Why Health Insurance Claims Get Rejected

Health is wealth – this is what we've grown up learning. If you're a planner and believe in taking care of your health, you may already have invested in health insurance plan. Or, you may be on the lookout for the perfect health policy that covers all your concerns. But what would happen if you face a health emergency and your insurance claim gets rejected? That's not something anyone wants even to imagine. To be truly prepared for such a situation, you need to know the grounds on which health insurance claims can be denied. Let's take a look at some of the questions that may pop up in your mind.

What is a health claim?

A health claim is a formal request submitted by a policyholder to their insurance provider to cover medical expenses incurred due to illness, injury, or hospitalisation. These claims can be either cashless, where the insurer directly settles the bill with the hospital, or reimbursement-based, where the policyholder pays upfront and later seeks reimbursement.

When can an insurance claim be rejected?

Health insurance claims can be denied due to various reasons, including policy exclusions, incorrect documentation, or not following the claim filing procedures. Understanding these factors can help prevent unnecessary rejection of claims.

10 common reasons for health insurance claim rejection

The most common reasons for the rejection of health insurance claims are:

1. Incomplete or Incorrect Documentation

For cashless claims, the insurer communicates directly with the network hospital you're treated in. So, in this case, you don't need to worry about missing out on any medical documents.

For reimbursement claims (in case you're treated at a non-network hospital), two scenarios can arise:

• Non-mandatory documents are missing – The insurer will still process your claim.
• Mandatory documents are missing - The insurer will remind you about the missing documents every 15 days, i.e. on the 15th day, 30th day, 45th day, and lastly on the 60th day. Post this final reminder; the claim will be rejected due to non-receipt of mandatory documents.

2. Conditions that are Excluded from the Policy

Health insurance policies have a list of exclusions that are not covered. If you've filed a claim for an ailment falling under these exclusions, then as per the policy terms and conditions this claim would not be accepted. To avoid any confusion at the time of undergoing treatment, we recommend going through the policy wordings thoroughly before purchase.

3. Non-Disclosure of Health Conditions 

Utmost good faith is one of the basic principles of insurance, and all insurance contracts are built on the factor of trust between both parties. When you apply for health policy, you need to disclose the pre-existing diseases that you have, if any. It helps the insurer assess the health risk for your plan correctly. Sometimes people worry about not getting insurance due to diabetes or hypertension, and hence they don't disclose such pre-existing conditions. However, if a claim arises due to such a condition, it may be rejected due to non-disclosure.

4. Pre-Existing Conditions

Some of the common assumptions are related to alcohol, diabetes, hypertension, heart disorders, cancers, etc. People think if they disclose a condition like this, their policy will be denied or claims will be rejected. Hence, they conceal such existing medical conditions while applying for insurance, as well as during hospitalization. This, in turn, may mislead the treating consultant in arriving at an appropriate diagnosis. It is advisable to discuss your health conditions openly with the insurance provider and find a policy that includes pre-existing health conditions.

5. Lifestyle Choices

Lifestyle choices don't directly affect your future claims. However, there are exceptions, such as, but not limited to, alcohol consumption, which impact the admissibility of the claim.

6. Amount of Claims Exceeding the Insurance Coverage

If you've already made a few claims in the policy year and your sum insured (the maximum amount available in the year as per your policy) is used up, then your subsequent claims may be denied. Opting for a higher sum insured is a better idea, especially if you're buying a single policy for the whole family. ICICI Lombard Health AdvantEdge Health Insurance also comes with a reset benefit, whereby we rest up to 100% of the sum insured within the same policy year, in case the sum insured is inadequate due to previous claims and the claim is for a new diagnosis. The reset benefit doesn't apply for the first claim of policy year.

7. Policy has Expired

If you miss the insurance renewal date and end up filing a claim on the expired policy, your claim will be rejected. Renewing the policy in time is crucial to ensuring you don't miss out on a claim during a medical emergency. Although there is a 15-day grace period for renewals, insurance companies usually don't service your claim during this period. So it's best to renew in advance and stay protected against any unexpected health concerns that need immediate treatment.

8. Alternative Medical Treatments not Covered by the Insurance

Most insurance companies, including ICICI Lombard, will not cover hospitalization expenses for evaluation or investigation only. Also, treatment taken at a healthcare facility which is not a hospital is not covered. When you're planning to undergo AYUSH treatment, be sure to choose a Government Hospital or any institute recognized by the Government and/or accredited by Quality Council of India/National Accreditation Board on Health.

9. Failing to File the Claim on Time

As per your policy terms and conditions, you would have a specific deadline to inform us about the hospitalization. If you've not intimated us or the TPA within the stipulated timeframe, your claim may be rejected. Typically you need to inform us 2-3 days in advance about planned hospitalizations. In case of emergency hospitalization, intimate us or the TPA within 24 hours.

