A nationwide survey conducted by citizen engagement platform LocalCircles has found that health insurance policyholders in India are facing steep premium increases along with persistent difficulties in claim settlement. The survey, based on more than 54,000 responses from consumers across 323 districts, suggests that a large number of policyholders have experienced claim rejections or partial approvals while premiums have risen significantly over the past three years.
Recent data from the insurance regulatory and development authority of India (IRDAI) also indicate continuing challenges in health insurance claim processing and settlement, even as premiums have been rising across the sector. In FY23-24, insurers registered more than 30mn (million) health insurance claims worth approximately ₹1.2 lakh crore. Of these, about 27mn claims amounting to ₹83,493 crore were settled. This translates into a settlement rate of roughly 82% by number but only about 71.3% by value, suggesting that a significant portion of claims were either partially settled or rejected. Claims disallowed during the period amounted to about ₹15,100 crore, while claims worth around ₹10,937 crore were repudiated by insurers. The average claim amount stood at about ₹31,086, and nearly two-thirds of claims were processed through the cashless mode.
At the same time, consumer complaints related to health insurance have increased. Health insurance grievances rose by about 41% to 1,37,361 in FY2025, largely driven by issues such as claim rejection, delays and partial settlements. More than half of the grievances handled by insurance ombudsmen relate to health insurance claims, indicating persistent dissatisfaction among policyholders.
Despite these concerns, health insurance premiums have continued to rise. According to IRDAI data, total health insurance premiums increased by around 9.19% to ₹1.27 lakh crore in FY24–25. The regulator has attributed the increase primarily to medical inflation and higher claim costs. In response to concerns about steep increases, especially for senior citizens, IRDAI introduced measures to improve transparency and predictability in premium revisions. One such measure caps annual premium increases for senior citizen health insurance policies at 10% unless insurers obtain prior regulatory approval. Insurers are also required to consult the regulator before withdrawing senior citizen–specific products in order to ensure continuity of coverage.
IRDAI has reiterated that premium revisions must be actuarially justified and based on credible claims experience. Insurers are also required to clearly communicate the reasons for any premium increase at the time of policy renewal. The regulator has clarified that insurers cannot undertake fresh underwriting at renewal solely to penalise policyholders who have made claims and fundamental policy terms cannot be unilaterally altered during renewal cycles. At the same time, insurers have been encouraged to negotiate standardised treatment package rates with hospitals in order to contain underlying healthcare costs and moderate future premium increases.
Against this backdrop, citizen engagement platform LocalCircles conducted a nationwide survey to understand consumer experience with health insurance claims and premium increases. The survey was conducted after the platform received over a thousand complaints related to health insurance claims and premium revisions in the past year. It gathered more than 54,000 responses from consumers across 323 districts of India. Of the respondents, 67% were men and 33% were women. Around 41% were from tier-1 cities, 32% from tier-2 cities and the remaining 27% from tier-3, tier-4, tier-5 and rural districts.
The survey findings suggest that a significant number of policyholders faced difficulties in claim settlement. Among respondents who had filed a health insurance claim in the past three years, 15% said their claim was rejected with what they considered invalid reasons, while 29% said their claim was only partially approved for invalid reasons. Another 15% reported that their claim was partially approved for valid reasons. Around 32% said their claim was fully approved, while 9% stated that the claim was eventually approved but only after multiple interactions with the insurer. Taken together, the responses indicate that more than four in 10 policyholders who made claims in the past three years believe their claims were rejected or only partially approved for invalid reasons.
The survey also examined the time taken for claim processing at the time of hospital discharge. IRDAI guidelines state that cashless authorisation requests should ideally be approved within one hour and final discharge authorisation should be completed within three hours after hospitals submit the necessary documentation. However, survey responses suggest that delays remain common. Among 18,119 respondents who answered this question, 7% said the process took between 24 and 48 hours, while 15% said it took between 12 and 24 hours. Another 15% reported a processing time of 9 to 12 hours and 11% said it took between 6 and 9 hours. About 22% indicated that it took 3 to 6 hours, while 18% said the process was completed within 1 to 3 hours. Only 8% reported that the claim was processed instantly. Overall, the responses suggest that about half of the policyholders who filed claims experienced discharge delays ranging from six to forty-eight hours.
The survey also examined trends in health insurance premiums over the past three years. Among more than 17,000 respondents, 21% reported that their premiums had increased by 200% or more between 2022 and 2025. Another 11% reported increases of 150% to 200%, while 21% said their premiums rose by 100% to 150%. A further 21% reported increases of 50% to 100%, and 16% said their premiums increased by 25% to 50%. About 10% said the increase was limited to 0% to 25%. Overall, more than seven in ten respondents indicated that their premiums had increased between 50% and 200% over the past three years.
LocalCircles said it plans to share the survey findings with IRDAI and request further process reforms to ensure faster processing of cashless health insurance claims in line with the regulator’s timelines. The platform also suggested that audit or spot-check exercises be conducted to ensure compliance with the 10% annual premium increase limit applicable to senior citizen health insurance policies.
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