Claim Repudiation & Common Rejections
What repudiation of a health claim means, the grounds insurers commonly rely on, the steps IRDAI requires before a claim is rejected, how the 60-month moratorium limits non-disclosure disputes, and the routes open to a policyholder who disagrees.
What repudiation is
Repudiation means the insurer rejects a claim, in full or in part. It is a decision on the claim itself, and so differs from a refusal of cashless authorisation, after which the same claim can still be made by reimbursement.
Every claim is assessed against the policy terms, so a rejection has to rest on those terms or on what was declared in the proposal.
The usual grounds
Common grounds include non-disclosure of a pre-existing disease in the proposal, a claim arising during a waiting period, treatment the policy excludes, and limits being exceeded, where part of the claim is disallowed.
Exclusions are of two kinds. A waiting period is temporary: once the waiting period for a disclosed pre-existing disease is complete, which cannot take longer than 36 months, claims for it are payable like any other, subject to the sum insured, sub-limits and co-pay. A permanent exclusion stays however long the policy has run. Cosmetic surgery is the usual example, though the wording normally excepts reconstructive surgery needed after an accident, burns or cancer.
What the insurer must do
Under IRDAI's Master Circular on Health Insurance Business (29 May 2024), a claim cannot be repudiated without the approval of the insurer's Product Management Committee or its Claims Review Committee. A claim that is repudiated or partly disallowed must come with the insurer's reasons, referring to the policy terms and conditions relied on.
On proof, courts and consumer commissions generally expect the policyholder to show that the expense falls within the cover, and an insurer that relies on an exclusion to show that the exclusion applies. This comes from case law, not from an IRDAI rule.
Non-disclosure and the moratorium
A dispute about non-disclosure may turn on a retrospective diagnosis: a conclusion, drawn from present symptoms or test results, that a condition must already have existed earlier. The term is not defined in IRDAI's rules, and whether a condition was in fact pre-existing depends on the evidence in each case.
After 60 continuous months of cover, a claim cannot be contested for non-disclosure or misrepresentation unless fraud is established.
If the policyholder disagrees
The complaint goes to the insurer first, which must resolve it within 14 days. Complaints can also be registered on IRDAI's Bima Bharosa portal. If the insurer rejects the complaint, does not reply within one month or gives an unsatisfactory reply, the Insurance Ombudsman can take it up; a consumer commission is the other route.
Rules at a glance
The same omission, two different years
Illustration: Anil did not mention his high blood pressure when he bought a health policy. In the second policy year he claims for a related heart condition. The insurer may reject the claim for non-disclosure, with committee approval and written reasons citing the policy terms.
Suppose instead the claim arises in the seventh year, after more than 60 continuous months of cover. The insurer can no longer contest it for non-disclosure unless it establishes fraud. The claim is still assessed against the sum insured, sub-limits and other terms.
Key points
- Repudiation is the rejection of a claim in full or in part, and must be justified by the policy terms.
- A repudiation needs the approval of the insurer's Product Management Committee or Claims Review Committee, and written reasons citing the terms relied on.
- Waiting periods end; permanent exclusions such as cosmetic surgery do not.
- After 60 continuous months, non-disclosure cannot defeat a claim unless fraud is established.
- A complaint to the insurer comes before the Ombudsman.
Common misunderstandings
- A cashless refusal is not a repudiation: the claim can still be filed for reimbursement.
- The moratorium does not protect fraud: an insurer that establishes fraud can contest a claim even after 60 months.
- A retrospective diagnosis is not a rule that settles the matter: whether a condition was pre-existing depends on the evidence.
- The point that an insurer must prove an exclusion is not an IRDAI rule: it is the approach courts and consumer commissions generally take.
Questions people ask
Can part of a claim be rejected?
Yes. Repudiation can be in full or in part, for example where a limit in the policy is exceeded. The insurer must give reasons for the part disallowed.
Is a disease covered once its waiting period is over?
For a disclosed pre-existing disease, yes: claims are payable like any other, within the sum insured and subject to the policy's sub-limits, co-pay and other terms.
Can a rejected claim go straight to the Insurance Ombudsman?
No. The policyholder must first complain to the insurer that issued the policy.
What this lesson relies on
- IRDAI Master Circular on Health Insurance Business (29 May 2024) — claim repudiation, moratorium
- IRDAI Master Circular on Protection of Policyholders' Interests (5 September 2024) — grievance timelines
- Insurance Ombudsman Rules, 2017 (as amended 2023)
This lesson was reviewed independently against these sources on 8 October 2026. Rules change: check the current regulation, scheme document or policy wording before relying on any figure. This is education, not advice.