Health Insurance Complaints Jump 41 Per Cent; 69 Per Cent Involve Claims Failures, Reveals 1 Finance Study

Health insurance is meant to work quietly in the background—until the day it is needed. Increasingly, that is also the day when things seem to go wrong.

A recent analysis by 1Finance Magazine, drawing on nearly 36,000 customer reviews across 23 insurers, suggests that many policyholders are facing difficulties at the claims stage. The study comes alongside a sharp rise in complaints across the sector.

In FY25, grievances in general and health insurance climbed 41 per cent to 1,37,361, compared with 97,503 a year earlier. What stands out is that close to 69 per cent of these complaints relate to claims. In simple terms, most disputes arise when customers try to use their policies, not when they buy them.

The issue has also been acknowledged by the regulator. The Insurance Regulatory and Development Authority of India (Irdai) Chairman Ajay Seth has indicated that the nature of complaints is becoming more serious, with a growing number linked to situations where policyholders are already under stress—during hospital admission, treatment, or discharge.

A Metric That Leaves Out The Experience

The claim settlement ratio is often the first number people check while comparing insurers. It indicates the number of claims paid. But it says little about how smooth—or difficult—the process was.

It doesn’t show whether approvals came through when needed, whether families had to scramble for money in the meantime, or whether the insurer gave a clear reason when a claim was held up or turned down. For someone dealing with a hospital bill, these details can matter more than the final outcome.

For this, the study went through customer posts from January to November 2025 across X, Google Play Store, and Apple App Store. Instead of focusing only on whether claims were paid, it examined how they were handled.

The exercise covered 23 insurers, though detailed findings were shared for five insurers included in 1 Finance’s Featured List—policies that it recommends to its clients. The approach reflects an effort to track real-world performance, not just headline numbers.

Patterns Emerging From Customer Feedback

The reviews were assessed on three broad aspects. The first was the tone of the customers- whether they sounded relieved or frustrated. Second, it looked at how processes such as cashless approvals, paperwork, and follow-ups played out. The third looked at the money side of it—whether delays meant people had to pay from their own pocket or borrow to keep treatment going.

These inputs were put together to arrive at a Sentiment Score on a scale of 0 to 100. A lower score usually means the same problems kept coming up, often at key stages.

Two policies may look almost identical on paper, but the experience can be very different when you actually file a claim. That’s why it helps to look past the usual headline numbers before choosing a plan.

As complaint numbers continue to rise and claims dominate grievances, the focus is shifting to how insurers perform when they are actually called upon. The real test of a policy, it appears, lies not in its features, but in how it holds up in a moment of need.