While health insurance is a crucial safeguard, claim rejections remain a daunting prospect for policyholders. Rejections often stem from a lack of comprehension or inadvertent mistakes in adhering to policy guidelines. Recent data analysis by Policybazaar sheds light on the prevalent reasons behind claim rejections, urging a closer examination of consumer awareness and policy understanding.
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Incomplete waiting periods
One prominent cause of claim refusal, accounting for over 18% of rejections, stems from filing claims before the completion of the waiting period. This underscores the significance of comprehending waiting periods within policies.
In health insurance plans, this is the period for which policyholders need to wait before getting the insurance benefits. It begins from the date of policy commencement, and the insured cannot claim health insurance benefits during this time.
Claims outside coverage
25% of rejections fall into this category, encompassing claims for non-covered ailments and non-payable outpatient or daycare procedures. This accentuates the necessity for policyholders to grasp the extent of their coverage and review policy documents before seeking treatment, Policybazaar said.
Wrongly filed claims and limit exhaustion
Instances of wrongly filed claims contribute to 4.5% of rejections, emphasising the need for enhanced customer guidance in the claims submission process. Similarly, while a relatively small fraction (2.12%) faces rejection due to exhausted limits, it underscores the importance of understanding policy limits and managing healthcare expenses accordingly.
Undisclosed pre-existing conditions and query reverts
A significant 25% of rejections stem from undisclosed pre-existing conditions. Additionally, over 16% of rejections occur due to unsubmitted query reverts, signalling a need for improved communication between insurers and policyholders.
Unjustified hospitalisation
4.86% of claims face rejection due to unjustified hospitalisation, highlighting the necessity for policyholders to align hospitalisation needs with policy criteria.
| Reason for Rejection | Percentage |
|---|---|
| Incomplete Waiting Period | Over 18% |
| Claims Outside Coverage | 25% |
| Wrongly Filed Claims | 4.5% |
| Limit Exhaustion | 2.12% |
| Undisclosed Pre-existing Conditions and Query Reverts | 25% (Undisclosed Pre-existing Conditions), Over 16% (Query Reverts) |
| Unjustified Hospitalisation | 4.86% |
The analysis, Policybazaar said, stresses the role of high sum insured. Policies with higher sums insured tend to reduce claim rejections related to coverage limitations, non-payable claims, and limit exhaustion. Notably, a mere 2% of claims were rejected within the sum insured range of ₹50 lakh and ₹1 crore, while 53% faced rejection within the ₹5 lakh sum insured category.
These findings are based on the scrutiny of 30,000 rejected claims among approximately 2 lakh claims from April 2023 to September 2023, the insurance aggregator said.
What to do in case of denials?
There are several options available that policyholders can use and make their voices heard in case of denials. The policyholder can approach the grievance officer of the insurance company to understand the reasons why the claim was rejected. He/she can raise a complaint in writing along with the necessary supporting documentation and then take a written acknowledgement of the complaint with the date.
If not satisfied with the answer from the grievance offer, the customer can approach the Insurance Regulatory and Development Authority of India (IRDAI) and take up the complaint with the IRDAI Grievance Call Centre. They can even go to the insurance ombudsman or seek legal action if the insurer's responses don’t satisfy the policyholder.
(Edited by : Amrita)
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