How it works
A ghost policy covers a life that is not what it appears to be. The insured may be a fabricated identity, a real person who does not know the policy exists, or someone who has already died. The proposal is completed by an intermediary or a relative, and premiums are paid from an account the insured does not control.
Two motives are common. Agents and brokers write ghost business to earn upfront commission, paying the first premiums themselves and letting the policies lapse once the clawback period has passed. Claim-driven schemes keep the policy in force until a claim is made on a forged or fraudulently obtained death certificate, and on funeral cover the claim can arrive soon after the waiting period ends.
Each policy can pass new-business checks because the identity number is valid, the premium collects and the proposal is complete. The pattern appears across the book: many lives sharing a payer account, contact number or address, written by one intermediary, with lapses or claims timed around commission and waiting-period milestones.
Red flags
- Many policies on unrelated lives paid from the same bank account or listing the same contact number
- Insured lives who cannot be reached, or who deny applying when contacted
- One intermediary with high new-business volume followed by early lapses
- Extended-family lives added shortly before a claim, often elderly or with no verifiable link to the main member
- Death claims soon after the waiting period ends, with the death registered far from the insured’s home address
- Proposals completed with the same signature style, email address or device
Signals the engine evaluates
- Number of insured lives sharing a payer bank account, phone number, email, device or address, resolved across the book
- New-business volume and early lapse rate per intermediary, against the per-agent baseline
- Time from inception to first claim, and from the end of the waiting period to the date of death
- Identity numbers resolved against other policies, prior claims and existing beneficiary records
Investigation and response
- 01Pause commission release and claim payments on policies linked to the shared payer or intermediary
- 02Contact insured lives through independent channels to confirm they exist and agreed to the cover
- 03Verify death certificates and identity documents with the issuing authority, and obtain burial or cremation records
- 04Suspend the intermediary’s new-business submissions pending SIU review, and report to the regulator or law enforcement where required