Health insurance is supposed to provide you with comfort. When you or your family go through a health crisis, you want to focus on treatment rather than worry about unexpected hospital bills. Unfortunately, many policyholders get hit the hardest with the real surprise when their health insurance claim gets denied.
A denied claim can derail your financial planning and cause you frustration after having paid premiums for years. Fortunately, the majority of denials could have been avoided if there had been a clear understanding of the reasons for the rejections and a way to prevent them.
In this blog, we will cover the top 9 reasons for health insurance claim rejection, offer some suggestions to avoid denials, and explain how to approach what happens next with a denied claim.
Understanding Health Insurance Claim Rejection
A health insurance claim rejection occurs when your insurer refuses to settle your medical bills under your policy. This may happen for several reasons—sometimes due to genuine policy conditions, and at other times because of avoidable mistakes in paperwork or delays in communication.
Insurance companies follow strict guidelines to evaluate each claim. They review your medical history, the treatment you have received, policy terms, waiting periods, and the documents you have submitted before approving payment. If any red flags arise, the claim may be rejected in full or in part.
According to industry reports, the health insurance claim rejection ratio varies across insurers, but many rejections stem from the same common reasons. Let’s explore these in detail.
Top 9 Reasons for Health Insurance Claim Rejection
Incomplete or Incorrect Documentation
One of the most common health insurance claim rejection reasons is missing or incomplete paperwork. Insurers require documents such as:
- Hospital admission and discharge summary
- Doctor’s prescription
- Medical bills and test reports
- Insurance claim form
- Treatment records
If you fail to submit all documents or if there are errors—like mismatched patient names, wrong dates, or unclear bills—the insurer may reject your claim.
Example: Mr. Sharma submitted his hospital bills but forgot to attach the discharge summary. The insurer kept asking for it, and due to the delay, his claim was rejected.
Tip to avoid: Always double-check the list of required documents from your insurer and keep copies of everything. Using the insurer’s Health Insurance Claim Procedure guidelines can help prevent mistakes.
Non-Disclosure of Pre-Existing Diseases
If you hide details about your medical history while buying a policy, it can backfire during a claim. Insurers consider this non-disclosure as a violation of trust. For instance, if you had diabetes before taking the policy but didn’t disclose it, and later raise a claim for a diabetes-related complication, the insurer may reject it.
Tip to avoid: Always disclose all pre-existing diseases honestly, even if it increases your premium. It’s better to pay slightly more than risk having your medical insurance claim rejected later.
Claim Raised During Waiting Period
Most health insurance policies come with a waiting period before certain illnesses or procedures are covered. For example:
- Pre-existing diseases may have a waiting period of 2 to 3 years.
- Specific treatments like hernia, cataract, or knee replacement may have a waiting period of 1 to 2 years.
- Maternity benefits usually come with a waiting period of 9 months to 3 years.
If you raise a claim during this time, it will likely be rejected.
Example: A woman who had bought a policy six months prior attempted to claim maternity expenses. Since her policy had a 12-month waiting period, the claim was denied.
Tip to avoid: Always check the waiting periods before filing a claim. If you’re unsure, confirm with your insurer.
Treatment Not Covered Under Policy
Every policy has specific exclusions. Treatments such as cosmetic surgery, dental procedures (unless accident-related), fertility treatments, or experimental therapies are often not covered.
If you file a claim for such treatments, it will be rejected.
Tip to avoid: Carefully read your policy brochure to know what is covered and what is excluded. Before undergoing any planned treatment, call your insurer’s helpline to confirm coverage.
Mismatched Information in Proposal Form
Small mistakes in your proposal form can cause big trouble later. Incorrect details like:
- Wrong age
- Misspelled name
- Incorrect gender
- Misstated lifestyle habits (like smoking or drinking)
These can lead to health insurance policy rejection reasons during claim processing.
