India’s health insurers disallowed claims totaling ₹15,100 crore during the financial year 2023-24, accounting for 12.9% of all claims filed, as per the annual report by the Insurance Regulatory and Development Authority of India (IRDAI).
Claims Data Overview
Out of ₹1.17 trillion in total health insurance claims submitted, insurers disbursed ₹83,493.17 crore, achieving a settlement rate of 71.29%. Meanwhile:
- Claims worth ₹10,937.18 crore (9.34%) were repudiated.
- ₹7,584.57 crore (6.48%) in claims remain unresolved.
The sector processed approximately 3.26 crore claims during the year, successfully settling 2.69 crore claims for an overall settlement ratio of 82.46%. The average payout per claim stood at ₹31,086.
Claims: Rejection vs. Repudiation
Claim rejection occurs when insurers refuse to process claims due to documentation errors or discrepancies, without evaluating their validity. Conversely, repudiation happens after claim evaluation, where the insurer denies the claim based on policy terms and conditions.
Industry Growth and Contributions
India’s health insurance sector demonstrated strong growth, with general and health insurers collecting ₹1,07,681 crore in premiums (excluding personal accident and travel insurance)—a 20.32% year-on-year increase. The sector provided coverage to 57 crore individuals under 2.68 crore policies.
Third-Party Administrators (TPAs) managed 72% of claims, while insurers directly processed the remaining 28%. Cashless settlements accounted for 66.16% of claims, with reimbursement covering 39%.
International and Government Initiatives
Public sector insurers such as New India, National, and Oriental Insurance expanded globally, generating ₹154 crore in gross premiums from health, personal accident, and travel insurance, covering 1.17 million lives abroad. Domestically, 1650.5 million lives were covered under personal accident insurance, including 901 million under government schemes like the Pradhan Mantri Suraksha Bima Yojana (PMSBY), Pradhan Mantri Jan Dhan Yojana (PMJDY), and IRCTC e-ticket insurance.
Steps for Policyholders to Avoid Claim Rejection
To reduce claim rejection risks, policyholders should:
- Maintain Proper Documentation: Ensure all paperwork is complete and accurate.
- Understand Policy Terms: Be aware of terms, conditions, and exclusions, particularly regarding pre-existing conditions and waiting periods.
- Seek Clarifications: Consult insurers or advisors for guidance on policy details and claim processes.
The IRDAI report underscores the importance of awareness and preparation for policyholders navigating India’s evolving insurance landscape.
TISHHA’s Take
How can policyholders improve their chances of successful claim settlements and reduce the risk of claim denials?
Term insurance offers vital financial security for your loved ones, ensuring they are protected even in your absence. Understanding the common reasons for claim rejection and taking proactive measures can help guarantee that your family receives the rightful payout.
Clear and honest communication is key to a smooth claim settlement process, providing crucial financial support during challenging times. To reduce the risk of claim denial, choose a reliable insurer and disclose all necessary information upfront. If you need guidance, don’t hesitate to contact the insurer’s customer service or consult with an insurance agent for assistance.
What key differences between claim rejection and claim repudiation should policyholders understand to avoid losing coverage?
Understanding the reasons behind health insurance claim denials is essential for ensuring proper coverage. Many policyholders mistakenly confuse Claim Rejection with Claim Repudiation.
- Claim Rejection happens when the insurer refuses to process the claim due to errors, missing information, or discrepancies, even before assessing its validity.
- Claim Repudiation occurs after a detailed review, where the insurer determines that the claim does not comply with the policy’s terms and conditions.
Knowing the difference can help you avoid pitfalls and improve your chances of successful claim approval.
Why did health insurers disallow claims worth ₹15,100 crore during FY24, and what does this signify for policyholders?
Health insurers in India disallowed claims worth ₹15,100 crore during FY24, representing 12.9% of total claims filed. This high disallowance stems primarily from:
- Incomplete or Incorrect Documentation – Errors in paperwork, missing information, or discrepancies in the submitted claims often lead to outright rejection before the claim is even evaluated.
- Policy Exclusions and Non-Disclosure – Claims involving pre-existing conditions, treatments not covered under the policy, or cases where policyholders withheld critical health information are frequently denied.
- Lapsed or Invalid Policies – Claims made on expired policies or during waiting periods are typically disallowed.
- Technical Errors – Minor mistakes, such as incorrect policy numbers or procedural lapses, can result in rejections.
What This Means for Policyholders:
- Increased Vigilance is Key – Policyholders need to carefully review their policies, understand the exclusions, and ensure all documents are accurately submitted.
- Transparency Matters – Disclosing all relevant health information during the policy application process minimizes risks of claim rejection later.
- Proactive Engagement – Reaching out to insurers or agents for clarity on policy terms and seeking assistance with documentation can enhance the chances of successful claim settlements.
The high disallowance rate highlights the importance of policy awareness and proactive management to ensure financial security during medical emergencies.
Source of Information:- https://www.business-standard.com/finance/personal-finance/health-insurers-reject-claims-worth-rs-15-100-crore-in-fy24-irdai-124123100615_1.html
Thanks for sharing. I read many of your blog posts, cool, your blog is very good.
Thanks a bunch!
Your point of view caught my eye and was very interesting. Thanks. I have a question for you.