Health Insurance Demand Is Rising, But Customer Experience Is Worsening: What Policyholders Need to Know

Quick Answer: Health insurance adoption in India is increasing as medical costs rise, but a new Hansa Research report shows that customer experience is not keeping pace. The industry’s Net Promoter Score (NPS) fell from 55% in 2025 to 50% in 2026, while four in 10 policyholders who filed a claim reported facing at least one issue.

Why Are More Indians Buying Health Insurance?

Rising healthcare expenses are becoming one of the biggest reasons Indians purchase health insurance. According to the Health Insurance Customer Experience Score (CuES) 2026 report, 54% of buyers said protection against increasing medical expenses was their main reason for purchasing health insurance, up from 48% in 2025.

The report, based on responses from 4,000 consumers across more than 12 health insurance brands, shows that consumers are increasingly looking beyond simply having a policy. They want insurance that is easy to understand, accessible and dependable when medical treatment is required.

Claims Remain a Major Pain Point

The claims process continues to be one of the biggest areas of concern for policyholders. Although most claimants reported that their cases were processed within two weeks, around four in 10 people who made a claim experienced at least one problem.

Issues involving hospital and provider networks were the most commonly reported concerns. These were followed by delayed payouts and problems with pre-authorisation.

For a policyholder dealing with hospitalisation, such issues can create additional financial and emotional pressure, particularly when treatment requires immediate approval or cashless access.

Customer Expectations Are Changing

The report indicates that consumers now expect more from insurers than just financial protection. Trust, transparency, digital services, hospital networks and ease of dealing are becoming important factors when choosing and retaining an insurer.

Unannounced premium increases and unclear policy terms can also encourage customers to consider switching or porting their policies. Clear communication during renewal is therefore becoming increasingly important.

What Should Policyholders Check Before Buying?

Consumers should look beyond the premium while comparing health insurance policies. Important factors include the insurer's cashless hospital network, claim process, pre-authorisation procedure, exclusions, waiting periods, room-rent limits and co-payment requirements.

It is also important to understand exactly what the policy covers before a medical emergency occurs. A cheaper policy may not necessarily provide better value if its coverage has significant restrictions.

What Does the Report Mean for Insurers?

The findings highlight a growing gap between rising demand and customer expectations. Faster claims processing, stronger hospital networks and clearer communication could become key differentiators as competition increases.

Digital platforms and AI may help insurers process claims faster and track cases more efficiently, but technology alone cannot eliminate problems related to documentation, coverage clarity or hospital access.

For policyholders, the message is clear: buying health insurance is only the first step. Understanding the policy and evaluating how an insurer handles claims can be equally important.

Disclaimer: This article is for informational purposes only and should not be considered insurance, financial or legal advice. Policy terms, coverage and claim conditions vary between insurers. Readers should carefully review their policy documents and verify information with the insurer before making any decision.