Half the Claims, Half the Hope: The Hidden Reality of Health Insurance Claim Rejections in India

 “I thought I was covered. Turns out, I was only covered until it actually mattered.” — A policyholder’s remark after his ₹4.5 lakh hospitalisation claim was short-settled to ₹1.2 lakh.

If you're thinking this is a rare story, think again.

According to industry data and media reports, nearly 50% of health insurance claims in India either get rejected or short-settled—a figure that should set off alarm bells for anyone relying on their policy as a financial safeguard.

But why is this happening? And more importantly, how can you avoid becoming part of that statistic?

Let’s break it down.

A. The Numbers Don’t Lie—But They Do Hurt
Reports and data shared by NDTV Profits indicate a high number of policyholders facing claim rejections, delay in claim process or short-settlement of health insurance claims.

Here are the most common causes behind these disappointing numbers. The top Reasons Why Claims Are Rejected or Short-Settled

1. Lack of Proper Documentation

The missing discharge summary, unclear prescriptions, or incomplete bills are some of the most common causes for rejection. Even a small mismatch in diagnosis and treatment records can trigger scrutiny.
➡️ Solution: Always double-check your hospital’s claim file before submission. An expert’s checklist helps.

2. Non-Disclosure of Pre-Existing Conditions

Insurers often allege that the policyholder failed to disclose medical history, even when it wasn’t relevant at the time of purchase.
➡️ Solution: Know what counts as material information. If the claim rejection is unfair, seek claim rejection services or expert support to file a complaint about the insurancecompany.

3. Room Rent Capping

A ₹5,000/day room rent limit can reduce your total reimbursement. Insurers proportionally reduce doctor fees, surgery charges, and even diagnostics when this cap is breached.
➡️ Solution: Read the room rent clause. Opt for no sub-limit policies if you can. And always get an expert to review high-value claims.

4. Hospital Not in Network

Cashless facilities work only in network hospitals. If you visit a non-network hospital, many charges could be declared inadmissible.
➡️ Solution: Always call the insurer’s helpline before admission unless it’s an emergency. In emergencies, document everything and keep a subject Matter expert in the loop.

5. Unapproved Treatments or Investigations

Some policies don’t cover experimental therapies, robotic surgeries, or procedures deemed cosmetic. Claims involving such treatments are often short-settled or outright rejected.
➡️ Solution: Know your coverage limits. If a treatment was medically necessary, an insurance claim expert can help defend it.

6. Claim Filed After Deadline
Yes, there’s a time limit—even for emergencies. Many insurers require intimation within 24–48 hours and documentation within 15 days.
➡️ Solution: File even if late, but justify the delay with evidence. There are exceptions, and with proper support, claims can still be approved. 

B. The Psychology Behind Claim Rejections- Malicious or Systemic
Insurers operate with risk assessment logic, which sometimes works against the very people they're meant to protect.
Most policies are sold in jargon. When claim time comes, the language of the policy becomes a wall instead of a bridge.
And in all honesty? The system is not designed for the average policyholder to win without help.

C. Why Subject Matter Experts Are No Longer Optional
Filing a claim shouldn’t feel like preparing for a legal battle. But it does. That’s why subject matter experts have become the backbone of claim support in India. From understanding claim rejection codes to drafting technical appeals and invoking IRDAI protections, these experts turn chaos into clarity. 

SMEs can help you:
● Challenge unfair claim rejection
● Fight short-settlement decisions
● File a complaint about insurance company practices
● Improve the chances of full claim settlement

Let’s be honest—you wouldn't fight a court case without a lawyer. Why fight a policy worth lakhs without an insurance expert?

The Takeaway: Awareness Is Power—But Expert Help Is a Superpower

India’s health insurance industry is growing, but so are insurance claim-related issues. The rise in mis-selling, unclear clauses, and automated processing has made it harder for genuine claims to get through.

If you’re facing claim rejection, delay, or a partial payout, know this: You’re not alone. And you’re not powerless.
It’s time to read between the lines, ask the right questions, and seek support from those who’ve mastered the system.

Because your health isn’t negotiable—and neither is your rightful claim.