What is Health Insurance Fraud?

Health insurance policies have gained prominence, however, there are also those who seek to take advantage of them by engaging in fraudulent activity. False raising of claims on health insurance policies and receiving their benefits constitutes health insurance fraud. There are three types of health insurance fraud – claim fraud, application fraud, and eligibility fraud. Get to know more about how insurers are fighting such frauds and what are the possible consequences of committing these frauds in this article.

Run-down of Health Insurance Frauds in India 

As one of the largest insurance markets in the world, India’s insurance industry deals with many thousands of new policies being bought and many claims being raised all within a day. 


As per reports, the Indian insurance industry loses approximately $6 billion annually due to medical insurance scams and frauds.


For instance, Mr. Singh bought a health insurance policy that offers coverage for two different kinds of treatment. However, Mr. Singh is forced to undergo a different treatment at the time of illness. In order to claim the benefits of his health insurance policy, Mr. Singh persuades his doctor to mention that he underwent the treatment for which he is eligible to receive the sum assured, as per the policy. This is a clear example of health insurance fraud by Mr. Singh. 


Also Read: Best Health Insurance Companies in India 2022

Types of Health Insurance Frauds

Aside from the example of health insurance fraud cited above, there are many different types of health insurance fraud. Read below to learn about the different types.

1. Claim Fraud

Claim fraud is the most common type of health insurance fraud. It occurs when a policyholder overstates the expenses that occurred in their medical treatment or submits fraudulent medical bills. Some of the medical insurance scams uncovered have also seen policyholders themselves forging medical bills to receive the sum assured.

2. Application Fraud

Application fraud refers to the policyholder withholding information or lying regarding details that are to be mandatorily disclosed at the time of purchasing the policy. These could include details such as pre-existing illnesses or lifestyle choices, the disclosure of which would cause the premium to rise. 

3. Eligibility Fraud

Eligibility fraud may occur in cases where the policyholder submits claims for conditions or treatments that are not covered as part of their policy. 


However, it is important to remember that eligibility fraud can also occur unbeknownst to the policyholder. This is why it is necessary to read the fine print of health insurance documents and learn the inclusions and exclusions of your policy. Head on over to Bajaj Markets, where you can apply for a health insurance policy for only Rs. 244 a month and a representative will also carefully explain the fine print to you.

How Insurers Are Fighting With the Frauds

Insurers are constantly working towards reducing the number of health insurance frauds that occur. You can also do your part and report health insurance fraud if you are a witness to it. Read on to learn how the insurance industry is attempting to reduce medical insurance scams.


  1. Insurance providers and regulators are implementing strict guidelines and standards that will apply to clinics where policyholders seek treatment and the medicines they use.

  2. Regulators are also building data sets of medical insurance scams so that the patterns of fraud can be recorded and insurers can then take steps to ensure these don’t happen again.

  3. Many insurers are also setting up “extortion anticipation units” that participate in field examinations and check cases that sound a little suspicious to the insurer.

Consequences of Committing Health Insurance Fraud

Regardless of the type of health insurance fraud committed, the consequences are stringent. Read on to learn about the outcome of committing health insurance fraud.


  1. The policyholder could lose all the benefits of the policy entirely. 

  2. Any claims raised that are found to be fraudulent will be rejected.

  3. As a result of losing the benefits of the policy, the policyholder could end up having to bear heavy medical expenses. 

  4. Another consequence of losing the benefits of the medical insurance policy could be that the policyholder loses access to the best network of medical institutions and doctors. 

  5. Renewing an existing health insurance policy or even purchasing a new one might prove difficult once the policyholder has been found to have committed medical insurance scams.


Medical insurance fraud is a serious concern in India and can have several negative outcomes for the policyholders, such as those listed above. While it is true that there are examples of health insurance fraud that occurred without the policyholder’s notice, this makes it even more important for the policyholder to read the fine print of the insurance documents.


Head over to Bajaj Markets, where you can buy a health insurance policy for as little as Rs. 244 a month and get benefits such as no capping on room rent, no medical checkup for those younger than 55 years, and even post-operative care coverage. 


 Best Health Insurance Plans Available at Bajaj Markets


  • ✔️Would it constitute insurance fraud if I don’t tell my insurer that I smoke?

    Yes. Smoking is a lifestyle choice that causes your premiums to be higher than those of a non-smoker since smoking can also lead to several diseases. Abstaining from informing your insurer that you smoke does count as medical insurance fraud.

  • ✔️Are policyholders always at fault for health insurance frauds?

    No. Sometimes, policyholders might commit health insurance fraud without being aware of it since they may raise a claim for a condition that is not covered but they are simply unaware of this.

  • ✔️How is reading the insurance policy’s fine print going to help me save myself from committing insurance fraud?

    A health insurance policy’s fine print lists the inclusions and exclusions of the policy. Reading this fine print is essential as it informs you of what kind of treatment and condition will be covered and ensures that you do not end up submitting fraudulent claims.

  • ✔️What are the consequences of committing health insurance fraud?

    If you are found to have committed health insurance fraud, you may lose all benefits of your current policy and might also face difficulties in getting a new policy in the future.

  • ✔️What is the most common type of insurance fraud?

    The most common type of health insurance fraud is claims fraud, which includes policyholders forging medical bills or otherwise submitting fraudulent bills or even overstating the expenses that occurred during their medical treatment.