In recent years, a growing number of Indians are choosing to quit their health insurance policies due to rising premiums, GST burdens, and disheartening claim rejections. While financial factors like high costs are significant, many policyholders also express deep frustration over inadequate coverage and rejected claims, making them question the value of continuing with insurance.
Rising Costs and Rejected Claims Erode Trust in Health Insurance
Take Subhadip Ghosh from Kolkata, who saw his Rs 5 lakh family floater policy premium jump from Rs 22,000 in 2016 to Rs 78,000 in 2025, despite a no-claim bonus. Similarly, Srishti from Delhi discontinued her Rs 3 lakh-a-year policy after her friend’s claim was rejected, stating the coverage felt meaningless when denied at a crucial time. This distrust is growing: Policybazaar reports 10% of customers did not renew their plans after facing a 30% hike in premiums.
Claim rejections have also become a major concern. Rupesh Sharma from Mumbai, despite having a Rs 10 lakh cover, received only Rs 1.8 lakh reimbursement on a Rs 2.5 lakh hospital bill due to fine-print clauses. His decade-long premium payments of over Rs 6 lakh felt wasted. Stories like these reveal the psychological toll and lack of trust that many feel toward insurers.
GST Burden and Limited Options Push Policyholders to Seek Alternatives
The 18% GST levied on health premiums adds another layer of burden. Srishti called this tax a “cruel joke,” while others, like Bhumi Shah from Ahmedabad, saw their Rs 12,000 premium in 2010 rise to Rs 48,000 by 2025 for the same coverage. Despite a tax rebate under Section 80D, it’s not enough to offset these rising costs—especially for senior citizens who face the sharpest hikes.
Some individuals are turning to alternatives like SIPs or modifying their insurance structure to manage costs better. However, switching policies often comes with restrictions and long waiting periods. Seniors like Madhusudan Arora face the risk of remaining uninsured altogether.
Rising Discontent Sparks Demand for Health Insurance Reforms
The growing dissatisfaction has led to calls for reform. Consumers urge the government to regulate hospital pricing and enforce standardized rates to make insurance more transparent and fair, ensuring the system supports—not exploits—the insured.
Summary:
Rising health insurance premiums, GST, and frequent claim rejections are driving many Indians to abandon their policies. Policyholders feel disillusioned by inadequate coverage and hidden clauses. With limited affordable alternatives, especially for seniors, there’s a growing call for government regulation and standardized hospital pricing to restore trust in the system.
