Around 76% health insurance reimbursement claimants borrowed or broke investments turning their medical bills into an immediate financial burden, found the latest national consumer insights report released by Policybazaar, an online insurance marketplace that allows consumers to manage various insurance products from multiple insurers through a single platform.

Correspondingly, the ability to manage costs only with liquid savings dropped from 32% to 24% in 2024-25. Further financial stress at the time of raising claims has gone up across all city-tiers between 2023 and 2025, with the overall increase driven largely by metros, which saw the sharpest jump of 14% to 76%. Tier-2 cities recorded the highest incidence overall at 78% while Tier-3 cities saw a 6% point rise, with 71% of claimants borrowing money or liquidating investments in 2024-25.

Customers seek transparency

The report also notes that transparency is the number one concern posed by customers from the Indian health insurance sector with clear reasons for rejection being the most demanded answer. Around 73% of those dissatisfied with rejections cited the reason as unclear, highlighting a communication gap. Customers also demanded frequent updates to cashless hospital lists, simpler claims forms, and stronger verification at purchase to avoid surprises later.

Hospitalisation frequency creates one of the widest gaps in data. Customers with a single hospitalisation report a Health Claims Exchange (HCX) of 84.5, while those with multiple hospitalisations drop to 73.2, the lowest in all segments. Also middle-aged patients (36-40 years) record a relatively steadier experience, helped by stronger current experience scores and higher intent to continue with health insurance.

The report also found that dense hospital networks alone do not guarantee a stronger claims experience and that repeated hospitalisation, metro complexity and higher reimbursement rates pull down the score because of what the claims pathway asks of them.

The mode of claims, more than any other variable, is where that burden shows up most sharply, and cashless claims is where the clearest relief is found, said the report.

Need stronger verification

As much as 39% of customers asked for stronger verification at the point of purchase, with the South leading at 44% across all regions. Most importantly conditions missed at onboarding become the ground for rejection or pushing towards reimbursement.

Customers want a transparent, streamlined, proactive insurance policy and procedure, the report found.

The report also suggests that no claim should be closed with vague terms like “not admissible”. Denial must cite the specific clause and the evidence used. Additionally, every clause must indicate a clear recourse or appeal option to empower the customer.

Suggesting that policy buying should be driven by the mandate of — verify comprehensively at purchase; honour unconditionally at claims stage; it added that industry players should conduct rigorous medical verification upfront and if a condition is not flagged during a comprehensive purchase-time check, it should not be invoked as undisclosed later.

Around 39% of customers cite strong verification at purchase as a top improvement to avoid the trauma of a later-stage rejection.

Giving insight into the health insurance ecosystem, the report states that cashless remains the easier route for customers and that its strength comes from reduced upfront burden, simpler paperwork, nearby network hospitals and faster approval movement.

Borrowing went up

Many people opt for reimbursement when cashless facility is unavailable, delayed or not worth waiting for at discharge from hospital. This becomes more stressful when the customer has to arrange for funds upfront. But this trend showed that 76% had to borrow during treatment which is up from 68% last year.

The report explains that this shows how a lack of upfront cashless support can quickly create financial pressure even if the claims are later reimbursed. The reimbursement journey is far more effort heavy and the lower score reflects the responsibility customers carry across payments, documentation, follow-ups and settlement.

Also suggesting one authorisation for full treatment — the report noted that customers with multiple hospitalisations scored poorly on the health claims experience. “For chronic cycles like chemotherapy or dialysis, the requirement for fresh pre-authorisation for every visit is an unnecessary administrative hurdle and a single-window approval should cover the clinical plan, with reverification needed only if the treatment protocol should change,’’ it said.

The survey conducted 2,228 face-to-face interviews with personal health policy holders who purchased their policy online (insurer website, aggregators, etc.) or offline (agents, banks, etc.) to assess claims process satisfaction and the reason behind it.

At 82.8 out of 100, India’s health insurance claim experience sits inside the “moderate” band. It’s a credible base, suggesting that the system holds together for most of the customers, most of the time.