Editorial by Dr. Vishad Viswanath, MD & Chief Editor, nellikka.life

Health insurance is no longer a luxury—it is a lifeline. Especially in a country like India, where medical expenses can cause severe financial strain, a well-structured health insurance policy offers both dignity and security. Yet, despite being insured, many individuals and families find themselves shocked and helpless when their claims are denied at the most critical moment.

This editorial seeks to bring clarity on a commonly misunderstood issue:
Why are insurance claims denied in India, and how can you protect yourself from it?

Understanding the Ground Reality

India’s health insurance sector is growing rapidly, but so is the number of rejected claims. According to IRDAI (Insurance Regulatory and Development Authority of India), a significant number of claims—especially cashless ones—are either partially paid or outright denied due to technical, medical, or administrative lapses.

As a practicing physician and editor of nellikka.life, I’ve witnessed patients caught between hospitals and insurance providers, uncertain about their rights, responsibilities, and remedies.

Let’s change that.

Top Reasons for Insurance Claim Denials—and How to Prevent Them

1. Non-Disclosure or Misrepresentation of Pre-Existing Conditions (PECs)

One of the most common grounds for denial is failure to disclose a pre-existing illness (like diabetes, hypertension, asthma) at the time of purchasing the policy.

Prevention Tip:

• Disclose all existing health conditions honestly, even if minor or under control.
• Let your physician help document your baseline health truthfully.

2. Waiting Periods Not Completed

Most policies impose a waiting period (2–4 years) for certain conditions such as cataracts, joint replacements, hernia, etc.

Prevention Tip:

• Understand the specific waiting periods in your policy before undergoing any planned procedure.
• Avoid assuming coverage just because your policy is active.

3. Claiming for Non-Covered or Excluded Treatments

Certain procedures like cosmetic surgeries, dental care, infertility treatment, and alternative therapies are often excluded unless specifically covered.

Prevention Tip:

• Read your policy’s exclusion list carefully. Ask your insurance agent for clarification if needed.

4.Hospital Not in Network (for Cashless Claims)

Patients often assume any hospital visit can be settled cashlessly. However, cashless claims are only applicable in network hospitals.

Prevention Tip:

• Always check whether the hospital is part of your insurer’s TPA (Third Party Administrator) network before admission.
• For emergencies, keep hospital bills and discharge summaries ready to file for a reimbursement claim instead.

5. Improper Documentation or Delay in Submission

Claims may be rejected due to incomplete paperwork, such as missing bills, prescriptions, or diagnostic reports. Delays beyond the insurer’s prescribed time limit (usually 7–30 days) can also lead to rejection.

Prevention Tip:

• Maintain a clear medical file with every document from the hospital.
• File your claim promptly—ideally within 48–72 hours post-discharge.
• Cross-check documentation with your hospital’s billing department and your insurer’s checklist.

6. Room Rent Capping Violations

Many policies cap room rent (e.g., ₹3000 per day). If you stay in a higher category room (₹6000/day), your entire claim may be proportionately reduced, not just the room charges.

Prevention Tip:

• Know your room rent limit, and choose a room accordingly.
• Ask the hospital to guide you with a room that aligns with your policy benefits.

7. Policy Lapse or Grace Period Ignorance

Claims are rejected if the policy has lapsed due to non-renewal or was under grace period without coverage.

Prevention Tip:

• Set reminders to renew your policy at least 15 days in advance.
• Don’t wait till the last date to renew—especially if you’re undergoing treatment.

8. Policy Type Confusion: Individual vs. Group vs. Top-Up

People often get confused between corporate group policies, personal top-ups, and base covers. They may claim under the wrong tier or policy.

Prevention Tip:

• Understand which insurer handles each policy you own.
• Know which policy to claim under first (usually base policy, then top-up).

Common Oversight: Misunderstanding Riders & Clauses

One of the most critical yet overlooked aspects of health insurance in India is the lack of understanding of riders and actual coverage benefits. Many policyholders unknowingly sign up for policies that don’t meet their needs, often due to incomplete or misleading guidance. Here’s what to watch out for:

• Don’t rely on verbal assurances from agents — only what’s clearly written in the official policy document holds legal value.
• Riders and additional clauses (like maternity cover, critical illness add-ons, or room rent limits) must be understood thoroughly before signing.
• Agents or mediators may deliberately under-inform applicants to make a sale, leading to future claim denials or dissatisfaction.
• Take time to read the entire policy brochure, including the fine print, before you sign anything.
• It is your right as a consumer to ask for clarification and demand transparency before committing.
• Make sure the policy aligns with your actual health needs, existing conditions, and financial capacity—not just what’s “recommended.”

By being fully informed, you protect not just your health—but your financial peace of mind as well.

Doctor’s Perspective: What We Can Do Better

As doctors, we often witness patients and families feeling betrayed at the point of denial. A little awareness can save enormous emotional and financial distress. Here’s what I recommend:

• Patients should carry a summary of their health records and insurance details.
• Hospitals should assign trained insurance liaisons or case coordinators.
• Doctors must mention ICD codes and accurate diagnoses in discharge summaries to avoid claim delays.