Imagine paying rent for a house every month, only to find out — on the day you finally move in — that there is a hidden clause that says you cannot use the bedroom. That is exactly what happens to thousands of Indians with their insurance policies. You pay. You trust. You wait. And when the day comes that you actually need help, the system finds a reason to say no.
Consumer policy expert Bejon Misra has been watching this pattern for years. His conclusion is simple and uncomfortable: in India's insurance system, the one person who matters the most — the customer — has the least power.
Why Does Your Premium Go Up Every Year?
Here is something most people do not know. Your insurance premium can increase in two ways. First, your insurance company can simply decide to charge everyone more—and they do not need your permission to do that. Second, as you get older, you automatically get moved into a more expensive category. So even if you never made a single claim, you will still end up paying more year after year.
Now here is what made many people angry. When the government cut the tax on health insurance—called GST—most people expected their premiums to finally come down. They did not. Why? Because hospitals kept raising their charges, and insurance companies passed those costs straight back to you. The tax cut was swallowed up before it could reach your pocket.
To make things worse, insurance companies are not required to explain why your premium went up or by how much it will increase next year. You simply get a letter or a message saying your new premium is higher. You either pay it—or you lose your coverage. There is no middle ground and no negotiation.
The Ombudsman Is Free—But Guess Who Is Really Paying for It?
If your insurance company refuses your claim or treats you unfairly, you have the right to complain to something called the "Insurance Ombudsman." The good news is that this service is completely free for you. You do not pay a single rupee to file a complaint.
But here is the twist. The Ombudsman offices across the country are funded by insurance companies. And where do insurance companies get their money? From the premiums you pay every month. So without realizing it, you are actually paying for the very system that is supposed to protect you from your insurance company.
There is another problem. This process is slow. A simple complaint can take more than six months to resolve. Think about that — six months of waiting while your medical bill sits unpaid or your claim stays rejected. Experts have also found that sorting out just one complaint costs the system a significant amount of money, and those costs eventually come back to you through higher premiums. It becomes a cycle that the customer can never fully escape.
What Happens When You Win a Complaint — And Then Get Punished for It?
This is perhaps the most shocking part of India's insurance story. Some policyholders have gone through the entire complaint process, fought their case, and actually won. The Ombudsman ruled in their favour. And then their insurance company cancelled their policy.
Read that again. They won. And they still lost.
This is the insurance company's way of sending a message: do not dare to challenge us. It is unfair, it is wrong, and it destroys the entire idea of what insurance is supposed to be. Insurance is built on one simple promise—we will be there when you need us. When a company punishes you for holding them to that promise, the promise means nothing.
The only way to stop this is through real consequences—not just warnings or small fines, but serious action like cancelling the license of companies that repeatedly behave this way. Until that happens, some insurers will keep doing it because there is no real reason for them to stop.
Why Can Nobody Understand Their Own Policy?
Ask yourself honestly—have you ever read your full insurance policy document? Most people have not, and it is not because they are lazy. It is because those documents are written in dense legal language that even educated people struggle to follow. They run into dozens of pages, filled with conditions, sub-conditions, and exceptions to the exceptions.
To fix this, insurance companies are supposed to provide something called a Customer Information Sheet — a shorter summary of the policy. But even this summary is often written in complicated language that leaves people confused.
What every policyholder actually needs is something far simpler. One page. Plain language. Four clear answers: What does this policy cover? What does it not cover? How much money can I get if something goes wrong? And what exactly do I need to do to make a claim?
Right now, most people only discover what their policy does not cover at the worst possible moment—when they are lying in a hospital bed, or when they have just met with an accident, or when a family member is critically ill. That is the moment they find out their treatment is not covered, or that their hospital is not on the approved list, or that they missed some deadline they never knew existed. By then, there is nothing they can do.
Are the New Rules in 2025 Going to Fix Any of This?
The government has announced changes to the Ombudsman system in 2025. The most significant change is the creation of a central body under IRDAI—India's insurance regulator—that can hear appeals. This means that if you or your insurance company disagrees with an Ombudsman decision, there is now a formal way to challenge it within a set number of days.
This is genuinely a step in the right direction. Faster decisions, clearer processes, and a proper appeals system can make a real difference to ordinary people dealing with claim disputes.
But—and this is a big but—a new rule is only as good as the people enforcing it. India has had good rules before that were never properly implemented. The real test will be whether insurance companies actually face serious consequences when they ignore these rules. If the answer is no, then the rules will exist only on paper, and nothing will change for the person waiting six months for their complaint to be resolved.
What Does "Insurance for Every Indian by 2047" Actually Mean?
The government has set an ambitious goal — every Indian should have some form of insurance coverage by 2047. It is a worthy aim. But selling a policy to someone is not the same as giving them real protection.
Think of a farmer in a small village, or a construction worker in a city, or a woman running a small shop from home. For insurance to truly work for them, it needs to be affordable enough that they can keep paying the premium even in a difficult month. It needs to be simple enough that they understand what they are buying without needing a lawyer to explain it. And it needs to actually pay out when something goes wrong — without a fight, without months of waiting, and without a list of surprise exclusions.
Misra's view is that this goal is reachable well before 2047 — possibly even by 2030 — but only if the focus shifts from selling policies to genuinely serving people. The single biggest reason most Indians avoid buying insurance is not that they cannot afford it or that they do not understand it. It is that they do not trust it. They have seen neighbors fight for months to get a claim paid. They have heard of families who thought they were covered and were not. They have watched people pay premiums for years and get nothing when they needed it most.
Until that trust is rebuilt—through fair treatment, honest products, and real accountability—no amount of advertising or government schemes will convince ordinary Indians that insurance is worth their money.
The Change That Actually Needs to Happen
The insurance industry in India does not need more products. It does not need more offices or more agents or more television commercials. What it needs is a fundamental shift in attitude.
Right now, the person who matters least in India's insurance system is the customer — the one who actually pays for everything. They have the least information, the least power, and the least protection when things go wrong.
Turning that around is not complicated. It just requires one decision: to put the policyholder first. Not as an afterthought. Not as a regulatory checkbox. But it is the actual reason the industry exists.
When that happens, insurance will stop being something people buy out of obligation or fear and start being something they genuinely value—because they know, with confidence, that it will be there when they need it most.