India’s health insurance policies may fall short as claims for serious illnesses surge and treatment costs escalate, prompting experts to advise higher coverage buffers and policy reassessment.
A health insurance policy that looks comfortable on paper can still leave families exposed once serious illness and medical inflation are taken into account, according to a Policybazaar analysis cited by Business Standard. The report says the average cancer and tumour claim rose to Rs 5.55 lakh between 2021 and 2026, up about 81% from Rs 3.1 lakh five years earlier, while claims linked to heart disease, hypertension and stroke averaged Rs 2.08 lakh.
Siddharth Singhal, head of health insurance at Policybazaar, told Business Standard that the real out-of-pocket burden depends on far more than the headline sum insured. Room-rent limits, co-payments, deductibles and sub-limits can all change how much of a hospital bill is actually covered, even when the policy appears generous.
That point matters because treatment costs are rising quickly. Policybazaar’s report says cancer has seen the steepest claim inflation among major disease categories, with costs increasing by about 10% to 14% a year. In Tier-I cities, the average hospital claim was Rs 1.73 lakh, compared with Rs 1.20 lakh in Tier-III cities, underlining how location can affect the adequacy of cover.
The report also shows that a hospital bill is rarely just about surgery. For cancer and blood-related conditions, surgery accounted for 32% of the bill, but medicines made up 16%, investigations 9% and miscellaneous expenses 18%. For heart and blood-pressure-related cases, miscellaneous charges were 25%, while surgery was again 32%, with medicines and investigations adding further costs. Singhal said consumers should not assume that insurance for the procedure alone means the full stay is protected.
Policybazaar argues that families in metros should think beyond a simple Rs 5 lakh or Rs 10 lakh policy and consider a much higher overall buffer, often through a base plan plus a super top-up. The report says 26- to 45-year-olds accounted for 56% of all claims in its study, which also challenges the idea that health cover can wait until later life. Singhal said younger consumers often rely too heavily on employer cover or delay reassessing their policy, even as family size, age and medical risks change.
The warning comes as claim outcomes remain uneven. Policybazaar’s consumer study found India’s Health Claims Index stood at 82.8, with cashless claims scoring better than reimbursement claims. Separately, data cited by the Economic Times from the Insurance Regulatory and Development Authority of India showed health insurers disallowed claims worth Rs 15,100 crore in 2023-24, while only 71.29% of the Rs 1.17 lakh crore in claims filed were paid. Together, the figures suggest that the gap between having insurance and actually being protected can be wide.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
