When Does a Health Insurance Claim Get Rejected?

Let’s start with a small example. Raj purchased a health insurance plan for himself and duly paid all the premiums to avail of its benefits. Suddenly one day, he bumps into a door and injures his toes. He goes to the hospital and is treated in the outpatient department. He raises a claim under his health insurance plan, but it got rejected because OPD treatments were not included in his policy. Many standard health insurance plans exclude OPD treatments unless an additional OPD cover is purchased. As a result, he had to pay for all his medical expenses himself.

So, what you can surmise from the example is that just owning health insurance isn’t enough. You should also be aware of the reasons that can lead to your claim getting rejected by the insurer, so you are not caught off guard at the time of the claim. You surely don’t want to pay your medical bills from your own pocket even after having a health insurance plan!

In this article, we will discuss some common reasons that can lead to the rejection of your claim. Read on!
 

When Does A Health Insurance Claim Get Rejected?

The possible reasons for your claim getting rejected are -

Not Being Aware of the Claim Process
A health insurance claim is basically a request made by you to your insurance company to cover your medical expenses. There are two types of claims processes - cashless & reimbursement - each with its own set of procedures and documents.

1. Cashless Claim
   A health insurance claim is basically a request made by you to your insurance company to cover your medical expenses. There are two types of claims processes - cashless & reimbursement - each with its own set of procedures and documents
    
2. Reimbursement Claim
   You need to pay the medical bills yourself. Once your treatment is complete, you are required to submit the necessary bills and documents to the insurer. The insurance company reimburses your expenses after they have been verified and approved.
   To make a claim, you need to follow the steps diligently, submit the required documents, and fill up the application forms correctly. In case you miss out on any essential document or incorrectly fill out the form, your claim might get rejected.
    

Not Renewing Your Policy On Time

The validity of a health insurance policy may vary. It can be 1, 2, 3 years etc. - depending on the insurer and the product. So, to ensure that your health insurance coverage remains active and doesn’t lapse, you need to renew your plan on time by paying the due premium. If your policy has expired and you raise a claim, it may be rejected. However, insurers usually offer a grace period for renewal, during which coverage may continue.
 

Making A Claim During The Waiting Period

A waiting period is the time frame during which the insurer will not provide coverage for specific conditions or treatments. You won’t be able to raise a claim during the waiting period

The types of waiting periods are -

1. 30-day Initial Waiting Period:
   A 30-day initial waiting period applies to all treatments, excluding accidents.
    
2. Waiting Period for a Specific Illness or Treatment
   A 2-4 years waiting period is imposed on conditions like hernias, haemorrhoids, chronic kidney disease, etc.
    
3. Pre-Existing Disease Waiting Period
   A pre-existing disease (PED) is defined by the IRDAI as any medical condition that has been identified or treated within four years of purchasing health insurance. PEDs usually have a waiting period of up to 3 years, as per the latest IRDAI guidelines.

For example, Samir purchased a health insurance plan in January 2026 which had a waiting period of 2 years for pre-existing diseases. Samir already had diabetes and was taking medications for the same. Therefore, diabetes was considered a PED. Any claims related to diabetes will only be covered after the completion of the waiting period of 2 years, i.e., after January 2028.
 

Choosing A Hospital Room Beyond Your Eligibility

When you purchase a health insurance policy, you may be subjected to a room rent limit. This limit is basically the maximum amount that your insurer will pay per day for the hospital room in case you’re hospitalised for an ailment, injury, or accident. If you choose a room that costs more than what you are eligible for, your insurer will deduct the difference in the room charge and proportionately deduct associated medical expenses. If you choose a room that costs more than your eligibility, your insurer may apply proportionate deductions to associated medical expenses, leading to a reduced claim settlement.

For instance,

Pia owns a health insurance plan with a sum insured of Rs. 4 Lakhs and a daily room rent limit of Rs. 2,000. She undergoes a one-day surgery and chooses a room costing Rs. 4,000 per day. Her total hospital bill is Rs. 1 Lakh.

Since she chose a room beyond her eligibility, proportionate deduction will apply only to certain associated medical expenses (like doctor fees, nursing, OT charges). Other costs like pharmacy, implants, diagnostics are usually not proportionately reduced as per IRDAI product filing norms.

Step 1
Proportionate ratio = Eligible Room Rent / Actual Room Rent
= 2,000 / 4,000 = 50%

Step 2
Total Bill = Rs. 1,00,000

• Associated medical expenses (subject to proportionate deduction) = Rs. 60,000
• Other expenses (not proportionately deducted) = Rs. 40,000

Step 3
Eligible Room Rent Paid = Rs. 2,000
Associated Medical Expenses Paid = 50% of Rs. 60,000 = Rs. 30,000
Other Expenses Paid = Rs. 40,000

Step 4
Total Claim Paid = Room Rent + Reduced Associated Costs + Other Costs
= 2,000 + 30,000 + 40,000 = Rs. 72,000

Step 5
Out-of-pocket = Total Bill − Claim Paid
= 1,00,000 − 72,000 = Rs. 28,000
So, Pia will have to pay Rs. 28,000 from her own pocket despite having a Rs. 4 Lakh cover, mainly because she selected a room beyond her eligible limit, which triggered proportionate deductions.
 

Caps On Diseases

Exclusions Under The Policy

Conclusion

A health insurance policy is like an umbrella during the rainy season. It provides you coverage in times of need. We hope the factors discussed above gave you an idea about why your claim can be rejected. Keep them in mind and carefully read through your plan’s T&Cs to avoid any nasty surprises down the road!