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The majority of health insurance claims in India are rejected due to policyholders misunderstanding the terms of their policy, failing to disclose pre-existing health conditions, or submitting claims that are not covered by their policy.
Experts from the insurance industry emphasise that proper awareness and transparency are essential to ensure a seamless claims process. Rakesh Jain, CEO of Reliance General Insurance, highlighted that many policyholders face financial stress during medical emergencies because their health insurance claims get rejected. He said, "Rejection of claims majorly tends to occur on account of misunderstanding of policy wording, failure to disclose pre-existing conditions, procedural failures, or claims falling out of policy purview, etc." Jain emphasised the importance of educating customers on these issues. He also shared that India's health insurance industry has expanded, but it remains extremely low in terms of penetration, particularly in non-metro areas. Currently, non-life insurance penetration is approximately. 1 per cent compared to the global average of approximately. 3.9 per cent. Amit Chhabra, Chief Business Officer - General Insurance at Policybazaar.com, further pointed out that claims are typically denied for specific reasons. These include a lack of understanding about policy terms, such as waiting periods and the required documents, including hospital bills or discharge summaries. Claims can also be rejected for treatments not covered under the policy. Another common reason is when customers provide false information or fail to disclose important medical history, including pre-existing conditions like diabetes or hypertension, or lifestyle habits like smoking or drinking alcohol. He said, "Insurers may deny a claim if the policyholder provides false medical information or fails to disclose pre-existing conditions like diabetes, hypertension, etc." The experts also highlighted that expanding health insurance coverage to low-income and rural populations comes with its own challenges. Jain noted that lack of quality medical infrastructure in rural areas remains a major hurdle. "Even with insurance, accessibility to quality healthcare remains a concern due to a shortage of hospitals, diagnostic centers, and specialists," he said. Building trust and strengthening rural healthcare infrastructure is essential for the success of insurance in these areas. On a more positive note, Chhabra shared that over two-thirds of new health insurance buyers are now coming from beyond Tier-1 cities, showing increasing awareness and demand among rural and lower-income groups. Both industry leaders welcomed government schemes like Ayushman Bharat. Jain called it a "significant step" towards universal health coverage, while Chhabra noted that such schemes have directly increased health insurance awareness and purchases in the areas where they have been introduced. Ultimately, both experts agreed that a combination of public and private efforts, customer education, and system simplification is key to improving claim experiences and increasing insurance penetration across India. In case a health insurance claim is wrongfully rejected by an insurance provider, consumers can approach the Insurance Ombudsman, a government-appointed authority that helps resolve disputes between policyholders and insurers. This platform allows policyholders to seek justice and claim redressal without needing to go through a lengthy legal process. (ANI)
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