Case Study: A Policyholder's Battle Against Claim Denial by Care Health Insurance and PolicyBazaar

 

Navigating health insurance claims can be challenging, particularly when claims are denied without a clear, valid reason. This blog examines a real-life case involving Care Health Insurance and PolicyBazaar, where a policyholder faced repeated denials of coverage, highlighting the challenges of insurer compliance, aggressive selling tactics, and the policyholder's rights under IRDAI guidelines. This case sheds light on the misleading sales strategies used to secure long-term premium commitments, and how these practices ultimately affected the insured when coverage was most needed. 📄🔍

Background: Long-Standing Policy and an Aggressive Upsell 🌟

The insured had been a policyholder since 2013, initially covered by Apollo Munich (later merged with HDFC Ergo) with a family floater plan. In January 2023, the insured was looking to port the policy due to high renewal premiums quoted by HDFC Ergo. Here, PolicyBazaar entered the picture, presenting a persuasive pitch for switching to Care Health Insurance at a lower premium rate, promoting it as a top-tier choice with excellent service and ease of claim processing.

In their pitch, PolicyBazaar agents encouraged the policyholder to prepay for three years of coverage, claiming this would lock in the “best in class” service and rates for the entire term. This upfront payment not only represented a significant financial commitment but was also based on assurances that later proved misleading, as the claim process unfolded with numerous complications and unanticipated claim denials. 💰📉

The First Claim Denial: Urgent Medical Care Met with Resistance 🚫

In November 2023, the policyholder’s wife was diagnosed with Myasthenia Gravis, a rare autoimmune condition requiring immediate hospitalization. When the family requested cashless hospitalization, Care Health Insurance complicated the process by demanding extensive documentation, which was unreasonable under the emergency circumstances. This forced the policyholder to cover the hospital expenses out-of-pocket, defeating the very purpose of the insurance.

The situation exposed the stark contrast between the promised “best-in-class” service and the insurer’s actual response in times of critical need. The rosy assurances provided during the sale by PolicyBazaar appeared hollow when it came to practical support during a medical crisis. 🏥💸

A Second Denial and Repeated Document Requests 📑

The insured faced another setback in August 2024 when his wife suffered a relapse and required another hospitalization. This time, he filed a reimbursement claim totaling ₹91,448. However, Care Health Insurance initially denied this claim on the grounds that the treatment could have been managed on an outpatient basis (OPD), contrary to the treating physician’s recommendation.

Once the policyholder provided additional documentation, Care Health Insurance reopened the claim but began demanding further documentation—specifically, a 12-year-old OPD record from 2012. This demand for outdated records, made long after the policy was sold, was not only impractical but also irrelevant, given that the patient’s condition had not resurfaced in over a decade. Furthermore, IRDAI guidelines limit insurers from requiring unrelated and excessively old documents, particularly if they are irrelevant to the current claim. 📂🔄

Aggressive Upsell and Documentation Demands 📈🔍

PolicyBazaar’s upselling tactics, which convinced the policyholder to commit to a three-year premium upfront, left the family financially locked into an insurer that showed little flexibility or support when it came to claim fulfillment. The aggressive upsell had been based on a narrative of ease and efficiency in claim processing—a narrative shattered by the excessive documentation requests and slow claim approvals.

The Final Claim Denial and Allegations of Fraud ⚠️

Despite providing every relevant medical document and multiple statements from the treating physician, Care Health Insurance denied the claim on October 14, 2024, citing “Discrepancy in Medical Documents” and labeling the claim as “Fraudulent.” The insurer’s labeling of the claim as fraudulent due to missing 12-year-old records without any supporting evidence was a baseless accusation that left the family financially strained and emotionally distressed.

This experience illustrates how aggressive sales practices and upselling can expose policyholders to severe repercussions, as they become financially tied to insurers that may fail to deliver on their promises. The discrepancy between PolicyBazaar’s initial selling points and the harsh reality of Care Health Insurance’s claim process emphasized the significant risks associated with prepaying for long-term policies based solely on sales pitches. 📉🔒

IRDAI Guidelines and Policyholder Protections 📜

Several key IRDAI guidelines were highlighted by this case, underscoring the insurer’s non-compliance and policyholder rights:

• Proposal Form and Solicitation Records: Under IRDAI, insurers and brokers must provide a copy of the proposal form and retain solicitation call records, which should be available to the policyholder upon request. Both PolicyBazaar and Care Health Insurance failed to deliver these documents, leaving the insured without proof of the original terms and promises made during the policy sale.
• Document Relevance and Preservation Requirements: IRDAI standards mandate that insurers can only request documentation relevant to the current claim. Policyholders are not required to retain documents indefinitely, particularly records over a decade old. Care Health’s demand for a 2012 OPD record blatantly disregarded these guidelines.
• Misuse of Fraud Allegations: Branding a claim as fraudulent due to the absence of an irrelevant, 12-year-old document is unsupported by any consumer protection guideline. IRDAI standards are clear on fraud definitions, requiring substantiated evidence—a standard Care Health failed to meet.

The discrepancies between the services promised by PolicyBazaar’s upsell and the insurer’s subsequent claim denials demonstrate the necessity for transparency in both insurance sales and claims. 🔍🏛️

Conclusion 🎯

This case highlights the risks of aggressive upselling in health insurance and the potential consequences when sales promises are not upheld in practice. Despite the three-year premium paid based on assurances of streamlined service, the policyholder encountered excessive documentation demands and unsupported fraud allegations from Care Health Insurance, resulting in severe financial and emotional distress. Such experiences underscore the need for insurers and brokers to honor commitments and comply with IRDAI guidelines, ensuring that policyholders receive fair and reliable support in times of need.

Disclaimer: The content of this blog is based on the written complaint submitted to the insurer, broker, and regulator, along with the supporting evidence provided. We acknowledge that both the insurer and the broker work towards the resolution of any grievances in a fair and timely manner. This blog is published solely for customer awareness and to highlight specific issues encountered by the policyholder in navigating the health insurance claim process. The intention is not to defame or harm the reputation of any individual or entity mentioned. 

Please note that the names of the clients involved in this case have been omitted to respect their privacy. All opinions expressed in this blog are based on the available facts and evidence and are intended for informational purposes only.

Image Disclaimer: The image used in this blog is AI-generated. Any resemblance to real persons, living or dead, or actual events is purely coincidental. The image is for illustrative purposes only and does not represent real individuals or events.