The Numbers That Tell Two Different Stories
Every year, health insurance companies proudly advertise their claim settlement ratios. Ninety percent. Ninety-two percent. Ninety-six percent. The message is clear: buy from us, and your claim will almost certainly be paid.
But a Cafemutual analysis of financial year 2026 data has uncovered a gap that most policyholders never see. While the health insurance industry settled 89.23 percent of claims by policy, it settled only 78.22 percent of the total claim amount. In other words, nearly 9 out of 10 claims were approved, but policyholders received only about 78 paise for every rupee they claimed.
This 11 percentage point gap is not a rounding error. It represents thousands of crores of rupees that policyholders were entitled to but did not receive. And it reveals a truth that the industry would prefer you not to know: settling a claim is not the same as paying the full claim.
The Full Picture: Every Insurer's Hidden Gap
Here are the complete figures showing the difference between claim settlement by policy and claim settlement by amount for all 28 health insurers in India. The gap ranges from a modest 0.3 percentage points to a staggering 23.5 percentage points.
| Insurer | Policy Settlement (%) | Amount Settlement (%) | Gap (pp) |
|---------|----------------------|----------------------|----------|
| ManipalCigna Health (WORST) | 94.91 | 71.44 | 23.47 |
| Go Digit General (WORST) | 92.27 | 72.40 | 19.87 |
| United India Insurance (WORST) | 84.87 | 65.78 | 19.09 |
| Magma General (WORST) | 82.40 | 63.93 | 18.47 |
| Niva Bupa (WORST) | 92.79 | 75.80 | 16.99 |
| SBI General (WORST) | 81.44 | 64.46 | 16.98 |
| Universal Sompo (WORST) | 80.63 | 64.33 | 16.30 |
| New India Assurance (HIGH) | 92.15 | 78.01 | 14.14 |
| Bajaj Allianz (HIGH) | 92.44 | 79.61 | 12.83 |
| Narayana Health (HIGH) | 49.74 | 37.43 | 12.31 |
| Acko General (HIGH) | 90.40 | 78.19 | 12.21 |
| IFFCO Tokio (MODERATE) | 77.71 | 68.72 | 8.99 |
| Generali Central (MODERATE) | 89.54 | 81.58 | 7.96 |
| HDFC Ergo (MODERATE) | 95.60 | 87.69 | 7.91 |
| Galaxy Health (MODERATE) | 82.82 | 75.16 | 7.66 |
| ICICI Lombard (MODERATE) | 90.22 | 83.10 | 7.12 |
| The Oriental (MODERATE) | 84.26 | 77.88 | 6.38 |
| Tata AIG (MODERATE) | 96.59 | 90.36 | 6.23 |
| Care Health (MODERATE) | 96.33 | 91.09 | 5.24 |
| Star Health (MODERATE) | 90.00 | 84.80 | 5.20 |
| Zuno General | 81.17 | 77.10 | 4.07 |
| Cholamandalam MS | 76.54 | 74.57 | 1.97 |
| Zurich Kotak | 89.41 | 87.51 | 1.90 |
| Aditya Birla Health | 81.58 | 80.92 | 0.66 |
| National Insurance | 78.95 | 78.67 | 0.28 |
| IndusInd General (BEST) | 65.92 | 66.43 | -0.51 |
| Royal Sundaram (BEST) | 83.03 | 85.39 | -2.36 |
| Raheja QBE (BEST) | 69.06 | 85.33 | -16.27 |
The Mathematics of Partial Payment
Here is what the numbers mean in plain language. In financial year 2026, the health insurance industry received claims worth Rs 1.41 lakh crore. It paid Rs 1.1 lakh crore. The difference, Rs 31,000 crore, was not paid. Some of it was rejected outright. More of it was partially settled through deductions, sub-limits, co-payments, proportionate charges, and post-hoc adjustments that reduced the payout below the claimed amount.
By policy count, the industry settled 3.38 crore claims out of 3.79 crore filed. That sounds impressive. But the 41 lakh claims that were not settled, plus the countless claims that were settled for less than the full amount, represent millions of families who paid premiums in good faith and received less than they were promised.
