A ₹5 lakh health insurance policy can look substantial when you are healthy. But healthcare costs do not remain constant as you age.
Policybazaar claim data reported by Fortune India shows that the average health insurance claim rises from ₹65,124 for people below 25 years to ₹1.77 lakh for those above 60 — nearly 2.7 times higher.
That does not mean every senior citizen will incur a ₹1.77 lakh hospital bill, nor does it mean younger policyholders are unlikely to claim. What the data does show is that the type, complexity and cost of medical treatment changes considerably with age.
Why health insurance claims become more expensive with age
Younger policyholders are more likely to require treatment for infections, injuries and maternity-related care. Older policyholders are more likely to need treatment for cardiac disease, cancer, kidney disorders and other chronic illnesses that can involve specialist care, major procedures, repeated treatment and longer hospital stays.
Fortune India reports that although senior citizens represent a smaller share of claim volumes, their treatments contribute disproportionately to payouts because those treatments are often more expensive.
That distinction matters. A policyholder should not only ask, “How often am I likely to claim?” The better question may be, “If I suffer a serious illness, how large could that claim become?”
Cancer and cardiac treatment are driving a major share of healthcare expenditure
The Policybazaar analysis reported by Fortune India says cancer and tumours accounted for 12% of healthcare expenditure, while heart disease, hypertension and stroke accounted for another 10%. Together, those two groups represented 22% of the reported claims mix.
Breast cancer alone reportedly accounted for nearly ₹99 crore in claims, with an average claim amount of about ₹7.5 lakh. That figure is larger than the entire sum insured under many older ₹5 lakh policies.
This does not mean everyone needs the same sum insured. Medical costs vary by hospital, city, treatment, policy design and individual circumstances. But it does show why an old coverage limit should not be treated as permanently adequate.
Cancer claim costs have risen sharply since 2021
Medical inflation is visible in actual insurance claims. According to the reported analysis, the average cancer claim increased from about ₹3.1 lakh in 2021 to ₹5.6 lakh in 2026.
Average claims for heart disease, hypertension and stroke increased from around ₹1.4 lakh to more than ₹2 lakh, while bone, joint and muscle disorder claims rose from about ₹1.6 lakh to ₹2.3 lakh.
Tatkal Claims has separately examined how medical inflation and proposed health-insurance cost reforms can affect policyholders. The practical point is that a sum insured that looked comfortable five years ago may now provide a much smaller safety margin.
Your sum insured is not necessarily the amount the insurer will pay
One of the biggest misunderstandings in health insurance is assuming that a ₹4 lakh hospital bill under a ₹5 lakh policy will automatically result in a ₹4 lakh settlement.
Depending on the policy, the final settlement can be reduced by room-rent limits, co-payments, disease-specific sub-limits, deductibles, non-payable expenses and disputes over reasonable and customary charges.
For example, room-rent capping and proportionate deductions can affect more than the room charge itself, while reasonable and customary charge disputes can reduce what an insurer considers payable.
Treatment in major cities can cost substantially more
The Policybazaar analysis found that the average hospitalisation claim in Tier-1 cities was 44% higher than in Tier-3 cities. The report attributes this gap to higher treatment costs, access to super-speciality hospitals and greater use of advanced procedures.
For families living in or likely to seek treatment in major urban centres, geography therefore becomes another reason to review whether the current sum insured and policy structure remain suitable.
This is not only a senior citizen problem
People aged 26 to 45 accounted for more than 56% of all health insurance claims processed through the Policybazaar ecosystem, according to the report.
Claims in this group are driven by maternity-related hospitalisations, accidental injuries, planned surgeries and lifestyle-related illnesses. So the lesson is not that health insurance becomes important only after 60. The policy you carry into later life is built much earlier.
Seven things worth checking before your next renewal
Do not look only at the renewal premium. Open the policy schedule and wording and check the structure of the cover.
- Current sum insured: Does it still reflect present-day hospital costs rather than the costs that existed when you bought the policy?