10. Waiting Period Limitations

There is a 30-day initial waiting period on most health policies, except accident-related claims. The waiting period is 15 days for COVID-19 claims. There is also a separate waiting period of specified duration like 1 year, 2 years, or 3 years as per the customization of your policy. Most elective surgeries like cataracts, kidney stones, gall bladder stones, joint replacements, maternity-related, etc. fall under this condition. Read your policy documents thoroughly to know more.

Apart from the reasons we've covered, there may be other causes for claim rejection too. To avoid the pain of a denied claim, we recommend reading the policy documents thoroughly so that you're aware of all the terms and conditions. These documents clearly outline the inclusions, exclusions, and deductibles of the policy. Moreover, you must keep yourself informed about the claim process and have the contact numbers of your insurer/TPA handy for assistance.

10 tips to avoid rejection of health insurance claims

Here are 10 tips you can follow to avoid claim rejection in health insurance:

1. Read Your Policy Terms Carefully – Understand inclusions, exclusions, and claim procedures.
2. Disclose Medical History Honestly – Avoid claim denial by providing accurate details.
3. Ensure Timely Payment of Premiums – Keep your policy active to avoid automatic rejection.
4. Check the Waiting Period – Plan hospitalisations accordingly if your policy has a waiting period.
5. Use Network Hospitals for Cashless Claims – Choose hospitals listed by your insurer to simplify claims.
6. File the Claim Within the Specified Timeline – Delayed claims can be rejected outright.
7. Maintain Proper Documentation – Ensure medical bills, reports, and prescriptions are in order.
8. Opt for a Comprehensive Health Insurance Plan – Broader coverage means fewer exclusions.
9. Stay Updated on Policy Changes – Insurers update terms periodically, so review your policy annually.
10. Seek Assistance from Your Insurance Provider – Contact your insurer for any clarification regarding claims.

After taking the above steps, if your claim is still denied and you're not satisfied with the reason, you may provide a written complaint to the Ombudsman. You need to do this within 30 days of receiving a response from the insurance company.

How to claim your health insurance correctly?

Follow these steps for an error-free claim process:

1. Inform the Insurance Company – Notify your insurer immediately upon hospitalisation.
2. Collect All Relevant Documents – Keep hospital bills, doctor’s prescriptions, and medical reports.
3. Fill Out the Claim Form Accurately – Ensure all details match your medical documents.
4. Submit the Claim Within the Specified Period – Avoid unnecessary delays.
5. Follow Up with the Insurance Provider – Track your claim status and respond to any queries.

FAQs

1. Why do insurers conduct a verification process before approving claims?

Insurance providers verify claims to prevent fraudulent activities, ensure compliance with policy terms, and confirm that the claimed medical expenses are legitimate. This process safeguards the interests of both the insurer and policyholders by ensuring that only eligible claims are approved. Verification also helps determine whether the treatment falls under the scope of the chosen health insurance plan.

2. What steps should you take if your health insurance claim is denied?

If your claim is rejected, start by reviewing the insurer’s explanation for the denial. Cross-check the terms of your policy to understand whether the rejection is valid. Gather all necessary documents, such as medical reports and hospital bills, and file an appeal by submitting a formal request to the insurance company. You can also seek assistance from customer support or a claims expert for guidance on resolving the issue.

3. What are your options if your appeal for a denied claim is unsuccessful?

If your re-submitted claim is denied again, you can escalate the issue by filing another appeal with stronger supporting evidence. You may also contact the insurer’s grievance redressal officer for further resolution. If the rejection still seems unjustified, you can approach the Insurance Ombudsman or lodge a complaint with the Insurance Regulatory and Development Authority of India (IRDAI) for intervention.

4. Can providing incorrect or incomplete information result in claim denial?

Yes, submitting inaccurate or incomplete details is a major reason why health insurance claims get rejected. Errors in personal information, missing documents, or incomplete medical records can lead to denial. To avoid this, carefully review all details in the claim form and ensure that all required documents are properly submitted.

5. Does effective communication with the insurer help in preventing claim rejection?

Yes, maintaining clear communication with your insurance provider can significantly reduce the chances of claim denial. Inform your insurer about planned treatments or hospitalisations in advance, clarify your coverage before undergoing any procedure, and respond promptly to any queries regarding your claim. Keeping thorough records of all correspondence regarding your health insurance plan ensures a smoother claim process and minimises potential disputes.

6. Can I claim health insurance for senior citizens without pre-existing conditions coverage?

Yes, but it's advisable to choose a policy that includes pre-existing conditions to avoid rejections.

Conclusion

Understanding the reasons behind claim rejections and taking proactive steps can help ensure a hassle-free experience with your health insurance plan. Whether you’re securing coverage for yourself or opting for health insurance for senior citizens, staying informed and adhering to best practices can prevent claim denials and ensure timely medical assistance.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis, or treatment. Please consult your general physician or another certified medical professional for any questions regarding a medical condition. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.