The Worst Offenders: Where the Gap Is Widest
The analysis reveals dramatic variations between insurers. Some companies are relatively consistent, with only a small gap between their policy settlement ratio and their amount settlement ratio. Others show a staggering difference, suggesting systematic underpayment of approved claims.
ManipalCigna Health recorded the widest gap. It settled 94.91 percent of claims by policy but only 71.44 percent by amount. This means that while nearly 95 out of 100 claims were approved, policyholders received only about 71 paise for every rupee claimed. The company paid Rs 1,435 crore against claims worth Rs 2,009 crore, leaving a shortfall of Rs 574 crore.
Go Digit General reported a claim settlement ratio of 92.27 percent by policy but only 72.40 percent by amount. It settled Rs 1,799 crore out of Rs 2,484 crore in claims, a gap of Rs 685 crore.
United India Insurance recorded 84.87 percent by policy and 65.78 percent by amount. It paid Rs 8,075 crore against claims worth Rs 12,276 crore, a shortfall of over Rs 4,200 crore.
New India Assurance settled 92.15 percent of claims by policy but only 78.01 percent by amount, a gap of 14.1 percentage points representing a shortfall of over Rs 3,000 crore.
Niva Bupa settled 92.79 percent by policy but only 75.80 percent by amount, a gap of 16.99 percentage points. SBI General settled 81.44 percent by policy but only 64.46 percent by amount, a gap of 16.98 percentage points.
These are not abstract figures. They represent real patients, real hospital bills, and real financial distress. A family that claimed Rs 5 lakh for cancer treatment and received Rs 3.5 lakh must find Rs 1.5 lakh from somewhere. For many Indian families, that somewhere does not exist.
The Honest Players: Where the Gap Is Smallest
Not all insurers operate this way. A few companies reported a higher claim settlement ratio by amount than by policy, meaning they paid a larger proportion of claim value than of claim count.
Raheja QBE General settled 69.06 percent by policy but 85.33 percent by amount, a negative gap of 16.27 percentage points. Royal Sundaram settled 83.03 percent by policy but 85.39 percent by amount. IndusInd General settled 65.92 percent by policy but 66.43 percent by amount.
National Insurance recorded a difference of just 0.28 percentage points, settling Rs 8,159 crore out of claims worth Rs 10,371 crore. Aditya Birla Health had a gap of only 0.66 percentage points. Zurich Kotak General showed a gap of 1.9 percentage points, and Cholamandalam MS General had a gap of 1.97 percentage points.
These numbers suggest that some insurers are genuinely trying to pay what they owe, while others have built business models that systematically underpay approved claims.
How Insurers Reduce Payouts Without Rejecting Claims
The gap between policy settlement and amount settlement is not an accident. It is the result of deliberate mechanisms built into policy design and claim processing. Here is how it works.
Sub-limits cap specific expenses like room rent, ICU charges, doctor fees, or ambulance costs. If your room rent sub-limit is Rs 3,000 per day and your hospital room costs Rs 5,000, the insurer pays only Rs 3,000. But the damage does not stop there.
Proportionate deductions apply when you exceed any sub-limit. The insurer does not just deduct the excess room rent. It reduces the entire bill proportionally, including surgeon fees, nursing charges, medicines, and diagnostic tests, even though those items had nothing to do with your room choice. A Rs 4 lakh bill can become a Rs 2.8 lakh payout through this mechanism alone.
Co-payment clauses require you to pay a fixed percentage of the approved amount, typically 10 to 20 percent. On a Rs 3 lakh approved claim, a 20 percent co-payment means you pay Rs 60,000 out of pocket.
Deductibles in top-up policies mean the top-up only activates after you have paid a threshold amount. If your base policy covers Rs 3 lakh and your top-up has a Rs 5 lakh deductible, the top-up pays nothing until your total eligible expenses exceed Rs 8 lakh.
Non-medical expense exclusions remove charges for registration, admission fees, toiletries, dietary supplements, and other items that hospitals routinely bill for. These can add up to thousands of rupees on a long hospitalisation.
Post-hoc adjustments occur after the initial approval. The insurer approves cashless treatment, the patient is discharged, and weeks later the insurer sends a settlement letter showing deductions that were never discussed. By then, the patient has already paid the hospital and has no leverage to negotiate.
