Three out of four risk financial ruin — Are you one of them? Expert breaks down insurance puzzle
Despite rising healthcare costs, nearly 75% of India’s middle-class families remain vulnerable to financial ruin from a single hospital bill. Shockingly, most Indians hold health insurance policies yet remain unaware of their crucial rights as policyholders.
- Jul 4, 2025,
- Updated Jul 4, 2025 2:37 PM IST
A staggering statistic should worry every Indian household: 75% of Indian middle-class families are just one hospital bill away from slipping into poverty.
Even more alarming is the lack of protection for life’s biggest uncertainties. Three out of four Indians still do not have life insurance. And while many do invest in health insurance, a large majority remain in the dark about what those policies truly cover.
“Most Indians buy health insurance but don’t know what they’re entitled to,” says ace investor and financial expert Abhijit Chokshi. “It’s not because they’re careless. It’s because no one tells them.”
To bridge this knowledge gap, the Insurance Regulatory and Development Authority of India (IRDAI) has laid out 11 crucial rights that every health insurance policyholder in India should know. Yet, many remain unaware — and even those who are familiar often don’t know the hidden exceptions.
Here’s what you should check against your own policy:
1. Right to Lifelong Renewability Your insurer can’t refuse to renew your policy simply because you’re older, have made claims, or developed new illnesses. Exception: Renewal can be denied only if you commit fraud or deliberately hide important information.
2. Right to Portability You’re allowed to shift to another insurer without losing benefits like waiting periods for pre-existing diseases. Exception: The new insurer can reject your portability request after assessment. Port early while you’re healthy.
3. Right to No Claim-Based Loading Your premium cannot be increased solely because you made a claim or fell ill. Exception: Some insurers hike base rates for everyone, then quietly offer discounts only to those who don’t claim — effectively penalizing claimants.
4. Right to a Moratorium Period After five years of continuous coverage, insurers cannot deny claims for minor non-disclosures or pre-existing diseases. Exception: Intentional fraud or major omissions still allow the insurer to cancel your policy.
5. Right to Free-Look Period You get 30 days after receiving your policy document to cancel it if you change your mind. The insurer must refund your premium, minus nominal charges like stamp duty.
6. Right to Timely Cashless Claims From July 31, 2024, insurers must approve or reject cashless hospitalization requests within one hour. Longer delays can be escalated to the regulator.
7. Right to Compensation for Delayed Discharge If insurer delays push your hospital discharge beyond three hours, they must pay for the extra stay. Importantly, this cost comes from their shareholders’ funds, not your premium pool.
8. Right to Pay Premium Only After Acceptance From March 2025, insurers can’t collect your premium upfront. Funds stay blocked, similar to IPO applications, and get refunded automatically if your application is rejected. Exception: Some insurers are still working on implementing this process.
9. Right to 3-Month Notice on Policy Changes Insurers must inform you at least three months in advance if they plan to change policy terms or raise premiums. Exception: Some skip this, so file a complaint if it happens.
10. Right to File a Grievance If you’re unhappy with your insurer, escalate first to the company, then to IRDAI, then to the Ombudsman, and finally to consumer court if necessary.
11. Right to Timely Claim Payment After Ombudsman Order Once the Insurance Ombudsman rules in your favor, the insurer must pay your claim within 30 days. Delays attract a Rs 5,000-per-day penalty payable to you.
Abhijit Chokshi insists, “Knowing your rights isn’t optional — it’s essential. A single hospital bill shouldn’t be the reason a family loses its financial stability. The more you know, the safer you’ll be.”
A staggering statistic should worry every Indian household: 75% of Indian middle-class families are just one hospital bill away from slipping into poverty.
Even more alarming is the lack of protection for life’s biggest uncertainties. Three out of four Indians still do not have life insurance. And while many do invest in health insurance, a large majority remain in the dark about what those policies truly cover.
“Most Indians buy health insurance but don’t know what they’re entitled to,” says ace investor and financial expert Abhijit Chokshi. “It’s not because they’re careless. It’s because no one tells them.”
To bridge this knowledge gap, the Insurance Regulatory and Development Authority of India (IRDAI) has laid out 11 crucial rights that every health insurance policyholder in India should know. Yet, many remain unaware — and even those who are familiar often don’t know the hidden exceptions.
Here’s what you should check against your own policy:
1. Right to Lifelong Renewability Your insurer can’t refuse to renew your policy simply because you’re older, have made claims, or developed new illnesses. Exception: Renewal can be denied only if you commit fraud or deliberately hide important information.
2. Right to Portability You’re allowed to shift to another insurer without losing benefits like waiting periods for pre-existing diseases. Exception: The new insurer can reject your portability request after assessment. Port early while you’re healthy.
3. Right to No Claim-Based Loading Your premium cannot be increased solely because you made a claim or fell ill. Exception: Some insurers hike base rates for everyone, then quietly offer discounts only to those who don’t claim — effectively penalizing claimants.
4. Right to a Moratorium Period After five years of continuous coverage, insurers cannot deny claims for minor non-disclosures or pre-existing diseases. Exception: Intentional fraud or major omissions still allow the insurer to cancel your policy.
5. Right to Free-Look Period You get 30 days after receiving your policy document to cancel it if you change your mind. The insurer must refund your premium, minus nominal charges like stamp duty.
6. Right to Timely Cashless Claims From July 31, 2024, insurers must approve or reject cashless hospitalization requests within one hour. Longer delays can be escalated to the regulator.
7. Right to Compensation for Delayed Discharge If insurer delays push your hospital discharge beyond three hours, they must pay for the extra stay. Importantly, this cost comes from their shareholders’ funds, not your premium pool.
8. Right to Pay Premium Only After Acceptance From March 2025, insurers can’t collect your premium upfront. Funds stay blocked, similar to IPO applications, and get refunded automatically if your application is rejected. Exception: Some insurers are still working on implementing this process.
9. Right to 3-Month Notice on Policy Changes Insurers must inform you at least three months in advance if they plan to change policy terms or raise premiums. Exception: Some skip this, so file a complaint if it happens.
10. Right to File a Grievance If you’re unhappy with your insurer, escalate first to the company, then to IRDAI, then to the Ombudsman, and finally to consumer court if necessary.
11. Right to Timely Claim Payment After Ombudsman Order Once the Insurance Ombudsman rules in your favor, the insurer must pay your claim within 30 days. Delays attract a Rs 5,000-per-day penalty payable to you.
Abhijit Chokshi insists, “Knowing your rights isn’t optional — it’s essential. A single hospital bill shouldn’t be the reason a family loses its financial stability. The more you know, the safer you’ll be.”