Think your health insurance will always protect you? Think again. Here are 5 reasons why health insurance claims fail in India — and how you can avoid these costly mistakes.
Imagine this: You’ve been paying your health insurance premium for years. Suddenly, a medical emergency lands you in the hospital. You file a claim — only to discover that your policy won’t cover it. Unfortunately, this is more common than most Indians realize.
Every year close to 10% of health insurance claims in India either getes rejected or closed without payment. With medical inflation rising at upto 14% per year, even one rejected claim can drain a family’s savings.
So, why do health insurance policies fail when you need them most? Let’s break it down.
1.Hidden Exclusions in the Policy
Most policies come with a list of exclusions that many people never read. For example, treatments like dental procedures and cosmetic surgeries are often not covered.
Worse, pre-existing diseases may be excluded for the first few years. Pre-existing conditions are one of the leading cause of claim rejections in India.
- Note : Always check the exclusions list before buying a policy.
2.Waiting Period Clauses
Health insurance isn’t effective from day one. Typically, there’s:
- A 30-day waiting period for general illnesses.
- A 2–4 year waiting period for pre-existing diseases.
- Specific waiting periods for maternity or critical illness benefits.
Many people discover this too late. Imagine being diagnosed with diabetes six months after buying a policy — your claim may be denied because the waiting period isn’t over.
- Note: Choose plans with shorter waiting periods, even if premiums are slightly higher.
3.Sub-Limits and Room Rent Caps
This is one of the most overlooked traps. Typically insurance companies allows 1% – 2% of sum assured as room rent. Let’s say your sum assured amount is ₹500000 then your policy will cover ₹5,000 per day for room rent. Now imagine you had to choose a room that costs 10,000 per day. Not only will you pay the difference in rent, but all other charges (doctor’s fees, surgery costs) linked to the room type may also increase—leaving you with a huge bill.
Most of the claim disputes in metro cities arise because of room rent sub-limits.
- Note: Go for policies without room rent restrictions.
4.Claim Rejection Due to Documentation
Even genuine claims can get rejected if your paperwork is incomplete. Missing hospital bills, unclear discharge summaries, or wrong details on claim forms can delay or deny your claim.
This is one of the biggest reason for claim rejection in india.
- Note: Always keep digital and physical copies of all medical records. Inform your family about the process in advance.
5.Underinsurance – Low Sum Insured
Many Indians opt for the cheapest policy, often goes for lower coverage. While this may have worked a decade ago, today’s hospitalization costs are far higher. For instance, a single bypass surgery in a private hospital can cost ₹6–10 lakh in metro cities.
According to various reports 50-70% of insured Indians are underinsured, meaning their cover is too low to protect them during major health events.
- Note: In urban India, aim for at least ₹10–15 lakh coverage, and consider a super top-up policy for extra protection.
How to Protect Yourself from These Failures
- Read the fine print: Never skip exclusions and sub-limit clauses. Read every sentence in detail, if it’s too hard to understand you call always look on the internet these days.
- Choose higher cover: Especially if you live in metros. If you can’t afford it in the first year, you can gradually increase your sum assured every year.
- Opt for no sub-limits: Avoid policies that cap room rent or treatment costs.
- Keep documents ready: Store bills, prescriptions, and discharge summaries carefully.
- Consider top-ups: Super top-up plans are affordable and expand coverage.
Conclusion
Health insurance is not a luxury—it’s a necessity in today’s India. But unless you understand the loopholes, your policy could fail you during a real emergency. Don’t just buy the cheapest plan. Buy the right one.
A little awareness today can save you lakhs tomorrow.
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