N Nagarajan
Health insurance is meant to provide financial protection during medical emergencies. Unfortunately, for many policyholders, the real struggle begins only after the patient survives. The following is a first-hand account of how a genuine emergency claim was rejected on a technical ground. Someone known to us in his early sixties, working with a well-known public figure in Delhi, stepped out on official work within walking distance of his office.
While returning, he suddenly felt giddy and collapsed near the office. His colleagues immediately came to his aid and rushed him to one of South Delhi’s oldest multi-speciality hospitals. After conducting emergency scans, doctors found bleeding inside the head and informed the family that immediate surgery was necessary to save his life and prevent permanent damage. Fortunately, a visiting neurosurgeon was available.
With the family’s consent, the surgery was successfully performed. After about a week in hospital, he was discharged and continued his recovery at home. The hospital had earlier delisted the patient’s insurance company. The family was therefore advised to pay the hospital bill of nearly ₹12 lakh and later submit a reimbursement claim.
Following the hospital’s advice, they submitted all the required documents, including discharge summaries, investigation reports and bills. While the claim was under process, the annual renewal of the policy became due in January. The family was advised to keep the policy active and renewed it until 2027, hoping the claim would be settled soon. Instead, soon after the renewal, they received a letter rejecting the claim.
The reason cited was “non-disclosure” of a skin ailment for which treatment had been completed years earlier. The condition had no connection whatsoever with the sudden medical emergency that required life-saving brain surgery. This is not being narrated merely as a personal grievance. It reflects the experience of thousands of policyholders who believe that rejection of genuine claims has become increasingly common.
What was intended as an exception to prevent fraud appears, in many cases, to have become a routine practice. Since economic liberalisation in the early 1990s, India’s healthcare and insurance sectors have expanded significantly. Successive governments have introduced reforms to improve access to healthcare.
The BJP-led government under Prime Minister Narendra Modi has strengthened several schemes, with Ayushman Bharat–PM-JAY emerging as a lifeline for millions of families that cannot afford expensive treatment. Like any welfare programme, health insurance schemes are vulnerable to misuse. There have been cases where hospitals and middlemen exploited insurance programmes by carrying out unnecessary procedures to raise false claims.
Such fraud deserves strict punishment, and guilty hospitals must be blacklisted. However, isolated cases of fraud cannot become an excuse to deny genuine claims. When a family is forced to decide within minutes whether to proceed with life-saving surgery, its only concern is saving a loved one’s life—not how an insurance company may later interpret an old medical record.
The government has also opened the insurance sector to greater private and foreign participation. This is a welcome reform, given India’s growing healthcare needs. However, liberalisation must be accompanied by stronger regulation and greater accountability. Insurance companies enjoy the benefits of a growing market, but they must also honour their commitments to policyholders. Insurance companies collect substantial premiums year after year.
Yet many policyholders complain that valid claims are rejected on technical or trivial grounds. According to recent IRDAI data, nearly one in twelve health insurance claims is rejected for various reasons. While fraudulent claims must certainly be prevented, genuine policyholders should not be treated with suspicion during medical emergencies.
It is time for both the Government and the Insurance Regulatory and Development Authority of India (IRDAI) to introduce stronger safeguards against arbitrary claim rejections. Equally important, insurers should not be allowed to accept renewal premiums year after year without seeking updated medical information, only to invoke alleged non-disclosure when a major claim is made. Fairness demands that the responsibility to verify information should not rest entirely on the policyholder after years of uninterrupted renewals.
Health insurance should provide peace of mind during life’s most difficult moments. It should never become another battle that families are forced to fight after they have already fought to save the life of someone they love.
What Mr. Nagarajan narrated about health insurance is absolutely true. Insurance companies generally do not ask policyholders to submit updated medical reports at the time of renewing their policies.
Health insurance is primarily taken to provide financial support during unforeseen illnesses or medical emergencies. However, there are many situations where serious illnesses such as cancer, heart disease, or other medical conditions are diagnosed only after they have progressed to a certain stage. Until then, neither the patient nor the family may be aware of the illness.
If insurance companies reject genuine claims on the grounds of non-disclosure in such cases, the very purpose of taking a health insurance policy is defeated. Policyholders pay premiums in good faith with the expectation that they will receive support when they need it most. Fairness and empathy should guide the settlement of genuine claims, especially when there was no deliberate attempt to conceal any medical condition.