• info@herculesadvisors.in
Facebook Twitter Youtube Instagram
Claim Here

Claim Rejection in Health Insurance

One of the most stressful experiences is receiving a notification that your claim has been rejected.

This blog simplifies what claim rejection means, the different types you might encounter, and why it happens so frequently in India.

  1. What is Claim Rejection in Health Insurance?

In simple terms, claim rejection is when an insurance company refuses to pay for the medical expenses you have submitted.

Technically, there is a difference between a Rejection and a Repudiation:

  • Rejection:Usually happens at the start of the process due to “clerical” or “procedural” errors (like a missing signature or wrong policy number). You can often fix these and resubmit.
  • Repudiation/Denial:This is a more serious, final decision where the insurer denies payment after a full review because the claim violates the policy terms (e.g., claiming for a procedure the policy doesn’t cover).
  1. Types and Reasons for Rejection

Insurance companies categorize rejections based on where the error occurred. Understanding these can help you avoid them.

Type A: Administrative & Procedural

These occur because the “rules of filing” weren’t followed.

  • Delayed Filing:Most insurers require you to intimate them within 24–48 hours of hospitalization. Filing after the deadline is a top reason for rejection.
  • Incomplete Documentation:Missing the original discharge summary, hospital bills, or pharmacy receipts.
  • Policy Lapse:If you forgot to pay your premium and the “grace period” has passed, the policy is inactive, and no claims will be honored.

Type B: Medical & Technical

These relate to the nature of the treatment itself.

  • Waiting Periods:Most policies have a 30-day initial waiting period and a 2–4 year waiting period for specific or pre-existing diseases.
  • Permanent Exclusions:Claims for things like cosmetic surgery, obesity treatment, or injuries due to adventure sports are usually excluded from standard plans.
  • Non-Medical Expenses:Charges for “consumables” (gloves, masks, nebulizer kits) are often rejected unless you have a specific “OPD” or “Consumables” rider.
  1. Main Causes for Claim Rejection in India

The Indian insurance market has seen a surge in health policies, but rejection rates remain a concern. According to recent 2024-2025 data, here are the primary culprits:

Cause

Why it happens in India

Non-Disclosure of PED

The #1 reason. Many applicants hide history of Diabetes or BP to get lower premiums. Under new IRDAI rules, if you hide it, the insurer can reject your claim for up to 5 years (the Moratorium Period).

Waiting Period Violations

Approximately 25% of rejections happen because policyholders try to claim for surgeries (like Cataract or Kidney stones) before the 2-year mandatory waiting period ends.

Unjustified Hospitalization

Insurers often reject claims if they feel the patient could have been treated as an “Outpatient” (OPD) and didn’t actually need a 24-hour hospital stay.

Inaccurate “Proposal Form”

Many Indians let agents fill their forms. If the agent makes a mistake in your age or medical history, the insurer views it as “misrepresentation” and rejects the claim.

Pro-Tip for 2026

Under the latest IRDAI (Insurance Regulatory and Development Authority of India) guidelines, the “Moratorium Period” has been reduced to 5 years. This means after 5 years of continuous coverage, an insurer cannot reject your claim for non-disclosure unless they can prove a massive, intentional fraud.

Scroll to Top