Tip to avoid: Fill out your proposal form carefully and verify all details before submitting. If you change addresses or phone numbers, update them with your insurer.
Exceeding Sum Insured or Sub-Limit
Each policy has a sum insured (the maximum amount payable) and sub-limits (like room rent, ICU charges, or specific surgeries). If your claim exceeds these limits, the insurer will not pay the extra amount.
Example: Your policy allows a cataract surgery of ₹35,000 per eye, but you are undergoing surgery at ₹50,000. The insurer may reject the excess as sub Limit exhausted.
Tip to avoid: Choose a policy with adequate coverage and understand sub-limits clearly. If you need higher coverage, consider upgrading or opting for Health Insurance Add-On Covers.
Fraudulent or Misleading Claims
If an insurer suspects foul play—like fake bills, inflated charges, or treatments not actually taken—the claim will be rejected outright. In some cases, the policy itself may be cancelled.
Tip to avoid: Never submit false claims. Stick to genuine expenses and maintain transparency with your insurer.
Policy Lapse or Renewal Missed
If your policy has lapsed due to non-payment of premiums, you cannot file any claims. Even if the hospitalisation occurred just after the due date, the insurer has no liability.
Tip to avoid: Always pay premiums on time. Set reminders or opt for auto-debit options. Keeping your policy active is the simplest way to prevent rejected health insurance claims.
Tips to Avoid Health Insurance Claim Rejection
- Read your policy carefully: Familiarise yourself with the inclusions, exclusions, waiting periods, and sub-limits.
- Be transparent: Disclose all pre-existing illnesses and lifestyle habits.
- Maintain documents: Keep bills, prescriptions, and reports organised.
- Inform the insurer on time: Whether cashless or reimbursement, always notify them quickly.
- Choose the right hospital: Network hospitals simplify cashless claims.
- Update personal details: Ensure name, age, and contact details match across documents.
- Renew policies on time: Avoid lapses to maintain continuous coverage.
By following these steps, you can ensure smoother claim processing and reduce the chances of rejection.
What to Do If Your Claim Gets Rejected?
Even with precautions, sometimes claims get denied. Here’s what you can do:
- Ask for reasons in writing: Insurers must provide a written explanation for rejection.
- Submit missing documents: If rejection was due to incomplete paperwork, send the required files immediately.
- File a grievance : If you feel the rejection was unfair, raise a health insurance claim rejection complaint with the insurer’s grievance redressal team.
- Approach IRDAI or the Ombudsman : If the issue remains unresolved, escalate it to IRDAI or the Insurance Ombudsman.
Remember, rejection doesn’t always mean the end of the road. With proper appeal, If your claim is genuine and supported by proper documentation, it can still be approved.
Conclusion
A health insurance claim rejection can be stressful, but most cases happen due to avoidable mistakes like incomplete documents, non-disclosure of medical history, or policy lapses. By understanding the 9 most common reasons for rejected medical insurance claims and following simple precautions, you can protect yourself and your family from financial setbacks during medical emergencies.
Select the best health insurance policy, follow the correct Health Insurance Claim Procedure, and always monitor your health insurance claim rejection rate along with the health insurance claim settlement ratio when selecting insurers. With the proper preparation, your health insurance will serve its true purpose—providing peace of mind in tough times.
FAQ
As per IRDAI guidelines, insurers must communicate claim acceptance or rejection within 15 days of receiving all required documents.
No, claim rejection does not affect policy renewals. You can continue renewing your policy, but repeated rejections due to non-disclosure may impact your credibility.
Yes, insurers may approve the valid portion and reject only the non-payable part, depending on the case.
The reasons are mostly the same, cashless claims rejection occur before or during hospitalization and are often related to pre-authorization
Get Quote
Insurance is the subject matter of solicitation. IRDAI Registration Number - 134. CIN # U66010MH2007PLC166770.
Developed & Maintained by Universal Sompo General Insurance Co.Ltd