This is the first (and probably the last) time I’m ever going to mind this word … blame it on the movie.
At www.thefreedictionary.com, INSIDIOUS is defined as “beguiling but harmful; working or spreading harmfully in a subtle or stealthy manner”.
In the movie, this must refer to the way the spirits/ghosts/entities lurk and wait by a human body until his soul get really stuck in another universe (a dark and scary universe) and can’t come back. When that time comes, the spirit/ghost/entity can take over the human body and carry on as if it were his own.
In a way, this is medidated reincarnation.