Shopping cart
Your cart empty!
Insured But Not Protected: India’s Insurance Sector Faces a Crisis
Despite the recent GST exemption on insurance premiums, millions of Indians still face serious challenges in the insurance sector. Complaints continue to mount, highlighting issues like mis-selling, claim rejections, and opaque practices.
The Council of Insurance Ombudsman’s 2023-24 report reveals Star Health topping the complaints list with 13,308 grievances, followed by CARE Health Insurance (3,718) and Niva Bupa (2,511). Public insurers like National Insurance and New India Assurance also received significant complaints. Most issues revolve around claim rejections, misrepresentation, and unsuitable product recommendations.
Experts cite high commissions, target-driven sales culture, and low financial literacy as the main causes of mis-selling. Surveys show that 57% of Indians buy life insurance for tax benefits rather than protection. Bancassurance channels exacerbate the problem, using customer trust to sell products with higher premiums but insufficient coverage.
Health and life insurance claims continue to be delayed or partially approved, with some claims rejected for minor documentation issues. The LocalCircles survey found 43% of policyholders faced hurdles in claim processing, and only 8% received prompt settlement at discharge.
Industry experts urge reforms in commission structures, focus on term insurance, and better regulatory oversight. While zero GST improves affordability, systemic changes are needed to make insurance genuinely protective rather than predatory.
12
Published: Sep 29, 2025
All India Story
All India Story is your trusted source for comprehensive and up-to-the-minute news coverage across India. Bringing you the latest on politics, business, technology, entertainment, sports, and more, we are dedicated to keeping you informed with accurate, engaging, and insightful stories from every corner of the nation.
