health insurance claims: Average health insurance claim amount up 30% in 3 years

The average health insurance claim has increased by more than 30% in the last three years owing to rising cost of hospital treatment and better health cover being sought by Indians, show data tracked by PB Fintech run Policybazaar.

The Gurugram-based insurance distributor processes 15,000-20,000 claims a year.

The average claim amount in fiscal 2025 has been around Rs 81,000, with Tamil Nadu having the highest at Rs 1.13 lakh, the data show.

“Post-Covid the cost of health treatment has gone up significantly accounting for medical inflation. Also, we are seeing more customers opting for add-on covers to include the cost of consumables within their health cover as well, which has pushed up the claim amounts,” said Siddharth Singhal, head of health insurance at Policybazaar.

The company found that the frequency of claims has gone up to 6.4 claims on an average from 4.9 in financial year 2023.

The company expects this to have been driven by greater awareness about health insurance, people falling ill for seasonal illnesses like Dengue and such, for which they have to get hospitalised multiple times in a year.

Young consumers account for a major share out of the claims paid by insurance companies. Around 38% of the claims are coming from those in the age group of 18-35 years.Speaking about these trends, Singhal said insurance companies are looking at these data to manage the premiums charged to their customers, since claims is a major cost item for their business.

“They are designing products in a way that they become more modular with customers being asked to pay for different riders, add-on benefits,” he said.

On term insurance side, where the pay-out happens when the policy holder dies, Policybazaar data show that 25-30% of the claims are associated with heart ailments, which is the second largest cause of death, following death by natural causes that account for 30-35%.

Around 35-40% of customers are opting for critical illness cover and accidental death benefits on top of their normal term insurance products, Singhal said, showing the growing trend among consumers for comprehensive cover.