You have bought health insurance. But getting the policy is only the first step. IRDAI data shows that roughly one in every four rupees claimed from health insurers in 2024-25 was not paid, either because the claim was disallowed or repudiated. In absolute terms, of the ₹1,32,487 crore in total claims, ₹94,248 crore was paid, ₹18,521 crore was disallowed, and ₹11,412 crore was repudiated or denied.
If the first step is getting adequate health cover, the second is making sure you fill in the proposal form carefully and understand the policy conditions. These steps can reduce the risk of a claim being rejected or the eventual payout falling short of the hospital bill.
Insurance can be complicated, but there are several things within your control. The most important are choosing the right product and insurer, providing complete and accurate information when buying the policy, and understanding what the policy does and does not cover.
A comprehensive policy from an insurer with a strong claims record is a good starting point. But even the right policy may not pay the full hospital bill, with minimal out-of-pocket expenses, unless you get three things right.
1. Declaring Pre-Existing Conditions Accurately
Not disclosing pre-existing conditions accurately in the proposal form can create problems later. If you are admitted for a planned treatment or surgery related to a pre-existing condition that you did not disclose, the insurer may reject the claim.
Even in an emergency, doctors and nurses may ask you and your accompanying relative detailed questions about your health history and current habits. That is when discrepancies between what was disclosed when the policy was bought and what emerges during treatment can become an issue.
Puneet Oberoi, CEO of Finwise Services Pvt Ltd, explains: People think that hypertension or diabetes are normal and skip adding these details while filling up the health insurance application. Or maybe the advisor or agent is over enthusiastic to get the policy through and does not probe for details. It may happen that you buy the policy directly and get careless or are in a hurry. Be it intentional or otherwise, missing disclosures are grounds for rejecting a claim.
For insurers, non-disclosure of material facts relating to previous illnesses, hospitalisation or lifestyle factors affecting health can be significant when assessing a claim.
Mahavir Chopra, CEO and founder of Beshak.org, adds: This kind of miss often happens while getting health cover remotely for parents. You pay a high premium for age, but without diligence in filling the proposal form, the entire effort and money may go to waste.
2. Avoiding Misrepresentation and Overcharging
What also matters are the facts surrounding the medical event that led to the hospitalisation.
Oberoi notes that there have been cases where doctors recommend hospitalisation for relatively minor conditions and hospitals accept patients because of the financial incentive involved. However, the insurance company is within its rights to reject a claim that does not find merit in terms of the insured needing to be hospitalised in the first place.
For example, a fever caused by non-specific factors may not necessarily warrant hospitalisation from an insurer's perspective.
The cost of treatment can also affect the amount ultimately paid.
Chopra explains: There have been cases where hospitals routinely overcharge for a procedure knowing that it will be covered by insurance. If the insurer assesses the final claim to be too high relative to the average cost of the same procedure in other similar hospitals, the chances are that the entire claim will not go through and the customer may get a lower amount against their original invoice.
If an insurer has doubts about a claim, a cashless request may not be approved immediately. The insurer may first examine the circumstances and supporting documents before deciding how to proceed.
As a customer, therefore, it is important not only to be accurate about your medical history but also to understand the circumstances and costs of a planned hospitalisation. Before an illness-related procedure or surgery, get a cost estimate from the hospital and, where appropriate, seek independent medical opinions on the proposed treatment and its cost.
3. Understanding Your Policy Conditions and Limits
Another source of a mismatch between the hospital bill and the amount paid by an insurer is the policy's conditions and limits.
Room-rent caps are one such condition. If a policy caps room rent at ₹5,000 and you choose a ₹10,000 room, the impact may extend beyond the room charge itself. Depending on the policy terms, the insurer may apply a proportionate deduction to other associated expenses, such as surgeon's fees, nursing and diagnostics.
For example, if a policy applies a 50% proportionate deduction because the room chosen costs twice the permitted amount, a ₹4 lakh eligible bill could effectively result in a ₹2 lakh settlement.
Other policies may have limits on particular surgeries or treatments. Unless you understand these conditions before buying the policy, you could face a lower payout when you make a claim.
Experts recommend looking for policies without room-rent caps or treatment-specific limits where possible.
A cashless policy also does not mean instant claim approval. Hospitals have their own discharge procedures, while insurers have verification processes, which can mean that discharge takes time. Before buying a policy, read the fine print carefully. Pay particular attention to key terms and conditions, waiting periods for illnesses and maternity, exclusions and the insurer's hospital network.
The Financial Reality of Claim Rejections
In 2024-25, total claims under the health insurance business of general and health insurers stood at ₹1,32,487 crore, up 13% from the previous year. Of this, ₹94,248 crore was paid, ₹18,521 crore was disallowed and ₹11,412 crore was repudiated or denied.
There is considerable fine print to understand before buying health insurance. Disputed claims can take time to resolve and can have significant financial consequences.
Conclusion
Protecting yourself from health insurance claim rejection comes down to three critical actions: accurately disclosing your medical history, avoiding misrepresentation by understanding the necessity and cost of treatment, and thoroughly understanding your policy's conditions and limits. These steps can significantly reduce the risk of your claim being denied or your payout being reduced.
However, even with the best preparation, claim rejections and delays can still happen due to insurer tactics or complex policy language. If you are facing any issue with your health insurance claim, do not fight alone. At Tatkal Claims, our team of claim experts specializes in helping policyholders navigate claim disputes, rejections, and delays. We understand the complexities of insurance contracts and the strategies insurers sometimes use to avoid payouts. Let us help you get the settlement you deserve. Visit Tatkal Claims today to know your rights and get expert assistance.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. Please consult a qualified professional for legal matters.