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India’s health insurance premiums rose 10-15% for 2024 due to higher treatment costs. Senior citizens face a 100% increase, but IRDAI capped hikes at 10%. Claim rejections exceed 50%
The Insurance Brokers Association of India report has raised concerns about the high rate of health insurance claim rejections. (Representative/Shutterstock)
After the pandemic, India has witnessed a rapid increase in health insurance premiums, primarily fuelled by the unsustainable rise in treatment costs. This has resulted in an average increase of 10% to 15% in health insurance renewal premiums for 2024.
A report by Policybazaar states that over 53% of policyholders have reported a surge of more than 10% in their premium. Simultaneously, the number of health insurance claims being rejected has also surpassed 50%.
Health insurance premiums are escalating, with those for senior citizens experiencing a staggering 100% surge. In response to this dramatic rise, the Insurance Regulatory and Development Authority of India (IRDAI) intervened in January 2025, mandating insurers to cap annual renewal premium increases for senior citizens at 10%. Furthermore, there is growing discontent among policyholders regarding the insurance claim settlement process.
The Insurance Brokers Association of India (IBAI) report for 2022–23 has raised concerns about the high rate of health insurance claim rejections. The report reveals that out of 28 non-life insurers, 11 have a claim settlement ratio of less than 70%. Standalone health insurance companies, which primarily cater to retail policyholders, have demonstrated the poorest performance in this regard.
Why Are Many Claims Being Rejected
A survey conducted by social media portal and survey firm LocalCircles between June and December 2024 revealed that five out of 10 policyholders faced partial or complete rejection of their claims. 95% of health insurance complaints from policyholders relate to the partial or complete rejection of claims.
According to officials from IBAI, one reason for the low claim settlement ratio is the disparity in handling claims of different sizes. While insurers tend to settle small claims swiftly and without difficulty, they often delay the processing of large claims, leading to increased inconvenience for customers.
How To Reduce Insurance Premiums
Amit Chhabra, Chief Business Officer of Policybazaar, suggests that customers can reduce their insurance premiums through various strategies. One such method is to opt for a higher deductible, meaning they would pay a larger portion of expenses themselves before the insurance coverage kicks in. For instance, by choosing to pay Rs 15,000 out of pocket, policyholders could potentially reduce their premium by 15%.
Another way to save on premiums is by opting for a health insurance plan with a restricted network of hospitals. Choosing a smaller network can lead to savings of up to 15% on premiums. Additionally, insurance companies often offer discounts of 8% to 15% for policyholders who choose to pay their premiums in a lump sum for 2 or 3 years.
What To Do If The Claim Is Rejected
Policyholders dissatisfied with their insurance company’s claim decision should address their grievance to the company’s Grievance Redressal Officer (GRO). Complaints can also be lodged through the Insurance Regulatory and Development Authority of India’s (IRDAI) Insurance Bharosa portal.
Should the insurance company fail to resolve the complaint or provide a response within 30 days, policyholders have the option to escalate the matter to the Insurance Ombudsman of their respective district. If the Ombudsman deems the matter suitable for mediation, an order will be issued within one month of receiving written consent from both parties.
In other instances, the Ombudsman is empowered to deliver a decision within three months of receiving all pertinent documents and information. Should these avenues prove unsuccessful in resolving the issue, the insured retains the right to seek recourse through the consumer court.
