that reduce the premium, which the client thinks is a discount, but it might come back to bite at the time of claim,” Iyer explained.
He cites the “Smart Select” feature as an example, where a 15–20% premium reduction may come with heavy co-payment requirements at non-network hospitals.
Iyer adds that automated platforms often fail to explain high-impact features while promoting superficial ones like basic annual checkups simply to close sales. He advocates for intermediaries in complex decisions.