Why Policyholders Do Not See This Coming
The fundamental problem is that most policyholders do not understand these mechanisms when they buy the policy. Agents sell coverage based on the sum assured: Rs 5 lakh, Rs 10 lakh, Rs 25 lakh. They rarely explain that the actual payout may be 20 to 30 percent lower due to sub-limits, co-payments, and proportionate deductions.
When the claim arises, the policyholder expects the sum assured. They receive the settlement letter and discover that their Rs 5 lakh policy paid only Rs 3.5 lakh. They feel cheated. But the insurer points to the policy document, where the sub-limits and co-payment clauses are buried in fine print, and says the contract was clear.
This is not transparency. It is obfuscation by design. And it is why the gap between policy settlement ratio and amount settlement ratio matters more than any headline number the industry publishes.
What You Should Do Before You Buy
If you are purchasing or renewing a health insurance policy, here is how to protect yourself from the partial payment trap.
Ask for the amount settlement ratio, not just the policy settlement ratio. Any insurer can claim a 95 percent settlement ratio if they approve claims and then deduct 30 percent from each one. The amount settlement ratio tells you what they actually pay.
Read the sub-limits carefully. Room rent caps, ICU limits, and doctor fee sub-limits are the primary drivers of partial payment. Choose a policy with no sub-limits or with sub-limits that match the actual costs at hospitals you use.
Avoid co-payment clauses if possible. A policy with a co-payment may have a lower premium, but you will pay more at claim time. For most families, a slightly higher premium for a zero co-payment policy is a better deal.
Check the proportionate deduction clause. Some policies explicitly state that exceeding the room rent sub-limit will trigger proportionate deduction across the entire bill. Others do not. Know what you are signing.
Verify the no-claim bonus and restoration benefits. These features can increase your effective coverage without increasing your premium. They are particularly valuable if you face a major illness.
Compare insurers using both ratios. The table above shows dramatic differences between companies. An insurer with a 95 percent policy settlement ratio but a 71 percent amount settlement ratio is not a safe choice, no matter how good the headline number looks.
What to Do If Your Claim Is Underpaid
If you have already filed a claim and received less than the full amount, here is how to challenge it.
First, demand an itemised settlement statement. The insurer must show exactly how they arrived at the approved amount. Every deduction, every sub-limit application, and every proportionate reduction must be explained line by line.
Second, verify that the deductions are consistent with your policy terms. If the insurer applied a proportionate deduction that is not mentioned in your policy document, that is an illegal deduction.
Third, check whether the sub-limits were disclosed at the point of sale. If the agent told you there were no sub-limits and the policy document reveals them, you may have a case for mis-selling.
Fourth, calculate what you should have received. Add up the eligible expenses, apply the correct sub-limits and co-payments as per the policy wording, and compare the result with the insurer's settlement. If there is a discrepancy, challenge it in writing.
Fifth, escalate through the grievance process, Bima Bharosa, the Insurance Ombudsman, and if necessary, the consumer court. Partial payment of approved claims is a deficiency in service. Courts have ordered insurers to pay the full amount plus interest and compensation when deductions were unjustified or not properly disclosed.
Bottom Line
The health insurance industry's claim settlement ratio is the most quoted and most misleading number in Indian finance. An insurer that settles 95 percent of claims but pays only 71 percent of the claimed amount is not a reliable protector. It is a systematic underpayer hiding behind a headline statistic.
The gap between policy settlement and amount settlement represents Rs 31,000 crore that policyholders were entitled to but did not receive in financial year 2026 alone. For the families who needed that money for cancer treatment, cardiac surgery, or emergency care, the gap is not a statistic. It is a crisis.
At Tatkal Claims, we help policyholders challenge underpaid claims, unjustified deductions, and partial settlements that leave families financially devastated. If your claim was approved but underpaid, if the settlement letter shows deductions you do not understand, or if you suspect your insurer is systematically paying less than it owes, contact us.
The numbers do not lie. But they do not tell the whole story unless you know which numbers to look at.
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Facing a health insurance claim that was approved but underpaid? Contact our legal team at Tatkal Claims for expert assistance in challenging unjustified deductions and securing the full benefits you deserve.