Published Mar 11, 2026 | 9:33 AM ⚊ Updated Mar 11, 2026 | 9:33 AM
Total health insurance premiums across the industry grew 9.19 percent in FY2024–25.
Synopsis: Months after the Union government made health and life insurance tax-free in September 2025, most policyholders have yet to see any relief, a nationwide survey of over 54,000 respondents has found. Many reported steep premium increases, rejected or partially approved claims, and hospital discharge delays stretching well beyond regulatory timelines.
Months after the Union government declared health and life insurance tax-free in September 2025, consumers have yet to receive any benefits, a nationwide survey by LocalCircles has found.
Instead, policyholders said steep premium hikes, rejected claims, and discharge delays stretching past 24 hours have increased the burden.
The survey gathered over 54,000 responses across 323 districts in India. Of the respondents, 41 percent were from tier-1 cities, 32 percent from tier-2 cities, and 27 percent from tier-3, tier-4, tier-5, and rural districts.
“Over 7 in 10 health insurance policyholders confirmed that their premium increased between 50 percent and 200 percent cumulatively over the last three years,” the survey said.
One in five policyholders saw their premium more than triple between 2022 and 2025, while 10 percent of respondents reported a modest increase of up to 25 percent.
The Insurance Regulatory and Development Authority of India (IRDAI) said the surge is due to medical inflation and rising claim costs.
Total health insurance premiums across the industry grew 9.19 percent in FY2024–25, reaching ₹1.27 lakh crore. In FY2024, insurers registered over 3 crore health insurance claims worth about ₹1.2 lakh crore. Of these, around 2.7 crore claims were settled, amounting to ₹83,493 crore.
IRDAI has since capped annual premium increases for senior citizens at 10 percent per policy year and requires insurers to seek prior regulatory approval before crossing that threshold.
Complaints received by LocalCircles show some insurers crossed the cap regardless. No such cap exists for other age groups. Insurers remain subject only to actuarial standards and regulatory oversight, with no ceiling on how much they can raise premiums at renewal.
The industry, meanwhile, has attributed the premium increases to commercial and actuarial considerations, including the repricing of older or loss-making product portfolios.
IRDAI has reiterated that premium increases must be actuarially justified, based on credible claims experience, and clearly communicated to policyholders at renewal.
The regulator has also encouraged insurers to negotiate standardised treatment package rates with hospitals to help contain underlying healthcare costs.
Higher premiums might feel more justified if the claims process worked as promised. The survey shows it does not.
Of the 18,989 respondents who filed a health insurance claim between 2023 and 2025, only 32 percent received full approval without complications. Another 9 percent received full approval only after sustained back-and-forth with their insurer.
“Fifteen percent of claims were rejected for invalid reasons, and 29 percent were only partially approved for invalid reasons,” the LocalCircles survey said.
In total, over four in 10 policyholders who filed a claim said their insurer either rejected it or reduced the approved amount without valid justification.
The findings point to insurers using partial approvals and invalid rejection grounds to limit payouts, despite directives from IRDAI. The regulator bars insurers from conducting fresh underwriting at renewal to penalise policyholders with prior claims and from unilaterally altering fundamental policy terms.
Health insurance complaints rose 41 percent to 1,37,361 in FY2025, driven by claim rejections, delays, and partial settlements. More than half of all grievances handled by insurance ombudsmen involved health insurance claims. Claims worth ₹15,100 crore were disallowed in FY2024, and insurers repudiated claims worth ₹10,937 crore outright.
On top of claim rejections, policyholders faced another pressure point: leaving the hospital.
The IRDAI mandates that cashless authorisation requests must be approved within one hour, and discharge authorisations finalised within three hours of receiving the necessary documents from hospitals. The survey shows the mandate routinely goes unmet.
“Five in 10 health insurance policyholders who filed a claim in the last three years said it took between six and 48 hours for their claim to be approved and for them to be discharged from the hospital,” the survey said.
Seven percent of respondents waited between 24 and 48 hours. Only 8 percent said their claim was processed without delay. The gap between the three-hour regulatory mandate and the reality of six to 48-hour waits shows systematic non-compliance that IRDAI has yet to enforce with sufficient rigour.
LocalCircles said it will submit the survey findings to IRDAI and request two interventions: compliance audits on the three-hour cashless processing mandate and spot checks to verify adherence to the 10 percent annual premium cap for senior citizens.
(Edited by Dese Gowda)
