Daybreak Why your health insurance works great — until you need it
Apr 5, 2026
A deep dive into why health insurance payouts often fail when you most need them. Stories of claim denials, agent mis-selling, and hospitals keeping prices opaque. An examination of thin insurer margins, delayed reimbursements and investigative hold-ups. A look at how weak regulation and perverse incentives push up bills and frustrate policyholders.
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Stitches And A Misfilled Form Led To Denied Claims
- Soumya's minor increase from six to nine stitches led her hospital to revise the bill and the insurer to reject the higher claim.
- Payal's agent wrote 'one year' instead of '15 years' of diabetes, which later caused the policy to skip the pre-existing condition and invite denial.
Claim Rejections Are Systemic And Rising Fast
- In FY2025 Indian health insurers rejected claims worth ₹30,000 crore and nearly one in eight claims were denied or left pending.
- Of 37 million claims, 4.6 million were denied or pending, and grievances rose 41% with several insurers seeing over 20% increases.
Agents’ Misreporting Explains A Quarter Of Rejections
- Non-disclosure and mis-selling are prime reasons for rejections; independent consultant Avigyan Mitra found non-disclosure accounts for ~25% of rejected claims.
- Agents sometimes deliberately under-report conditions to secure faster commissions, making insurers legally liable for agent actions.