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Reimbursement claim

Health insurance · Updated 17 October 2026

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In short

A reimbursement claim is a health insurance claim in which the policyholder pays the hospital first and the insurer later repays the admissible amount, due within 15 days under IRDAI rules.

Also called: reimbursement claim, claim reimbursement, non-cashless claim, reimbursement settlement

What is a reimbursement claim?

A reimbursement claim is a health insurance claim where the insured pays the hospital or other provider out of pocket and then asks the insurer to repay the covered amount. The insurer checks the claim against the policy, deducts anything not payable, and transfers the balance to the policyholder's bank account.

Reimbursement is the main route for treatment at hospitals where cashless is not available or was not approved, and for expenses that are not billed through a hospital, such as pre and post hospitalisation costs, pharmacy bills and some day care or domiciliary claims. The other route is the cashless claim.

How reimbursement claims work in India

The steps are broadly the same across insurers:

  1. Intimation. The policyholder tells the insurer or TPA about the claim as early as possible, online, through the distributor, through the TPA, through the hospital, or by calling the insurer.
  2. Submission. The claim form is filed with bills, discharge summary, prescriptions and reports.
  3. Assessment. The insurer or TPA checks eligibility, waiting periods, exclusions and limits.
  4. Settlement or rejection. Payment is made, or the claim is partly or fully rejected with reasons.

IRDAI's Master Circular on Protection of Policyholders' Interests of 5 September 2024, read with the 2024 Master Circular on Health Insurance Business, sets these rules as of October 2026:

RuleRequirement
Settlement timeClaims other than cashless to be settled within 15 days of submission
DelayInterest at bank rate plus 2%, from receipt of intimation to payment, paid by the insurer on its own
DocumentsInsurers and TPAs collect the documents from the hospital; the policyholder should not be asked to submit them
Missing documents or late intimationNo claim to be rejected or closed for these reasons
RejectionOnly with approval of the Product Management Committee or its three-member Claims Review Committee
Partial or full rejectionReasons given with reference to the specific policy terms
Several indemnity policiesPolicyholder chooses the primary insurer, which coordinates with the others for any balance

Under the standard claim clause in IRDAI's 2020 standardisation circular, which the 2024 consolidation replaced, the limit was 30 days from the last necessary document, or 45 days where an investigation was needed. Older guides, some policy wordings and even some recent news reports still quote those figures.

If a customer disagrees with the outcome, the route is the insurer's grievance officer, then IRDAI's Bima Bharosa portal and the Insurance Ombudsman. Insurers must comply with an ombudsman award within 30 days, or pay the complainant a penalty of ₹5,000 a day on top of interest.

What reimbursement claims mean for distribution

IRDAI wants reimbursement to become the exception, and the 2024 health master circular asks insurers to keep it to a bare minimum. In practice, reimbursement remains common for pre and post hospitalisation costs, non-network hospitals and cases where cashless was declined. For many customers, the reimbursement experience is where an insurer and its distributor are judged.

Practical points for advisers and claims teams:

  • Prepare the customer before any claim. Explain which expenses usually go through reimbursement, and ask customers to keep original bills, prescriptions and reports together.
  • Intimate early, and record it. The distributor should help the customer intimate the claim promptly and keep the reference number. The settlement clock and any interest run from intimation.
  • Know the new timelines. Settlement within 15 days, interest for delay, and the rule that a claim cannot be closed for missing documents give the distributor firm ground when following up. Many complaints come from claims "pending documents" for weeks.
  • Read the settlement letter with the customer. Partial deductions must cite the policy clause. Explaining a room rent deduction or sub-limit calmly, with the policy wording, often prevents an escalation.
  • Escalate correctly. Distributors should know the insurer's grievance officer contact and help customers use Bima Bharosa and the ombudsman when a dispute is genuine.
  • Track turnaround by insurer. Brokers and corporate agents with multiple insurers can compare actual settlement times and partial deduction rates, and use them in placement and renewal decisions.

Sources

Health insuranceCashless claimA cashless claim is a health insurance claim in which the insurer or its TPA pays the hospital directly for covered treatment, so the patient pays only non-covered items and policy deductions.Claims and policyholder serviceClaim intimationClaim intimation is the first notice to an insurer that an insured event has happened, given by the policyholder, nominee or a channel, which starts the claim process and the settlement clock.Health insuranceTPA (third party administrator)TPA (third party administrator) is the term for an IRDAI-registered company that services health insurance claims for insurers, handling cashless approvals and claim processing.Health insurancePre and post hospitalisation expensesPre and post hospitalisation expenses are medical costs for the same condition in a fixed number of days before admission and after discharge, which a health policy pays alongside the hospital claim.Claims and policyholder serviceClaim repudiationClaim repudiation is an insurer's refusal to pay a claim, in full or in part, on grounds such as an exclusion, a breach of policy terms, non-disclosure or fraud, which it must explain in writing.Claims and policyholder serviceGrievance redressal in insuranceGrievance redressal in insurance is India's tiered route for policyholder complaints: the insurer's grievance officer, IRDAI's Bima Bharosa, the Insurance Ombudsman, then consumer courts.

Cite this entry

Glotus456 Research. "Reimbursement claim." Insurance Encyclopedia (India), updated 17 October 2026. https://www.glotus456.com/research/encyclopedia/reimbursement-claim

About this entry. Written by the Glotus456 Research team, a BFSI distribution consultancy in Gurugram working with insurers, NBFCs and FinTechs across India. It explains how things work and is general information, not legal, tax or financial advice. Rules change: check the current IRDAI regulation or circular, or the official scheme or tax source, before acting.