A growing number of insurance companies are deliberately delaying settlement of insurance claims, particularly in the health segment, forcing policyholders into prolonged uncertainty and financial stress. Despite clear regulatory timelines laid down by the Insurance Regulatory and Development Authority of India (IRDAI), claims are being kept pending for five to seven months in several cases, often on the pretext of incomplete documentation or extended “investigation” procedures.
Consumer complaints indicate that insurers are routinely asking for additional documents just before the regulatory deadline expires, effectively resetting the clock and buying more time. In many delayed cases, policyholders allege that even after eventual approval, the claim amount is sharply reduced, compounding the loss.
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IRDAI timelines flouted
Under IRDAI guidelines issued in 2024, insurance companies are required to settle health and general insurance claims within 30 days of receiving all required documents. If further verification is needed, the claim must still be resolved within 45 days.
However, policyholders allege that insurers are misusing these provisions. In several cases, companies demand fresh medical records or procedural clarifications on the 29th or 30th day, later claiming that the documentation was incomplete and therefore the delay was unavoidable.
“The rules are clear, but enforcement on the ground is weak. Companies know how to stay technically compliant while practically delaying payouts,” said a consumer rights activist familiar with insurance litigation.
Cashless claims also hit
Even cashless hospitalisation claims, which are supposed to be settled swiftly, are facing hurdles. As per rules, insurers must grant pre-authorisation within one hour and clear the final hospital bill within three hours. Hospitals and patients, however, report frequent delays, with insurers seeking repeated clarifications or holding approvals without explanation.
Industry insiders admit that internal cost controls and fraud-avoidance checks have become stricter, but consumer groups argue that legitimate claims are being caught in the dragnet, defeating the purpose of insurance.
Online process adds to the burden
The shift to fully online claim systems has further complicated matters for ordinary policyholders. While digital portals were meant to simplify claim filing, customers say the process has become needlessly complex and document-heavy.
At the time of filing a claim, policyholders are often asked to upload not only medical records but also Aadhaar, PAN, cancelled cheques and multiple declarations, even though these details were already submitted at the time of policy issuance.
Adding to the frustration, online portals impose strict file-size limits, making it difficult for patients or families to upload large medical reports, scans or discharge summaries. “Many people don’t know how to compress files. Claims get stuck simply because documents won’t upload,” said an insurance advisor.
‘Documents complete, but shown incomplete’
Several policyholders allege that even after submitting all required paperwork multiple times, insurers continue to mark documents as “pending”.
Shivam Yadav, a policyholder who filed a complaint with IRDAI, said his claim remained unpaid despite repeated submissions. “Each time I am told some document is missing, even though it was uploaded earlier. The expected payment date keeps changing, and no one gives a clear answer,” he said.
Consumer forums report a steady rise in such complaints, particularly in health insurance, where delayed payouts can have serious financial consequences for families already burdened by medical expenses.
Regulatory scrutiny likely to intensify
While IRDAI has repeatedly warned insurers against delaying tactics, enforcement remains a challenge. Officials acknowledge that complaint-driven action often comes too late for policyholders who need immediate relief.
Experts say stricter penalties, automatic interest on delayed claims and real-time monitoring of claim timelines may be needed to curb the practice. “Unless delays start hurting insurers financially, this behaviour will continue,” a former regulator said.
Trust at stake
Insurance is built on trust—the promise that financial support will be available in times of crisis. Persistent delays and procedural hurdles are now eroding that trust, particularly in health insurance, which is marketed as a safety net during medical emergencies.
As complaints mount and regulatory pressure grows, insurers face a critical test: honour claim timelines transparently or risk deeper scrutiny and loss of consumer confidence. For millions of policyholders, timely enforcement of existing rules—not new promises—may be the only real remedy.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
