Four members of the gang, including two former insurance agents, were held from Moradabad on Wednesday.
Additional Superintendent of Police (ASP), STF, Vishal Vikram Singh said on Thursday that at least a dozen such cases of the gang getting insurance for dead people have come to light.
He said that the gang had also duped several banks by getting money from dormant accounts transferred into accounts created by them using forged identity of the users.
Those arrested have been identified as Hariom Saini, Pramod Kumar, Anuj Kumar and Ankit Chaudhary.
Saini, leader of the gang, and Pramod Kumar have earlier worked in a leading insurance firm while Anuj runs a Jan Seva Kendra.
The ASP said: "The gang would first collect details about deceased people in their area and then in connivance with some relative of the deceased, bank and insurance company officials, get an insurance policy for the dead person.
"After a few months, they would use forged documents to claim the insurance amount, which would be distributed among all of them."
Saini confessed that the gang was also duping banks by fraudulently transferring money from dormant accounts into proxy accounts created by them, the officer said.
"This was done in connivance with local bank officials who helped the gang collect all details of any account which has remained inactive for a long time. Then it would procure its related details like balance, internet banking, user id, and mobile number linked to it," the ASP said.
A case has been registered against the accused for fraud and forgery and further proceedings against them is underway, the ASP said.
( With inputs from IANS )