Primary cause for claim denial was non-disclosure of illness

The primary cause of claims rejection by insurers is non-disclosure of pre-existing medical problems.

Because the insured had pre-existing diseases like diabetes or hypertension that were not revealed at the time of purchase, about 25% of health insurance claims are denied. A further 25% of claims are denied because policyholders filed claims for OPD (outpatient department) or other treatments that were not covered by the policy since they were not aware of the terms of cover. A sizable portion (16%) of claims are denied because the claimant did not respond to inquiries. A sizable portion (16%) of claims are denied because the claimant did not respond to inquiries.

An insurance brokerage licence holder, PolicyBazaar, examined data on two lakh health insurance claims from April to September 2023; thirty thousand of the claims were denied.

From the standpoint of the insured, claims that are denied due to non-disclosure result in the most harm to their finances. Equal numbers of low-value claims are denied for being beyond the purview of the policy, and on rare occasions, claims pertaining to experimental procedures are denied as well.

"We have seen OPD claims and claims for spectacles, which are, of course, not covered. While rejections due to the treatment being outside the scope of the policy are numerous, they are usually for low-value expenses. The insured file many claims out of ignorance," stated Amit Chhabra, chief business officer of PolicyBazaar's health insurance division.