India’s health insurance market is growing, yet claim disputes are raising questions about how insurers sell and explain policies. Buyers in India today can lower the risk of health insurance claim rejection through accurate disclosures, cost checks and careful policy checks.
IRDAI data for 2024-25 shows total health insurance claims stood at Rs. 1,32,487 crore. Insurers paid Rs. 94,248 crore, disallowed Rs. 18,521 crore and repudiated or denied Rs. 11,412 crore. The gap has renewed attention on customer duties and the role of sellers.
Policyholders must disclose existing illnesses, earlier hospital stays and medication on the proposal form. Conditions such as diabetes or hypertension are often missed, yet leaving them out can affect a later claim.
Insurers compare proposal forms with hospital records when they assess claims. A mismatch may lead to health insurance claim rejection when the treatment relates to an undisclosed condition.
Puneet Oberoi, CEO of Finwise Services, warned that ‘missing disclosures are grounds for rejecting a claim.’ Buyers should complete the form themselves, check answers and keep a copy. The same care applies when children arrange policies for their parents.
Sellers need stronger responsibility at the application stage. Proper underwriting before policy issuance can set the premium, exclusions and coverage early. Checking risk when a customer files a claim can create disputes after years of premium payments.
A policy does not cover every hospital admission automatically. Insurers may question treatment when medical records do not support inpatient care. They can review bills that appear higher than normal charges for the same procedure at similar hospitals.
Before planned treatment, customers should ask the hospital for a written estimate. They may seek another medical opinion when the need for admission or surgery is unclear. These steps create a record for the insurer’s review.
Cashless cover does not promise instant approval or full payment. IRDAI rules require insurers to decide cashless pre-authorisation within one hour and final authorisation within three hours. Still, hospitals must submit complete records, and insurers can examine eligibility under the contract.
Policyholders should check if the hospital belongs to the insurer’s network. They should confirm the procedure, expected stay and cost before admission. Clear documents can reduce delays, although they cannot guarantee approval.
Room-rent caps, co-payments, waiting periods, deductibles and treatment sub-limits can lower settlements. A room above the permitted rate may trigger proportionate deductions on nursing, surgeon and diagnostic charges, depending on the contract.
For example, choosing a Rs. 10,000 room under a Rs. 5,000 limit may lead to a 50% deduction on linked costs. A Rs. 4 lakh bill could then produce a Rs. 2 lakh payment. Buyers should prefer policies without room caps or procedure limits where affordable.
The wider debate concerns India’s commission-led insurance sales model. Life insurance penetration slipped from 2.8% to 2.7% in 2024-25, while non-life penetration stayed at 1%. Complaints against general and health insurers rose sharply, with claim disputes forming a large share.
New IRDAI rules will require policies to identify the authorised salesperson from January 1, 2027. The change creates a record of who handled each sale. The framework also places disclosure and reporting duties on insurance intermediaries.
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