Life Insurance Complaints Fall By Over 50 Per Cent In A Decade, Irdai Data Shows

India’s life insurance sector appears to be seeing a clear improvement in how customer complaints are being handled. Grievances against life insurers have fallen by more than 50 per cent over the past decade, even though the business has grown during the same period, according to Life Insurance Council data.

According to the Insurance Regulatory and Development Authority of India’s (Irdai) Annual Report for FY2024, complaints in the life insurance segment came down from 2.79 lakh in FY15 to 1.23 lakh in FY24. This decline has taken place even as the number of policies in force rose to 292 lakh in FY24.

The numbers indicate that the sector is not only expanding, but is also becoming better at dealing with policyholder concerns. In FY25, less than one per cent of grievances registered on the Bima Bharosa portal during the year were pending, showing that complaint disposal has also improved.

Fewer Complaints Despite Wider Reach

The fall is visible not just in absolute numbers, but also in the complaint ratio. Grievances per 10,000 policies declined from 108 in FY15 to 42 in FY24. During the same period, the complaint ratio dropped from 1.08 per cent to 0.42 per cent.

For policyholders, this matters because life insurance is not a short-term product. A policyholder may stay with an insurer for decades, and the real test of the policy often comes at the time of claim settlement. A reduction in grievances suggests that some of the friction points between insurers and customers may be easing.

Several changes over the years appear to have helped. Digital onboarding, e-KYC, Aadhaar authentication, and real-time validation have reduced errors at the time of policy issuance. Earlier, wrong details, incomplete documentation, or gaps in verification could lead to disputes later. With more processes now moving online, insurers are in a better position to catch such issues early.

There has also been closer supervision of sales practices. Better monitoring and the use of technology have made it easier for insurers to track complaints, identify repeated problem areas, and act on service gaps. This is especially important in a sector where mis-selling, unclear communication, and claim-related confusion have often been major causes of customer dissatisfaction.

Claim Timelines Have Also Been Tightened

Regulatory changes have added further pressure on insurers to improve service standards. Under the Protection of Policyholders’ Interests framework, claim settlement timelines have been reduced from 30 days to 15 days. Where an investigation is required, the timeline has been cut from 90 days to 45 days.

This is a significant change for families waiting for insurance money after the death of an earning member. A delayed claim can create serious financial stress, especially when the household is already dealing with loss. Faster timelines may not remove all disputes, but they can help reduce uncertainty for policyholders and nominees.

Life insurance also remains one of the largest parts of India’s insurance market. It accounts for more than 80 per cent of the total insurance premium in the country. The sector also plays a larger role in the economy, with more than Rs 24.37 lakh crore invested in government securities.

As India moves towards the goal of “Insurance for All by 2047”, the quality of service will be as important as the number of policies sold. For the industry, the challenge will be to ensure that new customers understand what they are buying, receive clear policy documents, and face fewer hurdles at the claim stage.

Protection Gap Remains A Big Challenge

Even as grievance handling has improved, India continues to face a large life insurance protection gap. According to the Insurance Awareness Committee–Life Insurance, 87 per cent of India still faces a significant protection gap. Among those aged 18–35, the gap is even higher, at more than 90 per cent.

This means that a large number of families may still not have enough financial protection if the main earning member dies unexpectedly. The issue is not only about buying a policy, but also about buying adequate cover that can actually support the family’s future needs.

The Insurance Awareness Committee was formed in 2019 under the aegis of the Life Insurance Council. It brings together 24 life insurance companies and works under the guidance of six nominated CEOs. The committee works with cross-industry marketing teams and creative and media agencies to run campaigns aimed at improving awareness and understanding of life insurance products.

The larger task before the industry is now two-fold: continue reducing complaints and also close the protection gap. Better communication, cleaner sales practices, faster claims, and stronger grievance handling will decide how much trust customers place in life insurance in the years ahead.