If you are stuck in such a situation, here is what to do.

Mr. Alok Sharma found himself in a distressing situation when his cashless health insurance claim was rejected by his insurer, Suraksha Health Insurance. The company cited “non-disclosure of material facts” as the reason for the denial. Mr. Sharma recounts that when he purchased the policy, the agent only asked him a few questions over the phone, and he answered them truthfully. He was never provided with a detailed proposal form to review or sign, a standard practice in the industry.

The issue came to light when he was helping his brother purchase a new policy from Pragati General Insurance. Pragati sent a comprehensive proposal form for verification before issuing the policy. This made Mr. Sharma realize that Suraksha Health Insurance had never followed this crucial step. A thorough check of his emails and messages confirmed that no such form was ever sent to him for verification. It appeared the insurer’s representative had filled out the form on their own, without his input or review.

The specific “non-disclosure” pointed to by the insurer was a brain scan from 2023 which showed minimal age-related changes. The neurologist who reviewed the scan had explicitly told Mr. Sharma that these findings were common for his age and not a cause for concern or any specific treatment. Another doctor consulted during his recent hospitalization confirmed this assessment. As a layperson, Mr. Sharma had rightfully relied on the professional medical opinion provided to him.

Furthermore, Mr. Sharma had held an active policy with another company, Amanat Insurance, since 2021, well before the scan was done. He argued that if there had been any significant diagnosis or need for follow-up, he would have disclosed it and would not have gone through the trouble of porting his policy to Suraksha Health Insurance. The entire situation felt engineered by the insurer, who seemingly failed to follow due process in collecting his health information and then used it to deny a legitimate claim.

Advice in such cases

If your insurance claim has been unfairly denied, it is crucial to act systematically. Here are the steps you should consider:

• Gather All Documents: Collect every piece of paper and digital communication related to your policy. This includes the policy document, premium receipts, all emails and SMS messages exchanged with the insurer or agent, medical reports, hospital bills, and the claim denial letter.
• Review the Denial Letter: Carefully read the insurer’s reason for denial. They must provide a specific and clear justification. In cases of non-disclosure, they need to prove that the undisclosed fact was “material” to their decision to issue the policy.
• File a Grievance: The first formal step is to file a written grievance with the insurance company’s own grievance redressal officer. Clearly state your case, attach supporting documents, and explain why the denial is unjust. Insurers are required by IRDAI to respond within 15 days.
• Approach the Insurance Ombudsman: If you are not satisfied with the insurer’s response or if they do not respond within the stipulated time, you can file a complaint with the Insurance Ombudsman. This is a quasi-judicial body that resolves disputes without the complexities of a formal court.
• File a Consumer Complaint: You can also approach the Consumer Disputes Redressal Commission (Consumer Court) at the district, state, or national level, depending on the value of your claim. This is a powerful legal remedy for deficiency in service.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

Applicable Sections of Law

The legal framework for such disputes in India is robust and primarily governed by the following:

• The Insurance Act, 1938: Section 45 of this Act is crucial. It states that after two years from the date of policy issuance, a life or health insurance policy cannot be called into question by the insurer on the grounds of an inaccurate or false statement in the proposal form, unless the insurer can prove that the statement was on a material matter and was fraudulently made by the policyholder with the knowledge that it was false.
• The Consumer Protection Act, 2019: This Act protects consumers against unfair trade practices and deficiency in services. Rejecting a claim on flimsy or unjust grounds constitutes a deficiency in service, and you can seek compensation and relief under this Act.
• IRDAI (Protection of Policyholders’ Interests) Regulations, 2017: These regulations mandate that insurance companies must follow fair and transparent procedures. Regulation 4(4) requires the insurer to provide the insured with a copy of the proposal form. If the insurer filled the form on their own without your verification, it is a violation of these regulations and strengthens your case significantly. The principle of *uberrimae fidei* (utmost good faith) applies to both the insured and the insurer. The insurer cannot hide behind fine print or procedural lapses on their own part.

