Insurance claim rejected? How to challenge it
Ask for reasons, complain to the insurer and Bima Bharosa, then the free Insurance Ombudsman (claims up to ₹50 lakh, within a year) or consumer commission.
In short
- A rejection letter is not the last word. The insurer must give specific reasons in writing; ask for the exact clause and the documents relied on.
- Complain first to the insurer's grievance officer (you can track it on IRDAI's Bima Bharosa portal). If there is no reply in 30 days or you are unhappy, go to the Insurance Ombudsman.
- The Ombudsman is free, needs no lawyer, and hears claims up to ₹50 lakh. File within one year of the insurer's rejection or reply.
- A life policy in force for three years cannot be questioned on any ground, even non-disclosure Sec 45 Insurance Act. Health policies have a similar five-year (60-month) protection, except for proven fraud.
People buy insurance for their worst days: a hospital stay, an accident, a death in the family. When a claim is rejected at that moment, the family is left to borrow or sell. The common searches are "health insurance claim rejected what to do" and "how to complain to the insurance ombudsman". This guide answers both, step by step.
Why claims are rejected, and when that is wrong
- "Non-disclosure". The insurer says you hid an illness, habit or earlier policy when buying. This is the most disputed ground. A condition you did not know about, or one unconnected with the claim, is often not a fair basis.
- Exclusions and waiting periods. Policies exclude some treatments and cover pre-existing diseases only after a waiting period. Check whether the clause really applies to your treatment.
- Late intimation or missing papers. Courts and Ombudsmen have often held that a genuine claim should not fail only because it was reported a little late, if the delay is explained.
- Lapsed policy. Check the grace period: under IRDAI's health rules, 30 days for annual, half-yearly and quarterly premiums, and 15 days for monthly ones.
Protections the law gives you
Life insurance: the three-year rule
Under Sec 45, Insurance Act, 1938, no life policy can be questioned on any ground after three years from the date it was issued, the risk started, it was revived, or a rider was added, whichever is latest. Within three years, the insurer can reject for fraud or misstatement of a material fact only by communicating the grounds in writing. It cannot allege fraud if you prove that the misstatement was true to the best of your knowledge and there was no deliberate intention to hide it.
Health insurance: IRDAI's 2024 master circular
- Moratorium. After 60 months of continuous coverage, a health policy or claim cannot be contested for non-disclosure or misrepresentation, except for established fraud.
- Cashless speed. Insurers must decide a cashless request within one hour, and give final discharge authorisation within three hours of the hospital's request.
- No rejection without review. A claim can be rejected only with the approval of the insurer's claims review committee.
- No running around. The insurer or TPA (the third-party administrator that processes claims) must collect documents from the hospital, not make you chase them.
- Renewal. A policy cannot be refused renewal just because you made a claim earlier.
Step by step: challenging a rejection
- Read the rejection letter closely. Note the clause cited. If it is vague, write asking for the exact clause, the reasons, and copies of documents used against you, such as the proposal form and investigation report.
- Complain to the insurer's grievance officer. Give the policy and claim numbers and explain, point by point, why the rejection is wrong, with documents. You can also register it on Bima Bharosa, IRDAI's grievance portal, which forwards it to the insurer and lets you track it.
- Go to the Insurance Ombudsman. If the insurer rejects your grievance, replies unsatisfactorily, or does not reply within 30 days, file under the Insurance Ombudsman Rules, 2017. File within one year of the insurer's final reply. The claim must be up to ₹50 lakh. Apply online through the Council for Insurance Ombudsmen website (cioins.co.in) or at the Ombudsman office for your area, by letter or email, with copies of your documents. There is no fee.
- Attend the hearing. The Ombudsman first tries mediation. If that fails, it passes an award, normally within three months of receiving the complete complaint. The award binds the insurer, which must comply within 30 days; under IRDAI's 2024 health circular, an insurer that fails to implement an Ombudsman award in time must pay the policyholder ₹5,000 a day.
- Or go to the consumer commission. A wrongful rejection is a "deficiency in service" under the Consumer Protection Act, 2019. File within two years of the rejection. Claims up to ₹50 lakh go to the District Commission, above ₹50 lakh to ₹2 crore to the State Commission, and above ₹2 crore to the National Commission. You can file online on the e-Jagriti portal, and the National Consumer Helpline 1915 can guide you.
Kavita's father had a bypass surgery costing ₹4.2 lakh. The insurer rejected the claim, saying he had hidden "hypertension" when the policy was bought. But the policy had been running for six years. Kavita wrote to the grievance officer, citing IRDAI's 60-month moratorium and attaching the renewal receipts. When the insurer did not reply in 30 days, she filed with the Insurance Ombudsman online. At the hearing, the insurer could show no fraud, and the Ombudsman directed it to pay the full claim.
Keep these ready
- Policy document, proposal form copy, and all premium and renewal receipts.
- Claim form, hospital bills, discharge summary, prescriptions and test reports.
- For death claims: death certificate, medical cause-of-death certificate, FIR and post-mortem report if it was an accident.
- The rejection letter and every email or letter exchanged with the insurer or TPA.
Do not let an agent fill your proposal form. Most "non-disclosure" rejections trace back to a form someone else filled with "No" against every illness. Fill it yourself, disclose honestly, and keep a copy.
Where to go
- First: the insurer's grievance redressal officer (details on the policy and the insurer's website).
- Also: IRDAI's Bima Bharosa portal, bimabharosa.irdai.gov.in.
- Then: the Insurance Ombudsman for your area (via the Council for Insurance Ombudsmen, cioins.co.in), for claims up to ₹50 lakh.
- Or: the Consumer Commission; guidance on 1915 or consumerhelpline.gov.in.
- Free legal aid: 15100.
Common questions
What is the time limit to complain to the Insurance Ombudsman?
One year from the date the insurer rejected your grievance or gave its final reply. You must first complain to the insurer and wait up to 30 days for a reply. The claim value must not exceed ₹50 lakh.
Can an insurer reject a claim for an illness I did not disclose?
For life insurance, not after three years from issue or revival (Sec 45 Insurance Act). For health insurance, not after 60 months of continuous cover, except for established fraud. Before those periods, the insurer must show the fact was material and give its reasons in writing.
Do I need a lawyer for the Ombudsman?
No. You can file yourself, free of cost, online or by letter, and appear at the hearing in person or, where the office offers it, by video. Bring copies of every document and a short written timeline.
Is the Ombudsman's decision binding?
It binds the insurer, which must comply within 30 days of receiving your acceptance. If you are not satisfied, you are not bound by it and can still go to a consumer commission or court.
This article is general information for awareness, not legal advice. For your situation, consult an advocate or call free legal aid at 15100.
