Why Health Insurance Claims Are Rejected
“You think you’re covered — wait until your insurer says no.” Health insurance is sold as a risk cover and a safety net, but for countless policyholders the real shock comes not from the illness, but from the rejection letter of the health insurance company. In India, insurers proudly advertise claim settlement ratios above 90%, which is Rs 1.89 Crores claims settled through Cashless mode for an amount of Rs. 62537 Crores, 58% by volume and 66% by value are settled by Cashless mode. This was reported in the year 2024-25, the insurance companies have settled 3.26 Crore Claims for an amount of Rs. 94248 Crores. Yet I have observed thousands of families land up with shock after their claims are rejected. The truth is sobering: most denials aren’t random. They stem from avoidable mistakes, overlooked fine print, or procedural lapses. Quick Facts Claim Settlement Ratio (India, 2024): ~93% Average Claim Size: ₹1.5–2 lakh Ombudsman Relief Rate: ~40% in favour of policyholders Top 3 rejection causes: Non‑disclosure, waiting period, documentation errors The most recent development is our traditional healthcare treatments, which is also covered under the health insurance coverage, without any exclusion and treatment parity. Today Ayush treatment is at par with Allopathy treatment in India, which is an unique feature in our country. Of course, the awareness about such facilities are lacking and the Ministry of Ayush, Government of India has established a Helpline 1800110008 to facilitate the Ayush Hospitals and patients to derive all the benefits, without any discrimination. Let me share with you the most common reasons behind claim rejection — and illustrating them with real‑world examples — policyholders can learn how to protect themselves and ensure their coverage works when it matters most. 10 Common Pitfalls & How to Avoid Them 1. Non‑Disclosure of Pre‑Existing Conditions Health insurance thrives on transparency. Yet one of the most common — and costly — mistakes policyholders make is failing to disclose pre‑existing medical conditions due to mis selling adopted by the agents. Concealing issues like diabetes, hypertension, or past surgeries may seem harmless at the time of purchase, but insurers treat it as misrepresentation. “What you hide today can come back to haunt you tomorrow.” Case in Point: A 45‑year‑old in Delhi underwent bypass surgery. His claim was rejected outright when the insurer discovered he had not disclosed his long‑standing hypertension. The company argued the surgery was directly linked to the undisclosed condition. Lesson: Always disclose your medical history honestly, even if it means paying a higher premium. The short‑term cost is far better than the long‑term shock of a rejected claim. 2. Claims During Waiting Period Health insurance policies don’t always provide instant protection. Most impose waiting periods for certain illnesses, treatments, or pre‑existing conditions. Maternity benefits may require two to four years, while pre‑existing conditions often demand two to three years before coverage kicks in. “Buying late means waiting longer.” Case in Point: A young couple in Lucknow filed a claim for maternity expenses within one year of purchasing their policy. The insurer rejected it, citing the two‑year waiting period clause. Lesson: Plan coverage early. Buy health insurance well before you anticipate medical needs, so the waiting clock runs out before you need to file a claim. 3. Treatment Not Covered (Policy Exclusions) Every health insurance policy comes with exclusions — treatments or conditions that simply aren’t covered. Cosmetic surgery, dental procedures, infertility treatments, and certain alternative therapies often fall outside the safety net. Many policyholders discover this only when their claim is denied. “The fine print decides your fate.” Case in Point: A patient in Mumbai underwent bariatric surgery to address obesity. When he filed a claim, the insurer rejected it outright, pointing to the exclusion clause that ruled out weight‑loss procedures. Lesson: Never assume all treatments are covered. Read the exclusions carefully before purchase and consider add‑on riders if you anticipate specific medical needs. 4. Incomplete or Incorrect Documentation Health insurance claims live and die by paperwork. Hospital bills, discharge summaries, prescriptions, and diagnostic reports must all align perfectly. Even small errors — a misspelled name, mismatched dates, or missing signatures — can derail an otherwise genuine claim. “One wrong line on paper can cost lakhs.” Case in Point: A claim in Ghaziabad was rejected because the discharge summary listed the wrong patient’s name. Despite the treatment being genuine, the mismatch raised red flags and the insurer refused to settle. Lesson: Double‑check every document before submission. Keep both digital and physical copies and ensure hospital staff issue correctly filled records. Accuracy is your strongest ally in claim approval. 5. Delayed Intimation to Insurer Health insurance isn’t just about treatment — it’s about procedure. One of the most overlooked requirements is prompt intimation to the insurer or TPA. Most policies demand that hospitalization be reported within 24 hours. Delay in communication, even in genuine emergencies, can give insurers grounds to reject a claim. “A stitch in time – saves nine.” Case in Point: A family in Jaipur informed their insurer only after discharge. Despite the hospitalization being genuine, the claim was denied because the policy required intimation within 24 hours of admission. Lesson: Always notify your insurer or TPA immediately when hospitalization occurs. A quick phone call or online intimation can save you from unnecessary rejection. 6. Treatment at Non‑Network Hospitals Cashless claims are a major convenience — but they only work at hospitals within the insurer’s approved network. Opting for treatment at a non‑network hospital often means paying upfront and struggling later with reimbursement, which may be delayed or even denied. However, the insurance regulator IRDAI has now directed all the health insurance companies through a master circular that all claims need to be Cashless and approvals given within a stipulated time, which was missing earlier. Even non-network hospitals are bound to provide Cashless treatment for health insurance policy holders. To my surprise, data has revealed that 50% of the hospitals in our country do not want to entertain health insurance policyholders and are
