The illusion of protection is often more dangerous than the absence of it. In India today, that illusion is quietly thriving—inside lakhs of health insurance policies.
Over the past two decades, India has made significant strides in expanding access to healthcare financing. More Indians are insured today than ever before. Digital onboarding, tax incentives and bundled plans have made it almost as easy to buy a health insurance policy as it is to order a meal online.
But here’s the uncomfortable truth: many Indians are entering that transaction to ensure peace of mind—without realising that the protection they believe they’ve secured may not stand up when it’s needed most. And that is where the crisis begins,
Every year, lakhs of Indian families, already reeling under medical stress, are pushed into financial turmoil despite having health insurance. Not because the system is broken—but because the promises were misunderstood, the exclusions unseen and the fine print unread.
As a country, we have made tremendous progress in increasing access to health insurance. But along the way, we’ve also reduced it to a product on an itemized list: “Rs 10 lakh cover? Check. Tax benefit? Check.” What gets lost in this rush is perhaps the most critical part: what’s not covered.
And that’s not just a footnote—it’s a financial risk hiding in plain sight.
In 2025, we must ask a hard but necessary question. The comfort of being insured is real. But is the coverage? Are we buying protection—or just the idea of it?
Rs 7,500 crore in claim rejections: What went wrong?
According to the IRDAI Annual Report 2023, Indian health insurers rejected claims worth over Rs 7,500 crore. That’s not a typo. And these weren’t largely due to fraud or documentation lapses—they were denied because the policies had exclusions, waiting periods, sub-limits or simply because customers didn’t fully understand what they had signed up for.
The NITI Aayog’s Health Account Report shows that 55 percent of insured Indians don’t know what their policy excludes. That’s more than half of us.
This isn’t a gap in service—it’s a gap in awareness.
Families discover these exclusions at the worst possible time: in the emergency room. When the doctor says robotic surgery is the best option, only to hear from the insurer, “That’s not covered.” When covering the cost of treatment for a chronic illness is ruled out because it was a pre-existing condition. Or when an ICU claim is halved because the room rent limit was exceeded.
Also read | AYUSH health insurance: Understand the nitty-gritties before making a claim
We’re not failing at coverage. We’re failing at conversation.
Insurance today is still sold like a commodity: fast, transactional, benefit-heavy. But a policy is not a product. It’s a promise. And for that promise to hold, both parties—insurer and policyholder—need to be on the same page.
Unfortunately, that page is usually buried deep in the fine print.
Let’s bring some of that print into focus.
Pre-existing conditions: Often subject to waiting periods, even if disclosed.
Maternity care: Not always included, and when it is, there may be limits and delays.
Modern treatments: Robotics, advanced therapies or genetic testing may be outside the scope in traditional plans.
Mental health: Still inconsistently covered despite regulatory pushes.
Room rent limits: Breaching this limit can affect the entire claim—not just the room cost.
OPD & diagnostics: Basic outpatient expenses are often excluded altogether.
Also read | How to get the right health policy, hassle-free claim settlement
The good news: This is avoidable
This isn’t meant to spark fear—it’s meant to inspire action. And the good news is, being a well-informed policyholder doesn’t require an insurance background. It just needs a few conscious steps.
- Ask for the full policy document. Not the brochure. The actual terms.
- Start with exclusions. Know what’s not covered before celebrating what is.
- Decode the jargon. Sub-limits, co-pays, waiting periods—they matter.
- Review annually. Marriage, childbirth, ageing parents—all change your risk profile.
- Talk to your family. In an emergency, it’s often your loved ones handling the paperwork.
The shift we need: From transaction to trust
2025 is the year we need to stop treating health insurance as something to be ticked off a list and start treating it as an evolving partnership. One that grows with your life, just like your financial goals, aspirations or relationships.
Yes, the regulator has taken progressive steps—from e-insurance accounts and standardised claim formats to the portability of policies. Insurers, too, are introducing more advanced and comprehensive plans, curated with the customer at the heart—and they must continue to do so. But the responsibility cannot rest with insurers or the regulator alone. You, the consumer, must also show up to the table—curious, cautious and committed.
Because the real cost of ignorance isn’t just money—it’s time, choices and dignity.
So don’t just buy insurance. Understand it. Question it. Engage with it. That’s how you make it work for you—not just when tax season arrives, but when life does.
In the end, insurance isn’t just about being covered. It’s about being prepared.
The writer is joint chairman and managing director, Bajaj Capital.
Disclaimer: The views expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any decisions.
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