Health insurance claim rejected for non-disclosure? Here's what works

Claim rejections for non-disclosure are not always final. Here is how documentation, timelines and doctor clarifications can change outcomes

A health insurance claim rejection citing “non-disclosure” can feel like an allegation of wrongdoing at a moment of stress. In practice, such rejections are often rooted in interpretation of medical records rather than deliberate concealment, say insurance experts.

 

What do insurers usually mean by “non-disclosure”?

Insurers invoke non-disclosure when they believe a material health detail was not declared at the time of buying the policy. This assessment is largely based on hospital records submitted during claims. Past medical history, ongoing medication, or remarks in discharge summaries are closely scrutinised, said Siddharth Singhal, business head – health insurance at Policybazaar.com.

 

 

Rakesh Kumar, founder and managing director at Square Insurance, noted that insurers often rely on loosely worded phrases such as “history of”, “suspected”, or “borderline”, even where there was no formal diagnosis or treatment before policy inception. Lifestyle-linked conditions like hypertension, diabetes, thyroid issues, or fatty liver are frequently flagged, he said.

 

Pre-existing disease versus incidental finding

Insurers typically examine whether the policyholder knew about the condition, whether there was continuous treatment before the policy began, and whether disclosure would have altered underwriting terms, Kumar explained. Courts and insurance ombudsmen have repeatedly held that non-disclosure must be conscious and material, not inferred with hindsight, he added.

 

Milind Tayde, head – employee benefits at Anand Rathi Insurance Brokers, said insurers apply a “reasonable person” test. If there were no symptoms, consultations, or medical advice before policy inception, an incidental or accidentally discovered condition is usually not treated as pre-existing.

 

Anand R Choudhary, executive partner at ElpeeCo, a law firm, added that new ailments discovered during the policy period cannot automatically justify claim rejection, unless medical history shows the condition clearly existed earlier.

 

Documents that can change outcomes

Experts agree that documentation often determines whether a rejection stands. Treating doctor certificates clarifying that a condition was undiagnosed or clinically insignificant at policy purchase carry significant weight, said Kumar.

 

A clear medical timeline linking policy start dates with first symptoms and diagnosis is equally critical, Tayde said.

 

Singhal pointed to proposal forms, tele-underwriting records, prior discharge summaries, and pre-policy declarations as key documents. Annual health check-ups showing normal readings before policy purchase can also help rebut insurer assumptions, said Bikash Choudhary, chief executive officer at FatakSecure.

 

When and how to escalate?

Once a written rejection is issued, policyholders should escalate to the insurer’s grievance cell without delay, experts advised. Approaching the Insurance Ombudsman is effective if the grievance remains unresolved after 30 days, Kumar said.

 

Common mistakes include skipping grievance hierarchy, submitting inconsistent records, or admitting “non-disclosure” without understanding its legal meaning, Choudhary cautioned.

 

The broader lesson, experts said, is that disclosures in health insurance are unforgiving. Over-disclosing at purchase may feel uncomfortable, but it is far easier than contesting a rejection later.