KOCHI: You’ve paid your premiums year after year, perhaps even topped up your health insurance policy believing you’re prepared for life’s medical emergencies. But when illness strikes, what greets you isn’t reassurance – it’s rejection.
Thousands of health insurance policyholders across India are facing a frustrating reality – that having insurance doesn’t necessarily mean having support.
From unexplained deductions and confusing sub-limits to vague clauses like “customary and reasonable charges,” insurers often fall back on legalese to reduce payouts – if not deny them altogether.
For the average citizen, contesting these decisions can be daunting. After all, how many have the means – or the stamina – to drag a corporate giant (insurance company) to court?
And yet, that’s precisely what an 83-year-old Mumbai businessman recently had to do when his insurer rejected a claim for cancer treatment, citing his “occasional alcohol use” as the reason.
In a rare move, the Bombay High Court came down heavily on both the insurer and the insurance Ombudsman, which had upheld the denial.
The court maintained that there was absolutely no evidence linking his lifestyle to the illness and hence rejection of his health insurance claim was baseless.
But while this ruling offers a glimmer of hope, it also raises a question that cuts to the heart of India’s healthcare financing: Why does one need to go to court to get what is contractually promised?
Court to the rescue
The Bombay High Court found no evidence linking his drinking to his cancer and reprimanded both the insurer and the Ombudsman for their flimsy reasoning. But while the ruling restores a single policyholder’s faith, it also casts a sharp spotlight on a system where justice arrives too late, if at all, for most.
This one court intervention may have reversed an injustice. But how many people – especially the elderly, the under-informed, the critically ill – can afford to fight back?
For most policyholders in India, securing a health insurance claim feels like chasing a holy grail: advertised with glittering promises but riddled with exclusions, ambiguities, and hidden traps.
When insurance isn’t assurance
Despite the proliferation of health plans and glossy advertising, real-world experiences of policyholders paint a sobering picture. From hospitalisation clauses to room rent caps and restrictive sub-limits, here’s how policies often fall short:
24-hour hospitalisation clause
Insurers typically refuse to cover treatments unless the patient is hospitalised for over 24 hours. That rules out many high-cost diagnostics and procedures – even chemotherapy cycles or minor surgeries that are completed within a day, especially at a time when technology has simplified and shortened procedures, but at a cost.
Sub-limits within sum assured
Even if you’ve bought a Rs10 lakh policy, your payout might be capped at Rs1 lakh for cataract, Rs2 lakh for a particular cancer, or even less for other conditions – thanks to ‘fine-printed’ sub-limits that few notice while signing up the insurance contract..
Room rent capping
This is a little-understood clause that can drastically reduce your claim. If your policy permits only Rs3,000/day for room rent but you’re admitted in a Rs5000/day room, the insurer may proportionally reduce all related charges – doctor fees, surgery, and even tests – arguing those would’ve been lower in a cheaper room.
Pre-existing disease and waiting periods
A waiting period of up to four years for pre-existing conditions is standard. Even if your top-up kicks in, it might not cover ongoing illnesses.
Restoration benefit
Sounds good on paper – it restores your sum insured if exhausted. But it usually doesn’t apply for the same disease in the same policy year.
Co-payment clauses
Senior citizen policies often come with a 10 per cent to 30 per cent co-pay clause, meaning you pay a part of every claim from your pocket.
Cashless vs. reimbursement: If the hospital is not in your insurer’s network, cashless approval is denied, and you must front the entire amount before seeking reimbursement.
Daycare confusion
While some procedures under 24 hours are covered under ‘daycare’, not all are. What counts as ‘daycare’ varies widely across insurers.
Customary and reasonable charges
This catch-all term lets insurers trim payouts. But who defines what’s reasonable and customery? Insurers do.
