Subhadip Ghosh, for instance, a 38-year-old professional from Kolkata, experienced a significant premium increase from Rs 22,000 in 2016 to Rs 78,000 in 2025 for a family floater policy with a coverage of Rs 5 lakh. Despite receiving a 10% no-claim rebate, Ghosh is questioning the sustainability of maintaining such an expensive policy, expressing frustration over the steep hikes in costs and questioning how many Indians can afford comparable premiums.
Srishti, a legal executive from South Delhi, similarly faced disillusionment with health insurance after her friend had a claim rejected despite paying nearly Rs 3 lakh annually for a Rs 40 lakh cover. This incident led her to opt out of her own policy entirely, illustrating a growing sentiment that the high premiums are not justified, especially when policyholders feel that their coverage is ineffectual at critical moments.
The issue of rising premiums is widespread, with recent data indicating that nearly 10% of health insurance policies that experienced a rise of 30% or more were not renewed. This trend underscores deeper concerns about the overall health insurance landscape in India, where only 51% of the population currently enjoys coverage. Despite an increase in government health schemes, many individuals find themselves facing limited options for affordable coverage, significantly influenced by the escalating costs. One of the most frustrating aspects of health insurance for consumers is the issue of claim rejections.
Rupesh Sharma, a 42-year-old IT professional from Mumbai, shared his experience with a comprehensive health insurance plan that initially seemed promising. However, when he sought treatment for gallstones in 2024, he was left with unexpected out-of-pocket expenses due to his insurer approving only Rs 1.8 lakh of a Rs 2.5 lakh hospital bill. This experience left Sharma grappling with significant costs due to fine-print clauses he was unaware of, leading to a sense of distrust in insurers. Long-term policyholders like Sharma have shared similar sentiments of disillusionment, feeling that their premiums are often not justified by the coverage received. Many have expressed frustration at the notion of paying substantial amounts only to find that their coverage falls short at critical moments, a reality that has driven some individuals, like Srishti, to redirect their premium payments into more reliable financial savings methods, such as recurring deposits in banks, rather than into policies they perceive as inadequate.
Adding to dissatisfaction among consumers is the burden of the 18% GST imposed on health insurance premiums. This tax has further aggravated the already high costs, making insurance even less affordable. Srishti referred to the GST on her premium as “a cruel joke,” while Bhumi Shah from Ahmedabad highlighted her experience with rising premiums for a family floater policy, which increased from Rs 12,000 in 2010 to Rs 48,000 today. Such increases have compelled her to reassess her insurance strategy, despite recognizing the vulnerability that comes with not having coverage.
Industry experts corroborate the widespread nature of these experiences, reporting that health insurance premiums have more than doubled over the last five years, particularly impacting policies covering senior citizens. The sharp rise in costs, exacerbated by the GST, has led many consumers struggling to reconcile the necessary investment in health coverage with the overwhelming financial pressure it creates. The growing challenge in the health insurance market raises serious questions about the viability of current insurance models and their capacity to provide genuine security to consumers.
As costs of premiums escalate and claims become more elusive, many individuals are left feeling like they are being taken advantage of, with some describing the situation as akin to being at the mercy of insurance providers. The sentiment among many policyholders is that they are paying exorbitant amounts for coverage that may ultimately not provide the protection they need when they require it most.
In light of these challenges, several individuals are exploring alternative ways to meet their insurance needs. This is indicative of a broader trend where consumers are beginning to question traditional health insurance models and are seeking out alternative strategies to ensure they are adequately covered without sacrificing financial security. Overall, the combination of rising premiums, claim rejections, and the additional burden of GST has collectively contributed to a climate of uncertainty and distrust in India’s health insurance system. As many policyholders grapple with financial pressures and disappointing experiences, it becomes clear that substantial reforms or innovations in the health insurance sector are necessary to restore consumer confidence. With a burgeoning need for accessible and reliable healthcare coverage, addressing these systemic issues may well dictate the future direction of health insurance in India.
