Top 5 Reasons Why Health Insurance Claims Get Rejected (And How to Avoid Them)
⚠️ Shocking Statistics
In 2024, 1 in every 7 health insurance claims was rejected in India. That's over ₹8,000 crores in denied claims. Most rejections are preventable with proper documentation and disclosure.
Having health insurance is not enough - you need to ensure your claims are approved when you need them most. Based on our experience handling 5,000+ claims, here are the top 5 reasons for rejection and exactly how to avoid them.
Reason #1: Non-Disclosure of Pre-Existing Diseases
Why It Happens:
Customers hide medical history thinking premiums will increase or they'll be denied coverage. When they later file a claim for a related condition, insurers investigate and reject the claim for "material non-disclosure."
Real Case:
Amit bought a ₹10L policy but didn't disclose his diabetes diagnosed 2 years ago. When he was hospitalized for kidney complications, the insurer reviewed his medical records, found his diabetes prescriptions, and rejected a ₹4.5L claim citing non-disclosure.
How to Avoid:
- ✓ Disclose EVERY medical condition from the past 5 years, no matter how minor
- ✓ Include ongoing medications, even if it's just BP or thyroid tablets
- ✓ Mention diagnosed conditions even if you no longer take medication
- ✓ Better to pay slightly higher premium than risk full claim rejection
Reason #2: Treatment During Waiting Period
Why It Happens:
Every health policy has waiting periods - initial 30 days, 2-4 years for specific diseases, and 3 years for pre-existing conditions. Claims filed during these periods are automatically rejected.
Initial Waiting: 30 days
No coverage except accidents. Don't buy insurance when symptoms start.
PED Waiting: 3 years
Diabetes, hypertension complications covered only after 3 years.
Specific Disease: 2 years
Cataract, hernia, joint replacement wait 2 years.
How to Avoid:
- ✓ Buy insurance early - don't wait for symptoms or diagnosis
- ✓ Read policy document to know exact waiting periods for your conditions
- ✓ For planned surgeries (cataract, knee replacement), buy 2+ years in advance
- ✓ Consider portability if moving to a new insurer to carry forward waiting period credits
Reason #3: Incomplete or Incorrect Documentation
Why It Happens:
Missing discharge summary, unsigned forms, bills without hospital stamp, or mismatch in patient details result in claim rejection or lengthy delays.
Essential Documents Checklist:
Before Admission:
- • Health card / Policy copy
- • Photo ID proof (Aadhaar)
- • Pre-authorization form (signed)
At Discharge:
- • Discharge summary (doctor-signed)
- • All original bills & receipts
- • Pharmacy bills itemized
- • Investigation reports
How to Avoid:
- ✓ Inform insurer within 24 hours of hospitalization
- ✓ Take photocopies of all documents before submitting originals
- ✓ Verify patient name matches policy document exactly (spelling matters)
- ✓ Get doctor's signature and hospital stamp on discharge summary
- ✓ Submit claims within 30 days of discharge (don't delay)
Reason #4: Treatment Not Covered Under Policy
Why It Happens:
Customers assume everything is covered, but standard policies exclude cosmetic procedures, dental (unless accident-related), infertility treatments, and more.
❌ NOT Covered (Usually):
- • Cosmetic surgery (nose job, liposuction)
- • Dental treatment (unless accident-caused)
- • IVF / Infertility treatment
- • Pre-existing conditions (first 3 years)
- • Congenital diseases (birth defects)
- • Self-inflicted injuries / suicide attempts
✓ Covered:
- • Hospitalization over 24 hours
- • Accident-related injuries (immediate)
- • Day-care surgeries (cataract, dialysis)
- • Pre & post hospitalization (60 days)
- • Ambulance charges (up to policy limit)
- • AYUSH treatments (in many plans)
How to Avoid:
- ✓ Read policy brochure - check "What's Not Covered" section carefully
- ✓ Clarify with advisor before treatment if unsure about coverage
- ✓ For planned surgeries, get pre-authorization to confirm coverage
- ✓ Add riders for maternity, dental, or OPD if you need them
Reason #5: Policy Lapsed Due to Non-Payment of Premium
Why It Happens:
Customers miss renewal deadline by days or weeks. When they file a claim, they discover the policy lapsed and their claim is rejected - even if they're willing to pay the overdue premium immediately.
Grace Period Rules:
Most insurers provide a 30-day grace period. If you pay within this window, coverage continues without break. After 30 days, policy lapses and you lose:
- • Waiting period credits (restart PED waiting for 3 years)
- • No-claim bonus / accumulated benefits
- • Continuity benefits for pre-existing conditions
How to Avoid:
- ✓ Set renewal reminders 15 days before expiry
- ✓ Enable auto-debit to avoid missing payment
- ✓ Save insurer's email/SMS alerts to primary inbox (not spam)
- ✓ If you miss deadline, renew within 30-day grace period
- ✓ Use portability option if unhappy with insurer - don't let policy lapse
What to Do If Your Claim is Rejected
Step 1: Request Written Rejection Letter
Insurer must provide specific reason for rejection in writing. Verbal denials are not valid.
Step 2: File Internal Grievance
Write to insurer's Grievance Officer citing policy clause. They must respond in 15 days.
Step 3: Escalate to Ombudsman
If unresolved, file complaint with Insurance Ombudsman (free service) within 1 year of rejection.
Step 4: Legal Recourse
For high-value rejections (₹5L+), consider consumer court. Success rate is 60%+ for valid claims.
Need Help with a Claim?
Our claims team prepares documentation, coordinates with hospitals, and tracks your claim until settlement. We've helped recover over ₹12 crores in initially-rejected claims.