9 Reasons Why Health Insurance Claims Get Denied and Tips to Avoid Them

A health insurance policy can easily turn out to be one of our best pals during times of crises, helping us avoid sudden financial burdens and getting us through the doors at some of the best medical facilities there are. Technically speaking, these policies serve as a contract between the insurer and the insured, and when a sudden situation arises, a claim can be made against a subscribed health insurance plan to get the requisite funds and services, and in most cases, the claims are settled on a priority basis. 

Well, as you may have noticed, we have used the term “most” as there are certain cases in which a claim against a policy might get rejected, and when such a case does take place, the mental agonies that one might have to face, get amplified significantly. If you are someone who wants to avoid such a health insurance debacle, you must be aware of the various factors as to why a claim might get rejected, and try to avoid making such mistakes. 

In this blog, we will be taking a look at 9 of the primary factors why a claim against a pre-existing health insurance plan might get rejected and some of the best ways in which such issues may be remedied. So, let’s get started.

1. Lapsed Policies

If you are familiar with how health insurance plans work, you would be aware of the fact that they are valid only for a specific duration, say, maybe a year or so, post-which they must be kept updated through periodic premium payments. If you have failed to keep your policy validated, your claim will get denied, thereby landing you in a storm of issues. 

The best way in which you can keep such an eventuality from taking place is by setting up an effective auto-pay mechanism. This would help you make timely payments automatically. 

2. Late Intimations / Claims 

An insurance claim may get denied if you fail to inform your insurer within a specific amount of time regarding the necessities and requirements that you have. If you are going for an elaborate surgical or diagnostic process that has been planned in advance, inform your insurer about the same as soon as possible. Now, it is true that medical emergencies don’t announce their arrivals beforehand, but in such emergency situations, a claim submission within 24–48 hours would suffice. 

3. False Information

While applying for a health insurance plan, there are several facts that you must disclose to your insurer regarding yourself, and this can include everything from previous health conditions to annual salaries, and many more. A claim may get rejected if you fail to deliver the correct set of information to your insurer, and thus, it is best to deliver the right facts if you do not want your claim to get rejected once you have applied for the same. 

4. Disregarding the Exclusions

When it comes to medical insurance plans, there are many exclusions and clauses that are placed by the companies, and these are stuff that you must carefully consider before subscribing to a specific plan. Such exclusions can include everything from getting hurt during adventurous activities like skydiving or rafting, to excessive drinking on a regular basis. If you are someone who loves to live life on the edge, it would be a good idea to read the fine print before committing to a specific policy.

5. Ignoring the Waiting Period Requirements 

When it comes to specific insurance plans in this sector, one must bear the waiting period requirements in mind. There are certain illnesses or claim classes that might get released after the waiting period has been covered, and if you are to submit a claim before that period, it would get denied. The best way such a refusal can be avoided is by going through the various nitty-gritties of a plan before filing a claim. 

6. Exhausted Sum-insured Limits 

Health insurance plans feature specific sum limits, something that means that the company would be covering expenses only up to a certain limit, and what this means is that any claims that are submitted after that limit have been exhausted are likely to be refused. This can prove to be particularly catastrophic if you are to encounter a medical emergency. Thus, one of the best ways this can be avoided is by going for a health insurance plan that features a higher sum insured or keeping tabs on the actual amount being used. 

7. Going for Cashless Claims 

In 2023, there are a number of medical insurance companies in India that offer insurance plans that offer cashless services, i.e. you won’t have to pay out of your pocket while getting admitted to hospitals, but there is a catch here. It has mainly to do with the hospital that you are visiting. You see, your insurer would have a pre-existing network of hospitals working with them that offer cashless services. If you pick a hospital that doesn’t fall within that matrix, your cashless claim is likely to get refuted. 

If you are looking to avoid such an eventuality, the best thing would be to properly note the exact hospitals where such a service is being avoided, and update the said list from time to time. 

8. Wrongly-filled Applications 

Insurance companies are extremely particular about the claims that they receive on a regular basis, and you would be surprised to learn that many claims get rejected because they weren’t filled out properly. Yes, we do realize that it isn’t possible for everyone to be clearly familiar with the various formalities that must be taken care of while filling out a claim, and to that end, consulting someone who possesses proper knowledge about the procedures would be a good idea. 

9. Applying for Services That Are Not Covered

A single insurance plan wouldn’t cover every disease that’s known to man, and thus, understanding the exact diseases and services that are being covered beforehand is a good idea. In most cases, services like dentistry or AYUSH aren't usually covered, and if you are filing a claim for such a condition, the claim is likely to get rejected. 

Final Take

The aforementioned conditions are some of the most common cases in which an insurance company may deny a claim, and thus, it is essential for us to be aware of the factors that we must keep an eye out for. In this day and age, selecting the right health insurance plan doesn’t have to be a task, and a quick look online would help you zero in on one that would fit your requirements in the best possible manner.