If you are the complainant

As the complainant initiating legal action, your focus should be on building an undeniable case. Here is your action plan:

• Draft a Detailed Complaint: Your complaint, whether to the Ombudsman or the Consumer Commission, should be a clear, chronological account of events. Start from the purchase of the policy, mention the lack of a proposal form for verification, detail the medical event, the claim submission, and the subsequent denial.
• Reference the Law: Explicitly mention how the insurer has violated Section 45 of the Insurance Act and the IRDAI regulations. Quote the specific clauses if possible.
• Highlight the Insurer’s Failure: Emphasize the insurer’s failure to provide you with the proposal form for verification. This is a critical point that shifts the burden of proof. Argue that you cannot be held responsible for non-disclosure in a document you never reviewed or signed.
• Quantify Your Claim: Clearly state the relief you are seeking. This includes the full claim amount, compensation for mental agony and harassment, and the costs incurred in pursuing the complaint.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

If you are the victim

Being a victim of an unfair claim denial can be emotionally and financially draining. It is important to maintain your composure and take measured steps:

• Do Not Panic: An initial claim rejection is not the final word. There are multiple avenues for appeal, and the law is often on the side of the policyholder in cases of procedural unfairness.
• Preserve All Communication: Do not delete any emails or messages from the insurer. If you have phone conversations, make a note of the date, time, and summary of the discussion immediately after the call.
• Seek a Second Medical Opinion: As Mr. Sharma did, getting a written opinion from another qualified doctor confirming that the “undisclosed” condition was minor or insignificant can be powerful evidence.
• Document Everything: Keep a file with all your documents, correspondence, and notes. This organization will be invaluable when you present your case to a lawyer or a dispute resolution body.
• Consult with Lawyer: The very basic and important step to start is talk to Lawyer / advocate. You should not hesitate in paying his consultation fee i.e. might be in range of Rs. 10,000 to 50,000 depends case to case. He is helping you in this situation of come out. He is expert in the domain and can help you explain the procedure which you might have never explored. A good lawyer can get the issues resolved much faster than you think.

How the police behave in such cases

Typically, the police have a very limited role in health insurance claim disputes. These are considered civil matters, not criminal ones. The dispute is contractual, arising from the insurance policy. Therefore, filing a police complaint or FIR is generally not the appropriate or effective remedy.

Police would only get involved if there is an element of a criminal offense like cheating (Section 316 of the Bharatiya Nyaya Sanhita, 2023), forgery, or organized fraud. In a standard case of claim denial due to alleged non-disclosure, the police will likely direct you to the appropriate civil forums, such as the Insurance Ombudsman or the Consumer Commission, as they are specifically designed to handle such disputes.

FAQs people normally have

Can an insurance company deny a claim based on a proposal form I never saw or signed?

No. The IRDAI regulations mandate that the insurer must provide you with a copy of the proposal form. If they filled it out themselves without your verification and signature, it is a significant procedural lapse on their part. It is very difficult for them to hold you accountable for information in a document you did not approve.

What is considered a “material fact” in health insurance?

A material fact is any information that would have influenced a prudent insurer’s decision to accept the risk or determine the premium and terms of the policy. Minor, age-related health findings that do not require treatment or follow-up are generally not considered material.

What if my doctor told me a medical finding was insignificant?

As a layperson, you are expected to rely on your doctor’s professional opinion. If your doctor deemed a condition to be minor and not a “disease” or “ailment” that required disclosure, you can argue that you did not willfully or fraudulently hide any information. A written statement from the doctor can be used as strong evidence.

What evidence is required?

To build a strong case against an unfair claim denial, you will need the following evidence:

• The insurance policy document.
• Proof of all premium payments.
• The claim denial letter from the insurer, stating the exact reasons for rejection.
• All medical records, including doctor’s consultations, diagnostic reports (like the scan), and hospital discharge summary.
• A copy of the proposal form if you have it. If not, your correspondence proving you requested it or were never given it.
• All email, SMS, or written correspondence with the insurance company and its agent.
• A written statement or affidavit from your doctor clarifying the nature of the alleged undisclosed condition.

How long will the investigation take?

The timeline for resolution can vary depending on the path you choose:

• Insurer’s Grievance Cell: By regulation, the insurer must resolve your grievance within 15 days.
• Insurance Ombudsman: The process here is relatively quick. A resolution can be expected within 1 to 3 months.
• Consumer Commission: This can take longer. A case in the District Commission might take anywhere from 6 months to over a year. Appeals to the State or National Commission will add to the timeline.

Advocate Sudhir Rao, Supreme Court of India