Insurance

What actually decides whether a health insurance claim gets paid

After assisting more than a hundred health claims a year, the pattern is clear: outcomes turn on disclosure, the five-year moratorium and room-rent limits — not on the things people worry about when they buy the policy.

19 September 2026 · Raja Banka · RHB Wealth Pro, Salt Lake, Kolkata

We assist with more than a hundred health insurance claims a year, and have done for two years running. Almost none of them turn on the things people worry about when they buy the policy. Here is what actually decides the outcome.

The five-year line

Under IRDAI's 2024 health insurance master circular, once a policy has run for five continuous years, the insurer can no longer dispute a claim on the grounds that something was not disclosed when the policy was bought. This is the moratorium. After it, only proven fraud reopens the question, and the burden of proving it sits with the insurer.

Which means the risk window is the first five years — and it is almost entirely a disclosure problem, not a medical one.

Disclosure is the whole game

The most common reason a claim gets contested inside that window is something the proposer did not mention: a blood pressure prescription, a decade-old surgery, a consultation that seemed irrelevant. People leave these out to keep the premium down, or because they genuinely forget.

An insurer that has been told about a condition and has priced for it will pay. An insurer that discovers it for the first time on a discharge summary will ask questions. Disclosing more makes the policy cost slightly more and makes it far more likely to work.

A declared condition is an underwriting decision. An undeclared one is a claims dispute.

Room rent, and the sting in the tail

Where a policy caps the room category, exceeding that cap rarely costs you only the room difference. Many policies then apply a proportionate deduction across the entire bill — surgeon's fees, theatre charges, consumables — in the same ratio. A family that upgrades the room by a few thousand rupees a night can find a large share of a much bigger bill disallowed.

This is written into the policy wording and it is not negotiable at the hospital counter. It is worth knowing which category your policy entitles you to before anyone is admitted.

The timelines you can hold an insurer to

The 2024 circular also put clocks on the process. Worth knowing, because hospitals do not always volunteer them:

• One hour for a cashless decision on a planned procedure.
• Three hours for a cashless decision in an emergency.
• Three hours for final authorisation once the discharge summary has gone in — the rule that ends the old ritual of waiting all afternoon in a vacated room.
• Thirty days for a decision on a reimbursement claim, from complete papers.
• Thirty days free-look from receipt of the policy document, to return it.

What we actually do

Mostly we make sure the file is complete before it goes in, and we make the calls the family should not have to make from a hospital corridor. A claim assisted properly at the point of admission almost never becomes a dispute three weeks later.

Questions this raises

Can an insurer reject a health claim for non-disclosure after five years?

No. Under IRDAI's 2024 health insurance master circular, once a policy has run for five continuous years the insurer cannot dispute a claim on grounds of non-disclosure of pre-existing conditions. Only proven fraud remains actionable, and the burden of proving it rests with the insurer.

Why was only part of my hospital bill paid when I upgraded the room?

Many policies that cap the room category apply a proportionate deduction across the whole bill — surgeon's fees, theatre charges and consumables — in the same ratio by which the room rent was exceeded. The shortfall is therefore usually far larger than the room-rent difference alone.

How quickly must an insurer approve a cashless claim in India?

Under the 2024 IRDAI master circular, a cashless decision is due within one hour for a planned procedure and within three hours in an emergency. Final authorisation must follow within three hours of the discharge summary being submitted. Reimbursement claims must be decided within thirty days of complete documentation.

Should I disclose a minor pre-existing condition when buying health cover?

Yes. A declared condition is priced by the underwriter at the outset; an undeclared one becomes a claims dispute later. Disclosure typically raises the premium slightly and materially improves the likelihood that the policy pays when it is needed.