- Room-rent entitlement: Is there a fixed cap, percentage limit or unrestricted room category?
- Co-payment: What percentage of an admissible claim must you bear yourself?
- Disease-specific limits: Are cataract, joint replacement, cardiac procedures or other treatments separately capped?
- Deductibles: If you have a top-up or super top-up policy, when does that additional cover actually become payable?
- Pre-existing disease provisions: Check declarations, waiting periods and whether you understand the rules around pre-existing disease claim disputes.
- Hospital network and geographical restrictions: Good coverage is less useful if suitable treatment is difficult to access under the policy.
A ₹10 lakh policy can still produce a large out-of-pocket bill
Consider a policyholder with ₹10 lakh of available coverage and a ₹6 lakh hospital bill. At first glance, the policy appears more than adequate.
But if the policy applies a co-payment, non-payable expenses, a disease-specific cap or another valid contractual restriction, the insured may still face a significant balance despite having unused sum insured.
That is why consumers should distinguish between available sum insured and the admissible claim amount. They are not always the same number.
What if your health claim is short-settled?
A partial payment should not automatically be accepted without understanding the calculation. If your health insurance claim has been short-settled, obtain the itemised settlement sheet and compare each deduction with the policy wording, hospital bill and medical records.
Check which expenses were rejected, which clause was used, whether a room-rent or proportionate deduction was applied, whether the insurer invoked reasonable and customary charges, and whether any disease-specific limit was used.
Some deductions may be expressly permitted by the contract. Others may deserve closer scrutiny. A claim dispute becomes much easier to assess when the insurer's calculation is compared line by line with the actual policy terms.
Health insurance should be reviewed as healthcare changes
The most useful lesson from the Policybazaar data is not simply that older people have larger claims. It is that healthcare risk changes throughout life while the cost of treatment is also moving.
Cancer claim amounts have risen substantially. Cardiac and orthopaedic claims have become more expensive. Treatment costs in major cities remain materially higher than in smaller cities. Health insurance therefore should not be treated as a product that is purchased once and then ignored for decades.
Already facing a health insurance claim dispute?
If your insurer has rejected a health insurance claim, reduced the settlement significantly, applied a room-rent deduction, invoked a pre-existing disease exclusion, questioned hospital charges or refused cashless treatment, the first step is to compare the insurer's stated reason with the actual policy terms and medical records.
Tatkal Claims helps policyholders analyse health insurance claim disputes, understand the insurer's stated reasons and identify the practical next step for escalation.
Frequently asked questions
Are health insurance claims really 2.7 times higher for senior citizens?
The Policybazaar analysis reported by Fortune India found an average claim of ₹65,124 among people below 25 and ₹1.77 lakh among people above 60, which is approximately 2.7 times higher. This is an average across the reported data and does not mean every senior citizen will have a claim of that amount.
Is ₹5 lakh health insurance enough in India?
There is no universal figure that is sufficient for everyone. Treatment type, hospital, city, age, family size, policy restrictions and existing coverage all matter. The reported average breast-cancer claim of ₹7.5 lakh is one example of why older coverage levels should periodically be reviewed.
Why are senior citizen health claims more expensive?
Older policyholders are more likely to require treatment for cancer, cardiovascular disease, kidney disorders and other chronic or complex illnesses that may involve specialist procedures and longer hospitalisation.
Can an insurer pay less than the hospital bill even if sufficient sum insured is available?
Yes. The payable amount depends on the policy terms and admissibility of individual expenses. Co-payments, deductibles, sub-limits, exclusions and other policy provisions can affect settlement.
What should I do if my health insurance claim is short-settled?
Obtain the insurer's detailed calculation and compare every deduction with the relevant policy clause, hospital bill and medical records. If a deduction appears inconsistent with the policy or facts, it can be challenged through the insurer's grievance mechanism and, where appropriate, further dispute-resolution channels.
Disclaimer: This article is for general information and consumer awareness. Health insurance needs vary by age, medical history, family circumstances, policy wording, location and treatment costs. It is not personalised insurance, medical or legal advice.
