3 min
23-May-2025
Health insurance is a crucial financial safety net, but many policyholders make avoidable mistakes that can lead to claim rejections, out-of-pocket expenses, or insufficient coverage. Whether due to a lack of awareness or hasty decision-making, these errors often compromise the value of the policy. Understanding what to watch out for is essential to getting the most from your health plan. This guide highlights some of the most common health insurance mistakes made by Indian policyholders—from misreading the policy coverage to ignoring pre-existing clauses—and provides practical tips to help you stay protected and prepared when you need it most.
Some policies may not cover specific procedures, diseases during waiting periods, or outpatient consultations. It's important to read the policy wording carefully, including the terms, conditions, and exclusions. Always clarify doubts with the insurer or agent before purchase. A clear understanding ensures there are no surprises during emergencies or while filing a claim.
Instead, consider the plan’s features, sum insured, hospital network, claim process, and customer reviews. Balance affordability with comprehensive coverage that suits your family’s medical needs. It’s better to pay a slightly higher premium for a policy that provides broader coverage and smoother claims than to regret saving a few hundred rupees during a medical emergency.
Not understanding policy coverage properly
Many policyholders buy health insurance without fully reading the policy document. This can lead to confusion about what is covered, what’s excluded, and how much you’re entitled to claim. Misunderstanding the scope of coverage is one of the most common reasons for claim denial.Some policies may not cover specific procedures, diseases during waiting periods, or outpatient consultations. It's important to read the policy wording carefully, including the terms, conditions, and exclusions. Always clarify doubts with the insurer or agent before purchase. A clear understanding ensures there are no surprises during emergencies or while filing a claim.
Choosing insurance only based on premium cost
Opting for the cheapest health insurance plan can be a costly mistake. Low premiums often come with limitations such as sub-limits on room rent, disease-specific capping, or a smaller network of hospitals. Focusing only on cost may leave you underinsured.Instead, consider the plan’s features, sum insured, hospital network, claim process, and customer reviews. Balance affordability with comprehensive coverage that suits your family’s medical needs. It’s better to pay a slightly higher premium for a policy that provides broader coverage and smoother claims than to regret saving a few hundred rupees during a medical emergency.
Ignoring pre-existing condition clauses
Pre-existing diseases refer to any health condition diagnosed before purchasing the insurance policy. Ignoring how your policy treats such conditions can result in claim rejection or long waiting periods. Many buyers don’t realise these clauses until it’s too late.- Waiting periods apply for pre-existing conditions Most insurers have a waiting period of 2–4 years for pre-existing diseases. This means treatment costs related to those conditions won’t be covered during this time, even if you renew the policy regularly.
- Non-disclosure leads to claim rejection If you fail to declare a pre-existing condition at the time of purchase and it surfaces during treatment, your claim may be denied. This also risks policy cancellation on grounds of misrepresentation or fraud.
- Coverage may vary by insurer Different insurers define and treat pre-existing diseases differently. Some may offer quicker coverage through add-ons or loyalty benefits. Always compare pre-existing disease terms across policies before deciding.
- Check for disease-specific sub-limits Even after the waiting period ends, your policy may have caps on treatments for diabetes, hypertension, or asthma. These sub-limits can reduce your claim amount unless you choose a plan with no such restrictions.
- Declare everything honestly upfront To avoid future issues, be transparent during the proposal stage. Share details of your full medical history, ongoing medication, and past diagnoses—even if minor. It builds trust and strengthens your claim eligibility later.