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What is the claim settlement process in health insurance?

Roocha KanadeJul 2, 2025

Understanding the health insurance claim process is crucial for policyholders who want to utilise their insurance coverage during hospital admission. Any confusion in claim filing can delay the process or lead to rejections. This article gives a clear overview of the medical insurance claims processing steps, types of claims, common hurdles, and how to avoid mistakes.

Contents

What is the health insurance claim settlement process?
Types of health insurance claims
- 1. Cashless claims
- 2. Reimbursement claims
Difference between cashless and reimbursement claims
How the health insurance claim settlement process works
- For cashless claims
- For Reimbursement Claims
Documents required for health insurance claim settlement
Common reasons for claim settlement delays or rejection
Tips to avoid health insurance claim rejection
How to check your health insurance claim status
Wrapping up
Frequently asked questions

What is the health insurance claim settlement process?

A claim process in health insurance is the process through which an insured person requests a refund for medical expenses incurred due to hospitalisation or medical treatment. The insurer cross-checks the claim and either approves or denies it based on the policy terms.

In other words, the insurer pays either to the hospital (in cashless mode) or reimburses the policyholder for valid costs. Knowing how to claim health insurance helps prevent delays and ensures smoother settlement.

Types of health insurance claims

Now that you know what is claim in health insurance, let’s understand the types. There are two main types of claims. Understanding both claim types helps in planning the health insurance claim procedure, especially during emergencies.

1. Cashless claims

In this case, the insured person gets treatment at a network hospital by paying a small part of the bill. The insurer pays the remaining part directly to the hospital. This type of claim process is often preferred by the policyholders.

2. Reimbursement claims

Here the insured person pays for the expenses upfront after availing treatment at a non-network hospital and later claims reimbursement from the insurer. This medical insurance process involves submitting hospital bills and other documents as part of the medical claim processing.

Difference between cashless and reimbursement claims

Here are some key differences between cashless and reimbursement claims.

Feature	Cashless Claim	Reimbursement Claim
Hospital Network	Available only in network hospitals	Any hospital (including non-network)
Payment	Insurer settles directly with the hospital	The insured pays upfront and later files a claim
Paperwork	Minimal, handled mostly by hospitals	Extensive documentation required
Pre-authorisation	Mandatory, especially for planned hospitalisation	Not required
Speed of Process	Faster (if pre-approved)	Review and verification take time

Understanding these differences is essential for having clarity on how to claim medical bills in the minimum time.

How the health insurance claim settlement process works

The health insurance claim process starts when the insured person needs medical treatment that is covered under their policy. Here’s the step-by-step process:

For cashless claims

Step 1: Choose a network hospital from the list provided by the insurer.
Step 2: Inform the insurer or Third Party Administrator (TPA).
Step 3: Fill out the pre-authorisation form available at the chosen hospital.
Step 4: After approval, the treatment can proceed with the treatment as per the terms and conditions of the plan.
Step 5: The insurer settles the claim directly with the hospital.

For Reimbursement Claims

Step 1: Avail treatment from any hospital.
Step 2: Pay the bills and collect all documents and receipts.
Step 3: Submit the claim form along with all documents and receipts.
Step 4: The insurer will review and verify the claim.
Step 5: If found valid, the insurer reimburses the expenses into the policyholder’s bank account.

These medical insurance claims processing steps may vary slightly between insurers.

Documents required for health insurance claim settlement

Submitting all documents properly and promptly can speed up your claim process. These are the commonly required documents for medical claim processing.

Properly filled claim form
Doctor’s prescription and medical reports
Discharge summary
Final hospital bill having a breakdown
Pharmacy and diagnosis bills
FIR/medico-legal certificate (in case of accidents)
Policy copy and ID proof
Bank account details or cancelled cheque (for reimbursement).

Common reasons for claim settlement delays or rejection

Several reasons can lead to delays or claim rejection. These include.

Incomplete documentation
Treatment at the non-network hospital (for cashless)
Treatment is not covered under the health policy
Not informing the insurer on time
Exceeding policy limits
Pre-existing health conditions not disclosed before buying the policy
Submitting false or manipulated documents

One should avoid these mistakes to ensure a smooth health insurance claim process.

Tips to avoid health insurance claim rejection

Consider the following things to prevent your claim from being rejected.

Read the Policy Thoroughly: Understand what is covered and what is not covered.
Provide Correct Information: Especially during the application and while submitting documents.
Inform the Insurer/Pre-Authorisation: For planned or emergency hospitalisation, inform the insurer within 24 hours.
Keep Records: Keep medical reports, prescriptions, and receipts.

Use Network Hospitals: Use network hospitals for a hassle-free claim procedure.

How to check your health insurance claim status

Insurers offer many ways to check the status of your claim. To check it online (through your policy/claim number), you can visit the insurer’s website or app. You can also call the customer care and inquire using your policy/claim number. There are some other ways as well, like email support, TPA Helpline, contacting the third-party managing your policy, etc. Tracking your claim status helps resolve the possible issues faster.

Wrapping up

Navigating the claim process in health insurance is not complicated if you are well-informed. Whether it is a cashless claim or a reimbursement request, understanding how to apply for mediclaim and being ready with documents can make your experience stress-free. Health issues are unpredictable, but with a clear knowledge of the health insurance claim process, you can focus on your recovery without financial worries.

Frequently asked questions

Here we have answered some commonly asked questions about claim settlement process in health insurance

How long does claim settlement usually take?

For reimbursement claims, settlement typically takes 7 to 30 days after submission of all required documents, subject to the insurer’s process.

Can I claim for OPD expenses?

Yes, but only if your policy includes OPD coverage. Most of the standard health insurance plans do not cover outpatient expenses.

What happens if a claim is rejected?

If your claim is rejected, the insurer provides an explanation. To counter this, you can appeal or file a grievance with supporting documents.

Can I claim from two insurers?

Yes, if you have multiple policies, you can split your claim or claim the balance from a second insurer after settling with the first, as per the contribution clause.